Equity investors enjoyed a solid relief rally in the current stock market as the European Central Bank signaled its willingness to keep the cost of money cheap and bolster the European economy. The Dow Jones Industrial Average rose more than 1.2% and extended its eye-opening advance from a June 3 intraday low to nearly 1,850 points, or 7.5%.
XThe Nasdaq composite outperformed, rising nearly 1.4% in midafternoon trading. The S&P 500 gained 1%.
Meanwhile, megacap investors may want to keep an eye an both Boeing (BA) (up more than 4%) and Apple (AAPL) (up 2%), two proven market leaders in the past and fellow components within the 30-stock blue chip Dow Jones industrials. They led a pack of at least seven Dow Jones stocks rising 2 points or more.
A few other high-growth and innovative companies with market values exceeding $40 billion have also recently entered various lists in IBD Leaderboard.
The Leaderboard's main lists include "Leaders Near A Buy Point," "Leaders" (extended from a proper buy point) and "Leaders Watch List."
In 2018, the portfolio-weighted return of 11.8% by Leaderboard stocks beat a 6.2% drop by the S&P 500 excluding dividends.
Why The Dow Jones, Nasdaq, S&P 500 Are Gushing Higher
The stock market's strong move has arrived in concert with an important Day 4 follow-through on June 7, when the Nasdaq strode 1.7% higher in heavier volume vs. the prior session. That big up day came on the fourth day of a new rally attempt after the Nasdaq corrected more than 10% from its recent all-time high of 8176.
The Nasdaq gained as much as 2% during morning trading and hit a nearly six-week high of 8005. The tech-fortified index also hopped back above its critical 50-day moving average.
Volume is running sharply higher vs. the same time Monday on both main exchanges.
Innovator IBD 50 (FFTY) rose 1.3%. The growth stock-focused ETF looked poised to post the highest close since April 30.
Will This Boeing Rating Improve?
According to IBD Stock Checkup, the Relative Strength Rating for Boeing is now a lousy 59 on a scale of 1 (worst) to 99 (best).
That's OK for a stock that is trying to right itself and form a good base.
If Boeing can get within 5% to 15% of its 52-week high, expect the RS Rating to improve.
Long-term IBD research has found the average Relative Strength Rating among big market winners at the start of their price run-ups is 87.
Boeing is still fighting to get its beleaguered 737 MAX generation of passenger airline jets back in the air. Analysts surveyed by Refinitiv see earnings falling 46% to $1.80 a share on a 19% drop in revenue to $19.65 billion. But at the Paris Airshow, British Airways owner IAG signed a letter of intent to buy 200 737 MAX aircraft in a deal worth $24 billion at list prices, Reuters reported.
Chicago-based Boeing's earnings are expected to rebound sharply the rest of the year, up 13% to $4.04 a share in Q3, up 9% to $5.97 in Q4, and roaring 69% higher to $5.35 in the first quarter of 2020. Wall Street sees sales accelerating to year-over-year increases of 5%, 11% and 26% in the same time frame.
Apple Stock Chart Analysis
Apple, a true market leader after its January 2017 breakout past 118.12 in a first-stage cup with handle, is battling to right itself after its latest new breakout failed.
In April, the iPhone, Apple Watch and digital services giant muscled out of new cup with handle at 197.79 but mustered a gain of less than 9%. Then it rolled over as IBD began counting a growing load of distribution days, or instances of unusually strong professional selling.
Eventually, IBD's market outlook dimmed to "uptrend under pressure" on May 7, then "market in correction" (the worst time to buy growth stocks) on May 13.
Watch for Apple to form a potential new base next to its larger price consolidation.
The prior cup base had at least one flaw: The correction from high to low sharply exceeded 33%.
When a stock falls that hard from its 52-week or all-time high, it's much harder to recover. More buying energy is required.
Keep in mind that a 33% drop requires a 50% rebound to return to break-even levels.
A 50% slide requires a 100% gain to return to the past high watermark.
Apple also has a long road back to profit growth.
The Street sees earnings dipping 10% to $2.10 a share in the June-ending fiscal third quarter, then falling 8% in fiscal Q4 before possibly rising 6% in the first fiscal quarter of FY 2020, ending in December.
A slump in iPhone sales in China and other large Asian markets has hurt Apple's fundamentals.
Other Growth Stocks To Watch
Universal Display (OLED) showed leadership, breaking out of a narrow six-week cup with handle. The prime buy point: 177.05.
The 5% buy zone in the organic LED display supplier goes up to 185.90.
A handle, which marks the final shakeout of uncommitted shareholders before a potential new run, must form over a minimum one week or five trading sessions.
Genpact (G), showcased in Monday's IBD 50 Stocks To Watch, surged nearly 2% in active trade. The stock has formed a shallow flat base with a 37.80 entry point.
The Street sees
You can trade the IBD 50 in one click with Innovator IBD 50, an ETF managed by Innovator Capital. Please follow Chung on Twitter at both @SaitoChung and @IBD_DChung for more on growth stocks, breakouts and chart analysis.
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