October 4, 2023

Boeing stock leads 5 Dow Jones giants near buying points

Five members of the Dow Jones Industrial Average top this week’s list of stocks near buy points. While each of the stocks is on the Dow, each comes from a different industry. Boeing stock is useful as air traffic recovers. JPMorgan Chase (JPM) is building 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 vendor Cisco systems (CSCO).


Boeing stock

Aerospace and defense giant Boeing reported smaller losses and improved sales over the past two quarters. The company’s commercial aircraft division posted solid revenue increases as travel demand and volume returned to pre-pandemic levels. And analysts don’t expect recent production delays of the 737 Max and 787 Dreamliner to have a major impact on Boeing’s delivery schedule, JPMorgan wrote in a research note Wednesday.

BA shares were added to SwingTrader on Thursday. Boeing is usable from its short-term levels and trendline. Shares are trading just below a buy point of 221.33 in a flat base going back nearly four months after a strong uptrend that began in November.

Boeing stock has an 86 Composite Rating out of a best possible 99. The Composite Rating combines several technical indicators into one easy-to-read score. The relative strength line has been at a high since the start of the year and BA stock has an RS rating of 92 out of 99. However, the string of quarterly losses has left Boeing stock with a meager EPS rating of 59.

Boeing stock is up 14% year to date.

JPMorgan shares

JPMorgan Chase is doing much better than most banks after the series of bankruptcies in March. The New York-based banking giant bailed out First Republic Bank in early May and the sector appears to have stabilized in recent weeks. However, there are still many risks for the sector and the full impact of the bank failures is still unknown.

JPMorgan has more than $3.7 trillion in assets and heads the Banks-Money Center Group, according to IBD Stock Checkup.

JPM shares are trending towards a buy point of 143.37 with a flat base. The current pattern can be seen as a handle for a consolidation going back four months.

JPMorgan has a near perfect 96 Composite Rating. The bank’s earnings and earnings have accelerated over the past three quarters, earning it a 92 EPS rating. JPMorgan has an 80 RS Rating.

JPM stock is up 5.15% year to date.

Cisco stock

San Jose, California-based Cisco aims to increase revenue by shifting its core business from selling network switches and routers to software and services through acquisitions. The company’s revenue growth has accelerated over the past three quarters and earnings gains have increased over the past two quarters.

A few other network stocks are taking shape with more robust growth, including Arista Networks (ANET) and Extreme networking (EXTR).

Cisco ranks fourth in the Computer-Networking Group, which is led by Extreme Networks.

CSCO shares trade in a cupbase with a buy point of 52.56 on a daily chart. It is working on a handle that could offer an entry of 50.58 after Monday. On a weekly chart, Cisco already has a handle with that buy point of 50.58. But the latest Cisco base follows two flat bases that are buzzing, and they followed a long downtrend.

CSCO stock is hovering on its 10-day moving average, but remains above its other technical lines.

Cisco stock has an 80 Composite Rating and an 82 EPS Rating. CSCO stock has a 69 RS rating because it outperforms about two-thirds of the stocks in the market.

CSCO shares rose 4.2% in 2023.

McDonald’s stock

McDonald’s, the world’s largest restaurant chain by number of locations, reported an adjusted profit increase of 15% for its Q1 earnings report in April. Sales rose 4.1% above expectations, ending a series of quarterly declines. Traffic increased despite higher menu prices and comparable store sales increased by double digits over the past two quarters.

Following the results, BMO Capital raised its price target for MCD shares on April 26, noting that McDonald’s should be able to maintain its strong momentum and continue to gain market share, especially in a softer consumer environment. BMO Capital raised its price target from 300 to 325.

MCD shares are in a buy zone ahead of the previous buy point of 281.67, but trade below the 50-day moving average and shun the 21-day exponential line.

It formed another flat base from Friday’s close with a buy point of 298.86. A strong move above the 50-day line at 289.65 would also break the trendline, providing two reasons for an early entry.

McDonald’s stock has an 81 Composite Rating and an 86 EPS Rating after two quarters of double-digit earnings growth. The relative strength line is outside the recent mid-May highs and has an 80 RS Rating.

MCD shares are up 8.8% year to date.

Walmart stocks

Retail results have been mixed this earnings season, with many companies warning of a near-term slowdown in sales as macroeconomic conditions and inflation weigh on consumer spending. But Walmart’s earnings have accelerated over the past three quarters, benefiting from a buyout mentality as customers look for cost savings. For its Q1 report, Walmart noted strong comparable store sales growth and market share gains in its US grocery sales, including from higher-income households. The company raised its full-year profit expectation from 15 cents per share to 20 cents per share after the results.

Walmart ranks second in the Retail-Major Discount Chains Group, trailing only Costco (COST).

WMT shares are in the buy zone from a double bottom buy point of 148.34 and bounced off the 50-day line last week. Investors might also see 154.35 as an alternate entry to the handle as stocks are near the buy point for a cup-with-handle basis on the weekly chart in MarketSmith.

Walmart has a strong 85 Composite Rating. Stocks have an 88 EPS Rating and 82 RS Rating.

WMT shares are up 8% year to date.

You can follow Harrison Miller for more stock market news and updates on Twitter @IBD_Harrison.


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