The broader averages may have many investors questioning overzealous price momentum that’s possibly run its course. But in a market made up of stocks, well-timed income and capital appreciation exposure are still available if one knows where to look. And right now, those opportunities are setting up in three Dow Jones stocks as we’ll explore below.
Apple (NASDAQ:AAPL). Microsoft (NASDAQ:MSFT). Home Depot (NYSE:HD). They’ve been the veritable cream of the crop since a novel coronavirus-driven bear market bottomed almost exactly four months ago. Each of the Dow Jones constituents have powered their way to double digit gains in 2020, and claimed new all-time-highs in the process.
The price action in those Dow Jones stocks has also helped the venerable blue-chip index recover roughly 75% of its own historic-making Covid-19 low, and move within several percent of being made whole again on the year. It’s impressive price action to say the least, and maybe more so given Covid’s still unfolding impact on our very socioeconomic fabric. They’re not alone either. But in a market made up of stocks, even among blue-chip companies, worries Wall Street has become disconnected from reality couldn’t be further from the truth.
Overall, the fact is that more than 50% of Dow Jones stocks are showing relative weakness and even larger losses than the bellwether barometer. In fact, a full two-thirds of today’s special breed of dog are sporting declines more than double the index.
However, this hidden-in-plain sight truth of sorts makes for a well-balanced and even lopsidedly strong counter to claims the market has gone too far. And right now, though, some of those “other select companies” price charts insist there are still Dow Jones stocks to buy. That said, these three names are:
So, let’s dive in.
Dow Jones Stocks: IBM (IBM)
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Our first Dow Jones stock to buy are shares of IBM. The diversified technology giant topped Street profit and sales forecasts on Tuesday, and the report marked a “big success for new CEO Arvind Krishna” which also saw improved margins and solid growth in the company’s cloud business. In fact, CNBC’s Jim Cramer says IBM is a buy.
Moreover, the price chart agrees, and investors will also get paid a dividend yield of 5.17% to start a position.
Technically, IBM is closing in on its fourth full month of consolidating inside March’s massive bottoming candlestick. The March low found support off a multi-decade trend-line while concurrently establishing a slightly, ill-formed ‘W’ base.
Overall, it’s bullish. And with shares also sporting bullish stochastics confirmation, this is one of the best Dow Jones stocks to buy today.
Walgreens (WBA)
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Walgreens is the next of our Dow Jones stocks to purchase right now. The global pharmacy and wellness retailer is one of the more ill-looking blue-chips out there. To date, WBA shares have slid more than 31% in 2020. That said, blame it on the coronavirus. Many, including the company, rightfully have after Walgreen’s recent earnings miss.
However, the good news for today’s Walgreens investors is being able to approach shares under the basic assumption: most bad things do eventually come to an end. A long-term price chart showing encouraging oversold signs of bottoming inside a deep price zone backed by Fibonacci — prior highs and trend support goes a long ways towards that end.
The recommendation for this Dow Jones stock is to wait on collecting a yearly dividend yield of 4.6%. I’d suggest monitoring shares for a second attempt to move back through May’s bottoming candle high of $43.70 to capture more calculated capital appreciation, as well as income, with this above-the-market purchase strategy.
Boeing (BA)
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The last of our three Dow Jones stocks is Boeing, and it’s the worst of these dogs within the Dow. It’s year-to-date performance finds shares grounded by more than 45%. This is due to company missteps and the coronavirus’ impact on the airline industry’s foreseeable future.
I’m certain that’s not exactly news. However, there are factors being played out on the price chart for investors to be optimistic that BA stock can recover.
Technically, since bottoming in mid-March on climatic volume, shares of Boeing have managed to put together a series of two higher-highs and higher-lows. It’s confirmation of an emerging uptrend. And with the latest pivot forming off the 50% retracement level of BA’s post-Covid rally, conditions are shaping up for lift-off.
That said, buying Boeing shares aren’t without its risks of course. The coronavirus doesn’t appear to be miraculously going away, and the company also has to earn its way back into the trust of investors if new highs are going to be possible in the future.
That’s not all, though.
Going back to the price chart we just finished offering a bullish flight plan for, there are indications shares of this Dow Jones stock are overbought. Additionally, earnings are a week out — but with risk comes reward. And with no income generating features these days, capitalizing on stock appreciation with a slightly out-of-the-money, intermediate-term bull call spread has almost never looked better.
Investment accounts under Christopher Tyler’s management does not own any securities mentioned in this article.
