Indexes came off session lows and turned solidly higher, looking set for a third-straight market advance.
X The Dow Jones industrial average and S&P 500 rose 0.4% and the Nasdaq composite was up 0.6%. All remained below their 50-day moving averages.
The Dow transports were up 1.1%, as logistics and airline industry groups showed relative strength. Some retail, building products, metals and education stocks also outperformed.
The Nasdaq got some lift from software and e-commerce stocks, while the Philadelphia Semiconductor Index came back to break-even.
Paycom Software (PAYC) jumped back above the 50-day moving average in active trading, a bullish move after the stock grew volatile after Paycom’s Feb. 6 earnings report and volatility also rose in the general market. Shares are back above the 86.20 buy point as well, but an uncertain market and a past sell signal make this new entry suspicious.
The cloud-based human resources software company raised its stock buyback by $100 million, and KeyBank upgraded Paycom to overweight from sector weight.
Many leading stocks are finding support after pulling back around the 50-day moving average. That normally puts stocks in new buy areas, but investors must weigh a couple of factors.
First, only the first or second pullback after a base breakout is where these opportunities exist. Second, the buy areas must be above the buy point of the breakout. Also, the market outlook trumps all buy and sell decisions, and with the market in a correction, it’s a bad time to be adding stocks.
Weibo beat profit expectations this morning. Chip leader Nvidia suffered a shakeout as the market started to slide last week, but has been recovering and has been steadier since Thursday’s earnings report. Adobe has been added this week to IBD Leaderboard.
IBD’s TAKE: An easy way to find buy points is to check the chart analyses in the IBD 50 and Big Cap 20 lists published in IBD Weekly. Buy areas are noted at the bottom of each chart.
Paylocity Holding (PCTY) fell 2% in big volume. The stock has triggered the 7%-8% sell rule after a breakout past a 50.62 buy point failed.
Brighthouse Financial (BHF) continued a steep decline, dropping to its lowest price level since September. The company, which was spun off from MetLife (MET) last year, has tumbled below its 50-day line, another bad sign.
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