The Dow Jones Industrial Average moved off its intraday lows while still trading in the red after the long holiday weekend. Meanwhile, tech stocks led the upside, as the Nasdaq briefly turned positive in early afternoon trading. The tech-heavy index then swung between small gains and small losses.
Dow Jones Today
At around 1:30 p.m. ET, the Dow Jones Industrial Average traded down 0.2%, but remained well off intraday lows. Meanwhile, the S&P 500 traded 0.1% lower, after also moving off morning lows. The small-cap Russell 2000 was down 0.6%, while the Nasdaq led with a 0.1% gain. Volume was running lower on the Nasdaq and the NYSE vs. the same time on Friday.
Elsewhere, the price of Bitcoin surged over the long weekend, trading briefly over $32,000 Tuesday morning, according to CoinDesk.
The market action continues to strengthen after weeks of bearish action. The Nasdaq notched an official follow-through day on Thursday, which was followed up by further strong gains on Friday. On Tuesday, the Nasdaq continued to strengthen from a technical perspective as the index moved off intraday lows and held above support at its 21-day line. Both the S&P 500 and Dow Jones also held above this level of support after regaining this area last week.
Friday’s Big Picture column commented, “The stock market finished sharply higher Thursday in bullish action that left the S&P 500 and Nasdaq composite on track to finally end seven-week losing streaks.”
Four Oil Stocks Breaking Out Now
Elsewhere, U.S. oil prices jumped to a two-month high as European Union leaders imposed a partial oil embargo on Russia. West Texas Intermediate crude traded up 2.3%, above $117 a barrel.
Several oil stocks in the MarketSmith Growth 250 index scored breakouts including PDC Energy (PDCE), SilverBow Resources (SBOW), Whiting Petroleum (WLL) and Laredo Petroleum (LPI).
All of these breakout stocks are part of the U.S. oil and gas exploration and production industry group, which ranks No. 5 out of IBD’s 197 groups, indicating superior strength among the groups.
PDC Energy has a particularly strong looking breakout. Shares moved above a 79.49 cup-based buy point in strong volume. The stock’s RS line also hit a new high after shares gapped up early Tuesday. The move follows a gain of 8.7% on Friday. Shares remained within the 5% buy zone in afternoon trading, which tops out at 83.46.
SilverBow Resources also broke out from a cup without handle and a 40.60 entry. The breakout resembles PDC’s, as SBOW’s RS line also notched a new high. But SilverBow’s breakout didn’t hold up in afternoon trading as shares slipped back below the proper entry. Volume also remains light in SBOW, a reason for caution in this stock.
Whiting Petroleum broke out from a 90.99 entry. Shares remained inside the buy zone in afternoon trading as the RS line also notched a new high. The base is a stage four base, which could be a concern. Breakouts from earlier stage bases tend to have higher levels of success.
Finally, Laredo Petroleum scored a breakout from an 89.07 cup-base entry on Tuesday.
After rising over 3%, shares backed off from intraday highs and traded below the proper buy point. The stock’s breakout follows a rise of over 11% on Friday. Laredo expects EPS growth of 225% in 2022 from 2021’s EPS of $8.91. An earnings per share estimate of $28.94 in 2022, according to MarketSmith, would be a huge jump for the Tulsa-based firm.
Laredo has operations in the resource-rich Permian Basin in West Texas.
Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.
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