The Dow Jones turned south once again while the S&P 500 index and Nasdaq composite once again turned negative as the stock market’s whipsaw action continue. Dow Jones component Intel (INTC) fell 3.6%. Blue chip retailers Walmart (WMT) and Home Depot (HD) rose.
Walmart kept a 1.6% gain, but Home Depot was barely positive.
The Dow Jones industrial average dipped 0.1% after rising more than 200 points earlier. The S&P 500 fell 0.2% after earlier flirting with undercutting 200-day line. The Nasdaq sank 0.8%.
Volume in the stock market today increased vs. the same time on Tuesday on both major exchanges.
Intel has been showing choppy action since posting an intraday high March 13. The stock has retreated to 8% off the high but is holding above its 50-day moving average. Intel has a 1.8% weighting in the Nasdaq composite.
Intel’s chip sector is No. 3 among 33 sectors. The chip sector ended 2017 ranked No. 10, but was up 7.4% year to date through Monday before running into Tuesday’s buzz saw. Going into Wednesday’s session, the chip sector was up 2.6% in 2018.
Home Depot has lost 7% year to date but could be about to shape a new base. The stock needs to build the right side of the consolidation and retake its 50-day line.
Home Depot grew earnings about 16% in fiscal 2018 ended in January. The Street expects earnings to advance 27% in the current fiscal year.
If the stock market remains in correction, watch to see if Home Depot can use the time constructively by building a base.
Walmart is down 11% year to date. The stock is stuck under its 200-day line. Recently Walmart has been testing robots in 50 stores.
IBD 50 Hit Hard
Quality was having a tough time midsession Wednesday. In the IBD 50, a list of the best stocks in fundamentals and technicals, only five of the 50 stocks rose and volume was unimpressive. For example, Viper Energy Partners (VNOM) gave up modest gains in light volume, turning down 0.7%.
On the downside, Netflix (NFLX) sank 4.6% in busy volume. Netflix so far has found support at its 50-day line, where it is conducting its first test at the line since breaking out in January.
Stocks flashing sell signals include Shopify (SHOP). The stock stabbed under its 50-day line Tuesday and dug a deeper hole intraday Wednesday. Shopify’s most recent breakout came from a fourth-stage base. Research shows first and second-stage breakouts are more likely to work than breakouts from later-stage patterns.
In financial news, the third reading on fourth quarter GDP rolled in at 2.9%. This was better than the 2.7% growth expected. Consumer spending grew 4%, topping the consensus view for 3.8%.
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