Five members of the Dow Jones Industrial Average lead this week’s list of stocks to watch near buy points. Although each of the stocks is listed on the Dow, each hails from a different industry. Boeing stock is actionable as air travel recovers. JPMorgan Chase (JPM) is setting up as the banking sector shows signs of stabilization. Retail and fast food giants Walmart (WMT) and McDonald’s (MCD) make the list, along with computer network and software seller Cisco Systems (CSCO).
Aerospace and defense giant Boeing reported narrower losses and improving sales the past two quarters. The company’s commercial aircraft unit booked solid revenue gains as travel demand and volume returns to pre-pandemic levels. And analysts don’t expect recent 737 Max and 787 Dreamliner production delays to have a major impact on Boeing’s delivery schedule, JPMorgan wrote in a research note Wednesday.
BA stock was added to SwingTrader Thursday. Boeing is actionable from its short-term levels and trendline. Shares are trading just below a 221.33 buy point in a flat base going back nearly four months after a strong uptrend that started in November.
Boeing stock has an 86 Composite Rating out of a best-possible 99. The Composite Rating combines various technical indicators into one easy-to-read score. Its relative strength line is off highs from the beginning of the year and BA stock has a 92 RS Rating out of 99. However, the string of quarterly losses earn Boeing stock a meager 59 EPS Rating.
Boeing stock has ascended 14% year to date.
JPMorgan Chase is doing much better than most banks following the string of failures in March. The New York-based bank behemoth rescued First Republic Bank at the beginning of May and the sector appears to have stabilized in recent weeks. However, there are still plenty of risks ahead for the sector and the full impact from the bank failures is still unknown.
JPMorgan has more than $3.7 trillion in assets and leads the Banks-Money Center Group, according to IBD Stock Checkup.
JPM stock is trending toward a 143.37 buy point of a flat base. The current pattern could be viewed as a handle to a consolidation going back four months.
JPMorgan has a near-perfect 96 Composite Rating. The bank’s earnings and revenue accelerated the past three quarters, earning it a 92 EPS Rating. JPMorgan has an 80 RS Rating.
JPM stock climbed 5.15% so far this year.
San Jose, Calif.-based Cisco aims to increase revenue by shifting its core business away from selling network switches and routers to software and services through acquisitions. The company’s sales growth accelerated the past three quarters and its earnings gains increased the last two quarters.
Cisco ranks fourth in the Computer-Networking Group, which is led by Extreme Networks.
CSCO stock is trading in a cup base with a 52.56 buy point on a daily chart. It’s working on a handle that could offer a 50.58 entry after Monday. On a weekly chart, Cisco already has a handle with that 50.58 buy point. But the latest Cisco base follows two flat bases that fizzled, and those followed a long downtrend.
CSCO stock is hovering on its 10-day moving average but holding above its other technical lines.
Cisco stock has an 80 Composite Rating and an 82 EPS Rating. CSCO shares have a 69 RS Rating as it outperforms roughly two-thirds of stocks in the market.
CSCO stock advanced 4.2% in 2023.
McDonald’s, the world’s largest restaurant chain by number of locations, reported a 15% adjusted earnings jump for its Q1 earnings report in April. Revenue rose 4.1% to top estimates and end a streak of quarterly declines. Traffic rose despite higher menu prices, and comparable sales spiked by double digits for the past two quarters.
Following the results, BMO Capital raised its price target on MCD stock on April 26, noting that McDonald’s should be able to sustain its strong momentum and continue gaining market share, particularly in a softer consumer environment. BMO Capital boosted its price target to 325 from 300.
MCD stock is in a buy zone for its prior 281.67 buy point, but trading below its 50-day moving average and shy of its 21-day exponential line.
It formed another flat base as of Friday’s close with a 298.86 buy point. A strong move above the 50-day line at 289.65 would also break its trendline, offering two reasons for an early entry.
McDonald’s stock has an 81 Composite Rating and an 86 EPS Rating following two quarters of double-digit earnings growth. Its relative strength line is off recent mid-May highs and it has an 80 RS Rating.
MCD stock has advanced 8.8% year to date.
Retail results were mixed this earnings season and many companies warned of slowing sales in the near-term as macroeconomic conditions and inflation hamper consumer spending. But Walmart earnings accelerated the last three quarters, benefiting from a trade-down mentality as customers look to cut costs. Walmart noted strong comparable store sales growth and market share gains in its U.S. grocery sales for its Q1 report, including from higher-income households. The company hiked its full-year earnings guidance from 15 cents per share to 20 cents per share following the results.
Walmart ranks second in the Retail-Major Discount Chains Group, trailing only Costco (COST).
WMT stock is in the buy zone from a 148.34 double-bottom buy point and bounced from its 50-day line last week. Investors also could view 154.35 as an alternate handle entry as shares near the buy point for a cup-with-handle base on the weekly chart in MarketSmith.
Walmart has a strong 85 Composite Rating. Shares have an 88 EPS Rating and 82 RS Rating.
WMT stock rallied 8% so far this year.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison.
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