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5 Dow Jones Stocks On the Verge of a Meltdown

The market is on pace for its worst week in months

By Anthony Mirhaydari, InvestorPlace Market Strategist

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The Dow Jones Industrial Average is falling away from the psychologically critical 26,000 threshold on Friday after two weeks of struggling to hold it. This marks a continuation of the tech-led weakness seen recently, with the Nasdaq Composite down in four of the past five sessions.

A number of catalysts are weighing on the minds of investors. Mainly, the hotter-than-expected jobs report, which you would think is a good thing. But a 2.9% annual pace of wage inflation, highest since 2008, is raising fears of a more aggressive policy tightening pace from the Federal Reserve.

Also weighing on sentiment is ongoing pressure on emerging market currencies from a stronger U.S. dollar and threats of additional trade war action by President Donald Trump.

As a result, a number of Dow Jones stocks are rolling over badly and look set for further weakness in the week ahead. Here are five that are in trouble:

Dow Jones Stocks: Chevron (CVX)

Chevron (NYSE:CVX) shares are breaking down here, falling back to levels not seen since April for a total loss of nearly 12% from the high set in May.

Strength in the U.S. dollar is weighing on crude oil prices, which have dropped for the last five days straight (with added pressure from a weak inventory report) and are now falling further below the $70-a-barrel threshold.

The company will next report results on Oct. 26 before the bell. Analysts are looking for earnings of $2.13 per share on revenues of $47.1 billion.

When the company last reported on July 27, earnings of $1.78 missed estimates by 31 cents on a 22.5% rise in revenues.

Dow Jones Stocks: General Electric (GE)

General Electric (NYSE:GE) shares are rolling over and threatening to fall below their mid-August lows, capping a decline of 20% from the highs seen in May and a 50%-plus decline from the mid-2016 high as investors continue to lose faith in management’s restructuring plans.

UBS analysts recently cut their price target on the stock to $13 form $16 previously.

The company will next report results on Oct. 19 before the bell.

Analysts are looking for earnings of 22 cents per share on revenues of $30.1 billion. When the company last reported on July 20, earnings of 19 cents per share beat estimates by two cents on a 3.5% rise in revenues.

Dow Jones Stocks: Intel (INTC)

Intel (NASDAQ:INTC) shares have been hit hard in the wake of major losses in smaller semiconductor stocks on worries over tepid demand and oversupply in the memory chip business, falling to test the mid-August lows to cap a loss of roughly 20% from the highs seen in early June.

A breakdown here would risk reversing the post-2017 rally that saw shares nearly double. The failed test of the 200-day moving average a few weeks ago isn’t a good sign at all.

The company will next report results on Oct. 25 after the close. Analysts are looking for earnings of $1.15 per share on revenues of $18.11 billion. When the company last reported on July 26, earnings of $1.04 beat estimates by seven cents on a 14.9% rise in revenues.

Dow Jones Stocks: Procter & Gamble (PG)

Procter & Gamble (NYSE:PG) shares are dropping out of a tight two-month trading range to cap what was a textbook uptrend out of the early May low.

A test of the 50-day and 200-day averages is underway now, with failure risking a reversal of the 20% gain over the last few months. Shares remain within the confines of a long-term downtrend that was set with a double-top formation near $90 in late 2017 and early 2018.

The company will next report results on Oct. 19 before the bell. Analysts are looking for earnings of $1.10 per share on revenues of $16.6 billion. When the company last reported on July 31, earnings of 94 cents per share beat estimates by four cents on a 2.6% rise in revenues.

Dow Jones Stocks: Disney (DIS)

Disney (NYSE:DIS) shares a struggling to stay above their 200-day moving average as doubts grow over its expensive acquisition of Twenty-First Century Fox (NYSE:FOXA) for $71 billion.

The bubble was popped when the company reported weak results last month and its most recent “Star Wars” movie (about Han Solo) failed to resonate with fans after a tortured production. Edge Pro subscribers are ready to profit from the downside extension with a position in the Sept 21 $112 DIS puts.

The company will next report results on Nov. 6 after the close.

Analysts are looking for earnings of $1.35 per share on revenues of $13.7 billion. When the company last reported on August 7, earnings of $1.87 missed estimates by eight cents on a 7% rise in revenues.

Anthony Mirhaydari is the founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.


Article printed from InvestorPlace Media, https://investorplace.com/2018/09/5-dow-jones-stocks-on-the-verge-of-a-meltdown/.

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