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The Dow Jones Industrial Average, the S & P 500 and the Nasdaq are examples of stock resistance today. More importantly, the three major stock indexes corrected initial weaknesses to transform what initially seemed like a disturbing session into a routine break in a confirmed market trend.
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However, the Dow Jones Industrial Average component UnitedHealth (UNH) left a very bitter taste in shareholders' mouth on Wednesday. The health insurance giant lost more than 13 points, or 5%, to reach 248.94 times the average volume.
UnitedHealth has probably fallen on the news that the Democratic-backed US House of Representatives is pushing for a universal health care system that would essentially make private health insurance plans unimportant.
The S & P 500, down 0.6% early, reduced the loss to less than 2 points to 2792 by the end of the day. The key index is now up 11.3% since January 1st.
Initial data indicated that volume had increased on the NYSE, but the negligible drop in the large-cap benchmark meant there was no distribution day.
As can be seen in the last column "Big Picture", the S & P 500 currently has three days of distribution in the last five weeks; a decent number, but generally not enough to derail a tradable stock market recovery.
The Dow Jones fell nearly 0.3%. The Nasdaq composite rose slightly less than 0.1%.
The Innovator IBD 50 (FFTY) fund grew by almost 0.5%. At 32.97, the ETF shatters the S & P 500's non-dividend yield with a 19.4% gain since the beginning of the year.
2 sell signals for this Dow Jones component
UnitedHealth has triggered a key defensive sales signal for newer shareholders.
Falling below the 50-day and 200-day moving average in one fell swoop, the sharp drop in volumes suggested that large institutional investors had decided to massively divest their shares and withdraw important shares. profits.
The stock was forming a tumbler with a handle creating a point of purchase of 272.53 points. If the shares had exceeded this entry and had been broken, the buyers would have been forced to sell today. Why? The stock fell more than 7% under the appropriate point of purchase, which triggered the golden rule of investment. That is, you must always limit your losses – capped at 7% or 8% – in any equity investment.
The Minnesota-based company is a real driving force since the lowest stock market in 2009. We can expect a new base.
Best growth stocks outperform UnitedHealth in 2019
Inside the IBD 50, 14th ranked sports hall chain Planet Fitness (PLNT) reached a new high at 61.90 but gave up almost all of its brutal gain. However, stocks ended up higher than 2% and their long-term uptrend remains intact.
The leader in mid-cap growth stocks posted a 42% increase in fourth-quarter earnings to 34 cents a share. Revenues increased 30% to $ 174.4 million. This marked the fourth consecutive quarter of increases of 30% and more in the turnover.
Large cap major stocks outside the Dow Jones
Inside IBD Big Cap 20, Veeva Systems (VEEV) reached a new high at 124 but then reversed strongly, more than doubling the usual trade. The expert in data management, sales, marketing and customer management software for the drug industry had solid financial results in the first quarter.
Veeva is ranked first in the Big Cap 20 in the latest IBD Weekly. It has also taken first place since the opening of the market on Wednesday.
The stock remains well beyond the 5% buying zone after a break in January after an appropriate purchase point of 101.49 in a base showing the essentials of a double bottom.
Veeva's earnings jumped 87% to 45 cents a share on a 25% increase in its turnover, which reached $ 232.3 million, the highest amount ever recorded in the world. history of society.
Net margin increased by more than 1,000 basis points to 30.6%.
Please follow Chung on Twitter at @IBD_DChung for more information on growth stocks, true market leaders and financial markets.
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