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Wall Street Banks Help Dow Jones Edge Up As This Growth Stock Clears Buy Point

Selling intensified a touch in stocks today, but the Dow Jones industrial average continues to hold on to last week's impressive 2.3% weekly gain.

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At 3 p.m. ET, the 30-stock Dow Jones industrial average lost its minor earlier gains, as four components rallied 1 point or more. They included Goldman Sachs (GS) and JPMorgan Chase (JPM). The Nasdaq composite sank 0.3% and the S&P 500 eased less than 0.2%.

Volume is running less than 2% lower on the Nasdaq vs. the same time Friday, and more than 6% higher on the NYSE.

Breadth was negative overall. Losing issues exceeded winners by a more than 2-1 ratio on the NYSE and a roughly 9-5 margin on the Nasdaq. The Nasdaq 100 edged 0.3% lower ahead of a key second-quarter report from Netflix (NFLX) after the close.

Please read this earlier Stock Market Today column on the bullish chart action seen recently in this true market leader.

Analysts see Netflix reporting a 427% boost in earnings to 79 cents a share on a 41% gain in revenue to $3.94 billion. The Street will also be paying close attention to net new member data.

Strength In This China Consumer Play

Meanwhile, China consumer spending play ZTO Express (ZTO) broke out of a new flat base, coasting past a 21.80 proper buy point. Shares rose 8% to 22.25 and got as high as 22.67 intraday. Volume has zoomed past 4 million shares and is running at a rate more than 120% above its 50-day average.

The 5% buy zone following ZTO's breakout goes up to 22.89.

ZTO, which is a leader in long-haul transport and last-mile delivery of packages in the Middle Kingdom, is now up 26% since it broke out of a first-stage double bottom at 17.57 on May 14.

The large-cap stock joined IBD Leaderboard as a breakout idea on July 2. ZTO has shown very impressive fundamentals. Revenue jumped 36%, 25%, 27%, 34%, 45% and 48% vs. year-ago levels in the past six quarters.

Earnings have shown attractive acceleration. After coming in flat during the third quarter of 2017, ZTO's earnings rose 35% in Q4 2017 to 27 cents a share and 70% to 17 cents in Q1 of this year. The Street sees Q2 profit rolling 47% higher to 22 cents a share.

Bucking The Decline

Top industry groups for the day include wholesale food, computer networking, money-center banks, superregional banks, clothing manufacturing and department store chains. These groups all ramped 1% higher or more.

JPMorgan showed bullish action and jumped back above both the 50- and 200-day moving averages. With less than an hour to go in the regular session, JPMorgan shares were up 3.7% at 110.30.

Watch to see if the Wall Street titan can keep rising and continue to build a new base. For now, the current action has the look of a saucer. Please read about the saucer base in this new Investor's Corner column.

JPMorgan on Friday reported bullish Q2 results, with earnings rising 26% to $2.29 a share on a 14% revenue increase to $33.14 billion. Average core loans grew 7% while trading-related revenue jumped 13%.

Read more about JPMorgan in this quarterly earnings review.

Oil Sell-Off

Crude oil futures, meanwhile, got slammed after comments were released from U.S. Treasury Secretary Steven Mnuchin. He said that the U.S. may issue waivers to some countries that need time to wind down their Iranian oil imports. WTI near-term futures dived nearly 4% to $68.29 a barrel and hit a session low of $67.58. Numerous oil groups fell sharply. Truck transport, automaker, tobacco and generic drugs firms also fell hard.

Chevron (CVX) helped drag down the Dow Jones industrial average, losing more than 1.2% to 122.48 in light turnover. Shares got as low as 121.88, marking a nearly six-week low.

The integrated oil major continues to work on its long cup with handle.

The buy point remains at 131.18 for now.

Marathon Oil (MRO) got slammed, dropping more than 6% to 20.17 and briefly dipping beneath the 20 level. The oil and gas explorer triggered the golden rule by falling more than 7% below a 22.22 breakout point. Shares broke out on July 10, but the rally stalled that day.

The Houston-based oil and gas explorer has joined Leaderboard twice, first on May 4 when it broke out of a 13-week cup with handle base, and again on July 10 during the next breakout. During the first breakout past an 18.76 buy point, shares rallied 18% in less than three weeks before pulling back to form a new base.

Meanwhile, Kemet (KEM) continued its winning ways. The stock added nearly 2.9% to 29.01, expanding its breakout from a 26.43 buy point in a very deep cup with handle to 10%.

Thus, the specialist in capacitors for the aerospace, electronics and industrial markets is extended past the proper buy zone.

Please follow Saito-Chung on Twitter at @IBD_DChung for more commentary on stocks, sell rules, buy points, and financial markets.

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