As earnings season gets underway, several blue chip Dow Jones stocks are nearing buy points after building bullish bases. Apple (AAPL), Boeing (BA), American Express (AXP), Exxon Mobil (XOM) and Home Depot (HD) could make strong gains in the coming weeks.
Apple Stock
Apple stock is closing in on another buy zone after building a five-week flat base. A key pattern, this reflects unusual strength. Instead of going lower, it holds steady in price which tells you it wants to run higher. The flat base is part of a base-on-base pattern.
The Dow Jones stock is nearing a buy point of 194.30, MarketSmith analysis shows. Another positive sign is its relative strength line, which has been trending gently upward in recent weeks. The RS line, which tracks a stock’s performance vs. the S&P 500 index, had pulled from record highs for most of June. Apple stock dipped 0.2% to close at 190.91 on the stock market today.
But not everything is rosy in Apple’s orchard. For while Tim Cook has gradually increased the amount of revenue spent on R&D from 2.2% to 5.1% of revenue, the company has yet to introduce a “home run” product like the iPod, iPhone or iPad under his leadership. The hope is that high-margin services revenue continues to boom amid sluggish Apple iPhone sales.
Boeing Stock
Boeing stock could be set to take off after five-week flat base with a buy point of 374.58. That’s after a prior breakout failed.
A good showing at the Farnborough Airshow, which is traditionally a boon for jet orders, could act as a tailwind.
Boeing stock rose 1.5% to finish at 356.10, after retaking its 50-day line on Friday. Its relative strength line is moving higher again but has not made much headway over the past six months.
The Farnborough Airshow kicked off today, with the first five days dedicated exclusively to trade. Boeing and European rival Airbus (EADSY) already are announcing jet orders. Airbus stock edged lower but is in a buy range after Friday’s low-volume breakout.
Boeing is getting set to report second-quarter results on July 25.
American Express Stock
The credit card giant is closing in on a buy point after building a second-stage flat base over the last five weeks. The entry point is 103.34. American Express stock advanced 0.2% to 100.69.
American Express stock has been somewhat choppy in 2018, with its price edging higher. However, it found support at its 50-day line on Friday, which is a positive sign. It also boasts solid, but not ideal, fundamentals, which is reflected in its IBD Composite Rating of 92.
Last month the Supreme Court threw out a lawsuit alleging that American Express stifled competition by barring merchants from encouraging customers to use cards that carry lower merchant fees.
Exxon Mobil Stock
Oil giant Exxon Mobil is trying to reach a buy point of 83.89 after building a 23-week cup-with-handle base. This is a powerful pattern that can lead to big gains.
Exxon stock fell 1% to 82.49 Monday, as crude oil prices fell sharply. That’s always a risk with energy stocks, as they swing up and down with crude oil prices.
While Exxon stock has slipped, it is managing to hold steady above its 50-day line. Meanwhile, fellow Dow Jones stock and Oil & Gas-Integrated Group member Chevron (CVX) is in a base but trading below its 50-day moving average.
Exxon stock has fallen modestly in 2018. The stock also has shaky fundamentals, and currently holds a disappointing IBD Composite Rating of 45. In addition, its Relative Strength Rating of 57 is poor.
Home Depot Stock
Big-box home improvement giant Home Depot is also near a buy zone after building a pleasingly symmetrical cup-with-handle base over the last 24 weeks. It is shooting for a 201.70 buy point.
Home Depot stock edged up 0.1% to 198.88 on Monday. The stock has been a consistent winner, and its relative strength line remains near an all-time high. In addition, the stock has solid fundamentals all around, which is reflected by its solid IBD Composite Rating of 90.
Home Depot’s first-quarter same-store sales, reported in May, came up short of expectations, with management blaming cold, wet weather. However the company held to its earnings-per-share guidance and remained upbeat on the second quarter as the weather improves.
