Dow Jones’ Strength Wavers Due To Rise In Coronavirus Cases; Growth Stocks Lead Market

The Dow Jones Industrial Average traded at break-even on Wednesday as the S&P 500 and Nasdaq gained strength in heavier-than-normal trading volume. Meanwhile, a handful of IBD Leaderboard stocks traded in or near buy zones, including Dexcom (DXCM) and Netflix (NFLX).

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In the stock market today, the Nasdaq composite rose 1%. Meanwhile, the S&P 500 was up 0.6% and the Dow Jones traded lower slightly, down 0.1%. Data showed volume was higher on the exchanges vs. the same time on Tuesday.

The S&P 500 showed solid support at the 200-day line on Tuesday, as the index rebounded above this key area. The major benchmark index continued this move higher on Wednesday. Additionally, the Nasdaq composite reclaimed its 10,000 level on Tuesday and continued higher in heavy volume on Wednesday, above this key psychological area.

As stocks continue to rise in heavy volume, it appears investors are looking past the recent spikes in new coronavirus cases. Total new U.S. cases have topped 40,000 for six days in a row as California, Texas and Florida remain growing trouble spots.

As for growth stocks, the Innovator IBD 50 (FFTY) rose as much as 0.8% on Wednesday. The ETF still remains near the upper edge of a 5% buy zone from a 33.48 buy point of a cup-with-handle base.

Dow Jones Today

The Dow Jones traded near break-even in afternoon trading. According to MarketSmith chart analysis, the Dow still remains below a key resistance level at the 200-day moving average.

Fourteen of the Dow’s components traded lower Wednesday afternoon. Eight of the components were down more than 1%, while five components traded up more than 1% each in a mixed trading session. Biggest decliners among the blue chips included oil stocks Exxon Mobil (XOM) and Chevron (CVX), down 1.9% and 1.4%, respectively.

Elsewhere in the Dow, Pfizer (PFE) rose 4.8% on the stock market today.

According to an earlier Stock Market Today column, Pfizer was a bright spot among the blue chips after the drugmaker announced positive results for a coronavirus vaccine it’s developing with BioNTech (BNTX).

While Pfizer stock remains inside a flat-base pattern with a 39.32 buy point, it still has yet to reclaim its 50-day and 200-day lines.

Also among top Dow Jones gainers was tech stock Microsoft (MSFT), up 1.2% on Wednesday. Among top Leaderboard stocks in the Dow industrials, Microsoft remains a winner and is currently extended from a 180.10 cup with handle buy point.

Microsoft holds a near-perfect 98 Composite Rating on a scale of 1 to 99. The Composite Rating represents key fundamental and technical metrics in a single score. During a confirmed uptrend, investors should be aware that it’s best to focus on growth stocks with a 95 Composite Rating or higher.

The Dow tech giant reports earnings in roughly 17 days, on or around July 18.

Stocks To Watch: Netflix Stock In Buy Zone

Beyond Meat (BYND) and Daqo New Energy (DQ) both made the Stocks On The Move list on the homepage of Investors.com. This is a great place to look for potential breakout stocks.

Meanwhile, Leaderboard stock Dexcom underperformed on Wednesday, but remains a top IBD 50 stock to watch.

Shares have risen more than 121% after bottoming on March 17 at 182.07 amid the coronavirus market crash. Since then, the stock has successfully broken out of a stage-two cup-with-handle base with a 281.07 buy point. Shares of Dexcom then rose another 52% to an all time high of 428.59 in late-May.

Dexcom’s current stage-three base, another cup-with-handle formation, has formed almost entirely above its 50-day moving average, which is a very bullish sign.

Also, among top Leaderboard stocks, Netflix traded inside a buy zone on Wednesday, after rising more than 5%. Shares of Netflix remain above a 459.07 buy point from a flat-base pattern after finding support at the 50-day moving average. Netflix is holding strong above this key level of support.

According to Leaderboard analysis, “the relative strength line is improving after taking a dive. The new base is still a first-stage pattern, which favors the stock. Netflix struggled around 450 in May, but at the time it was trying to clear a faulty pattern.”

Follow Rachel Fox on Twitter at @foxonstocks for more market insight and Dow Jones commentary.

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