As September nears a close, some U.S. Equity indices are having their best September performance in some time. We discuss how to approach a few groups of mega cap names.
As September nears a close, some U.S. Equity indices are having their best September performance in some time with the Russell 2000 (RUT) having its best September performance since 2017 and the S&P 500 (SPX) it’s best since 2013. While the Dow Jones Industrial Average (.DJIA) hasn’t quite had the same historic performance as others, the index is up 88 basis points with notable action within underlying constituents worth reviewing. Stocks covered will include those recently rallying to highs and are either still extended or pulling back to more actionable territory. Additionally, two Dow stocks that are actionable currently on their point and figure charts are covered.
Extended
Apple (AAPL) – After completing a fourth consecutive buy signal during last week’s trading Apple rallied to its highest level since January at $256 on 9/22. Initially helped by increased ratings/price targets from some firms and continuing to trade near rally highs the remainder of the week on news of an investment in Intel (INTC). Alongside improvement on the trend chart, the market RS chart reversed back into a column of Xs against the S&P 500 Equal Weight Index (SPXEWI), increasing the stock to a 4 for 5’er. Apple is now back in the top half of the Computers sector matrix and monthly momentum has flipped back positive for the first time in eight months. This week’s action placed AAPL above the top of the 10-week trading band with a Weekly OBOS Reading north of 100% for the first time since July 2024. Those seeking exposure to Apple are best served looking for a pullback to the $230 to $240 range, or potential consolidation in the $240 range along with a normalization of the 10-week trading band. Note the stock’s all-time high from December 2024 resides at $260. Initial support can be found at $228, while additional support can be found at $204 and $198, the bullish support line.
International Business Machine (IBM) – Yesterday’s action (9/25) brought IBM above $284 on news of IBM and HSBC Holdings (HSBC) testing quantum computers within bond trading. This continues the current column of Xs on the default point and figure chart that began earlier this month. While still maintaining a sell signal given back in August, IBM has been the best performing Dow stock in the month of September (through 9/25), up 15.59%. IBM has held at least a 3 technical attribute rating since October 2023, and this week’s action places the stock in overbought territory, well above support in the $230 range. Following a potential reversal back into Os and possible support developed closer to current prices, those seeking exposure would be looking for a return to a buy signal as well before considering. Note the stock’s all-time high from June resides at $296. Beyond initial support at $236, additional can be found in the $220 range with the bullish support line residing at $220.
Pulling Back
American Express (AXP) – American Express rallied to a new all-time chart high at $348 during Tuesday’s (9/23) trading before pulling back during Thursday’s (9/25) session to $336. The stock has maintained a positive trend since November 2023 and a buy signal since late April this year, completing a third buy signal at the end of August at $332. AXP has been a 5 technical attribute stock since January 2024 and sustained at least a 3 TA rating since January 2022. The stock has also ranked within the top third of the Finance sector matrix for the past 18 months, speaking to the stock’s superior strength relative to peers. AXP is actionable here on the pullback as well as further back toward the middle of the 10-week trading band near $312. Initial support lies in the $284 to $292 range, while the bullish support line resides at $240.
Goldman Sachs (GS) – Goldman Sachs rallied to a new all-time chart high at $816 during Tuesday’s trading (9/23) before pulling back Thursday (9/25) to $784. The stock has maintained a buy signal since late April this year, completing a sixth buy signal earlier this month. Following a positive trend reversal, GS has been a 5 technical attribute stock since May of this year and sustained at least a 3 TA rating since October 2022. The stock has shown superior relative strength against its peers, currently ranking 2nd (out of 62) within the Wall Street sector and having ranked within the top third since November 2023. GS is actionable here on the pullback as well as further back toward the middle of the 10-week trading band at $736. Initial support lies at $728, while additional can be found at $712 and $696 on the default chart.
Actionable
Traveler’s Insurance (TRV) – TRV rallied to a new all-time chart high at $280 earlier this month, which was preceded by a return to a buy signal with a double top break at $272 in August. The stock has been a 3 for 5’er since October 2024 and maintained a positive trend on its point and figure chart since October 2023. The stock currently ranks within the top half of the Insurance sector matrix while being accompanied by a yield of roughly 1.6%. Okay to consider here or on a pullback to $268, the middle of the 10-week trading band. Initial support can be found in the $248 to $256 range, while additional may be found in the $224 to $232 range.
Walmart (WMT) - WMT rallied to a new all-time high at $106 early last week, giving a second buy signal and completing a bullish catapult. The stock is a 4 for 5’er and maintained at least a 3 TA rating since June 2024. Weekly momentum has just flipped back to positive and the stock is okay to consider here or on a pullback to $99, the middle of the 10-week trading band. Initial support can be found in the $94 to $96 range, while additional support may be found in the $91 to $92 range.
