Major indexes moved little and the Dow Jones industrial average slumped 0.5% in late-afternoon trade Tuesday. But at least four stocks with solid fundamentals continued to work on new bases and may set up as new leaders among stocks today.
Semiconductor firms, meanwhile, paced the upside. So did steel stocks amid news that the White House is adding Vietnam to its tariff targets for related imports into the U.S.
The Philadelphia semiconductor index (known as the SOX) rallied more than 1.1%, smashing a flat Nasdaq composite and a 0.1% loss in the S&P 500. The Dow Jones industrial average, decked by 1-point losses or more by at least five of its 30 components, fell 0.5%.
Volume is running slightly lower on the Nasdaq and higher on the NYSE vs. the same time Monday.
Among the five Dow Jones industrial stocks leading the downside, McDonald’s (MCD) dropped more than 1% to 159.75. While turnover is very light so far, the stock is slipping beneath the 50-day moving average for the first time in more than three weeks.
Watch The 50-Day Line
Growth-stock pickers should demand their stocks to lead their 50-day moving average higher, not lag it.
On the other hand, McDonald’s trades just 10% below its all-time peak of 178.70 following a magnificent run in 2016-2017. So for now, the burger behemoth is still in basing mode.
Here are four more companies to consider for your watch list as the market remains in a confirmed uptrend:
Grubbing For Profits
Grubhub (GRUB), No. 5 in the IBD 50: The fast-growing online and mobile food ordering and delivery service is crafting a handle on its nine-week double bottom.
A handle represents a final shakeout of weak holders, sending shares into the hands of long-term-minded owners. A good breakout will send a stock powering past the highest price within the handle. But this handle seems less significant in terms of an entry because the buy point is almost the same as for the regular entry at 105.78.
Twitter (TWTR): The social media giant sports a highly respectable Composite Rating of 94 on a scale of 1 to 99, as seen in IBD Stock Checkup.
ArcelorMittal (MT): The global steel maker, up more than 1.3% to 35.13, has fashioned a cup with handle that features a 36.61 entry point.
Don’t Ignore Enterprise Software Stocks
SAP (SAP): The business software giant bumped its head against a price ceiling at 116 multiple times in November to January. SAP did it again last week. But the stock is now just 3% beneath its peak.
The new saucer with handle shows a 116.79 buy point.
The German multinational firm has posted earnings-per-share gains of 18%, 17%, 32% and 15% in the past four quarters. Revenue lifted 9% to 15% over the same period.
SAP’s enterprise software group ranks No. 2 among 197 industries for six-month relative price performance. It ranked No. 1 last week and has given the throne to the U.S. oil and gas exploration and production industry group.
Also in stocks today, the Dow transports eased 0.7% after outperforming the major indexes on Monday. The S&P SmallCap 600 slipped 0.5%.
