Dow Jones Lags Small Cap Rally; This retail market leader is in the buying range



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Small caps saw a general but moderate decline in the current stock market, with the Russell 2000 rising nearly 0.6% to over 1600. The 0.8% rise in the S & P index SmallCap 600 is 0.1% higher than the Dow Jones Industrial Average. The 600 also resumed its 200-day moving average, a bullish sign for the bulls on the market.




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Meanwhile, leader in the retail industry Chipotle Mexican Grill (CMG) edged down for the third consecutive day after posting solid first quarter results. Shares, however, fell by less than 0.8% and at 672 the stock remains above the 50-day moving average.

A significant rebound on the 50-day line with the current stock of the IBD Leader list would mark a subsequent point of purchase.

The Street expects the impressive bounce of the bottom line of taco and burrito chains to continue.

Refinitiv notes that profits, after jumping 60% in the first quarter to $ 3.40 per share, are expected to increase 30% to $ 3.73 per share in the second quarter, from 46% to $ 3.15 in the third quarter and 58% to $ 2.72 in the fourth quarter later this year.

IBD Stock Checkup displays the SMR rating for Chipotle at a high-end A on a letter scale from A to E. SMR represents sales, profit margins and return on equity.

The Nasdaq composite, benefiting from the strength of Internet, software and IT solutions, grew by almost 0.3%. The S & P 500 corresponded to this gain. QQQ Trust QQQ Invesco QSQ (Nasdaq 100) posted its ninth gain in 10 sessions, up 0.2%. QQQ reached new heights all the time last week.

The volume is down sharply compared to the same time Friday in the two main markets. Monday is the light on the quarterly results; expect a huge news feed later this week. See the full earnings schedule here.

The Innovator IBD 50 (FFTY) has increased by a few cents to 34.58. Dow Jones transportation fell 0.3% on the heels of a slight increase of 0.2% in WTI crude futures to $ 63.45 a barrel.

Bank stocks increase

Monetary centers and supra-regional banks have advanced. JPMorgan Chase (JPM) gained 2% and organized a low-volume escape to help boost the Dow Jones. The stock formed a double bottom with handle. The high value of 114.94 of the handle means that you add 10 cents to get the right point of purchase, or 115.04.

Bank of America (BAC) recently broke out, releasing a proper entry in 30.24 into a large mug with handle. Shares rose more than 2% and reached a high of 31.17.

This means that BofA remains in the buying range because the shares are in the hunting zone at 5%.

Please follow Chung on Twitter: @IBD_DChung and @SaitoChung.

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