U.S. equities have enjoyed an impressive October performance: The Dow Jones Industrial Average has gained more than 1,500 points, or 9.2%, in a smooth unbroken uptrend. The 20-, 50- and 200-day moving averages offered little resistance as the index returns to levels not seen since July.
The physiologically important 18,000 level looms just overhead.
Participation has been good, pushing the percentage of large-cap stocks in uptrends to levels not seen since early May, as more and more issues participate.
As this happens, new buying opportunities are created from laggards starting to perk up.
Here are five Dow Jones components that are about the join the party.
Dow Jones Titans Perking Up: Apple (AAPL)
Apple (AAPL) reported a top- and bottom-line beat this week with earnings of $1.96 per share (vs. the $1.88 expected) on revenues of $51.5 billion (vs. $50.8 billion expected). Gross margins expanded to 39.9% vs. 38% last year.
Shares are moving up to challenge their 200-day moving average as an uptrend — as indicated by the upward cross of the 20-day moving average over the 50-day — gets started for the first time since the spring.
Edge Pro subscribers are enjoying a 42% gain in their November $115 AAPL calls.
Dow Jones Titans Perking Up: Caterpillar (CAT)
Beleaguered machinery maker Caterpillar (CAT), which has been on the slide since the summer of 2014, appears to be on the verge of at least a short-term relief rally as it crosses above its 50-day moving average.
An uptrend initiation is imminent as the 20-day prepares to move above the 50-day moving average — which would end a six-month downtrend.
The move follows a mid-October earnings-related dip to test its 20-day moving average after reporting weaker-than-expected quarterly profits and a 19.1% drop in revenues over the past year.
Dow Jones Titans Perking Up: Chevron (CVX)
While oil prices have been range bound for the past two months, energy stocks such as Chevron (CVX) have been perking up in anticipation of a global economic reacceleration thanks to new stimulus or hints of new stimulus from the likes of the People’s Bank of China and the European Central Bank.
Dow Jones Titans Perking Up: Goldman Sachs (GS)
Bank stocks have been enjoying buying interest over the past week as rising odds of a Federal Reserve interest rate hike have pushed up long-term bond yields, lifting the net interest margins that banks are dependent upon for profit margins.
As a result, Goldman Sachs (GS) shares are working to exit a three-month-long inverted head-and-shoulders reversal pattern that traces out a return to the July trading levels near $210 — which would be worth a 10%-plus gain from current levels.
I have recommended GS shares to Edge subscribers.
Dow Jones Titans Perking Up: JPMorgan Chase (JPM)
Like GS, JPMorgan Chase (JPM) shares are benefiting from the rise in long-term bond yields. Shares started lifting after the company reported better-than-expected quarterly results on Oct. 13. Earnings per share came in at $1.68, above Wall Street expectations for $1.37.
Edge Pro subscribers are enjoying a 155% gain in their November $16 BAC calls.