Dow Jones stocks like JPMorgan Chase (JPM), Goldman Sachs (GS), Caterpillar (CAT), Chevron (CVX) and Dow Inc. (DOW) are your stocks to watch for the coming week.
JPMorgan stock, Goldman Sachs, Caterpillar and Dow are all in buy zones, while Chevron stock is just below a buy point.
All of these stocks showed modest gains to fractional losses last week, outperforming the Dow Jones and the S&P 500 index. Most have relative strength lines at or near highs, reflecting their ongoing outperformance vs. the S&P 500. The RS line is the blue line in the charts provided.
Those stocks are flexing strength in a choppy market rally. All have reported earnings in the past few weeks, as stronger economic growth, rising Treasury yields and strong demand for energy and chemicals lifted these economic recovery plays.
Goldman stock and Dow are on SwingTrader.
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JPMorgan stock rose 1.55% to 164.01 in Friday’s stock market trading, hitting a record high. Shares climbed 1.8% for the week. JPM stock is within buy range of a flat base with a 161.79 buy point.
Shares of the banking giant have a 93 Composite Rating and a 90 EPS Rating.
JPMorgan last month reported first-quarter earnings that beat estimates.
“With all of the stimulus spending, potential infrastructure spending, continued Quantitative Easing, strong consumer and business balance sheets and euphoria around the potential end of the pandemic, we believe that the economy has the potential to have extremely robust, multiyear growth,” CEO Jamie Dimon said in the company’s earnings release.
April’s weak jobs report — tempered potentially by labor and supply shortages — may have tamed some of that euphoria. But it indicates that the Fed might take steps to support the economy for a longer period, even if low interest rates ding banks’ profits.
However, rising 10-year Treasury yields — reflecting growth and inflation expectations — also help banks because they lend on the long end of the yield and borrow on the short end.
Goldman Sachs Stock
Goldman Sachs stock advanced 2.8% to 368.77 on Friday, edging down 0.55% for the week. GS stock is within range of a cup base with a 356.95 buy point, according to MarketSmith analysis.
Shares have a 98 Composite Rating. That’s the highest rating of any of the Dow Jones stocks mentioned here. Goldman’s EPS Rating is 91.
Goldman Sachs’ first-quarter results last month also beat estimates, led by big gains in investment banking, fixed-income and equities trading.
CEO David Solomon, during the Goldman earnings conference call, echoed Dimon’s sentiments.
“At this stage, it is clear to me that the U.S. is poised for a strong recovery this year, led by consumer spending that is rebounding to pre-Covid levels,” he said. “This sentiment is reflected in the capital markets, with U.S. equities hovering at or near records, and bolstered by recent U.S. employment data and our economists’ forecast on GDP growth.”
Caterpillar stock rose 0.9% on Friday and 0.6% for the week to end at 242.23. CAT stock is just above a 237.88 flat-base buy point.
The stock has an 88 Composite Rating and a 79 EPS Rating.
The mining and construction equipment maker last month reported earnings that were better than expected, marking a return to EPS and sales growth vs. a year earlier.
Caterpillar stock held up especially well last week, given that mining and housing-related stocks struggled.
Dow stock finished Friday with a 2.6% gain to 69.83, a record closing price. Shares rose 1.2% for the week. Dow stock is within range of a flat base with a 67.37 buy point.
Shares of the company, which makes chemicals and materials for an array of industries — from personal care to packaging products — have a Composite Rating of 80. The EPS Rating on the stock is 55. The stock was added to SwingTrader on Friday.
Higher prices for chemicals, pushed upward after harsh winter weather in Texas forced some plants to stop running, helped Dow’s most recent round of earnings. But some analysts have said the higher prices seemed unlikely to last.
“We swiftly responded to the unusual industrywide disruption from Winter Storm Uri, quickly bringing assets back online within a week and reaching prestorm operating rates by quarter-end,” Dow CEO Jim Fitterling said in a statement last month.
“And despite supply constraints,” he continued, “we saw demand growth as the economic recovery continued to broaden, most notably in packaging, construction, mobility, electronics and consumer durables end-markets.”
Chevron isn’t in a buy zone yet. But it’s close. Shares of the integrated oil and gas giant rose 2.6% to 109.47 on Friday, ending with a 0.45% weekly loss. Shares were in a cup base with a 112.80 buy point. On Monday, CVX stock tried to break out, hitting 113.11 intraday. Investors could view 113.21 as a high handle entry as well.
Of the Dow Jones stocks mentioned here, it has the weakest Composite Rating, at 40. Its EPS Rating is 13.
The RS line for Chevron stock is below 52-week highs, but not greatly so.
Chevron last month reported mixed results. But oil prices have recovered in tandem with the economy.
“Earnings strengthened primarily due to higher oil prices as the economy recovers,” said Chairman and CEO Mike Wirth in a statement. “Results were down from a year ago due in part to ongoing downstream margin and volume effects resulting from the pandemic and the impacts of winter storm Uri.”
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