New York, NY — Even as the major indexes endure an intense market selloff, a handful of Dow Jones stocks are flashing bullish technical signals and nearing potential buy points. Microsoft, IBM, Walmart, UnitedHealth, and Amgen have formed constructive chart patterns and are holding up better than the broader market.
The recent slide in stocks has pushed the S&P 500 and Nasdaq into a correction, defined as a 10% decline from recent highs. The Dow Jones Industrial Average is down 9% from its August peak. Rising Treasury yields, aggressive Fed rate hikes, and geopolitical tensions have investors on edge. Picking a market bottom remains difficult.
However, some quality names appear to be weathering the storm. These Dow stocks could be primed for a rebound once the overall market stages a confirmed rally.
Microsoft Leads With Strong Earnings
Microsoft stands out with its relative strength line hitting new highs amid the selloff. The tech leader delivered robust fiscal first quarter results on October 25th, beating estimates on both the top and bottom lines.
Revenue rose 13% to $56.5 billion as earnings jumped 27% to $2.99 per share, according to the company’s earnings release. Azure cloud computing sales expanded 29%. The company also hit 1 million paid users for its Copilot AI tool.
Piper Sandler analyst Brent Bracelin boosted his price target on Microsoft to $425 from $400 while maintaining an Overweight rating, per TipRanks. He cited the company’s margin expansion as it ramps AI investments.
Microsoft stock rose 1% for the week to finish at $329.81. Shares are forming a base with an official buy point of $366.78. However, a move above last Wednesday’s high of $346.20 could offer an early entry. The stock could forge a handle over the next week.
IBM Exceeds Q3 Estimates
IBM reported better-than-expected third quarter results on October 19th, according to the company’s investor relations page. Earnings climbed 22% to $2.20 per share as revenue grew 5% to $14.8 billion.
IBM’s software segment grew nearly 8% while consulting jumped almost 6%, offsetting a slight decline in infrastructure. CEO Arvind Krishna said AI revenue was already in the hundreds of millions.
IBM stock ticked up 1.5% on the week to $142.52. Shares are tracing a flat base with a buy point of $151.93. Moving above last Friday’s high of $144.70 could provide an early entry. The relative strength line is at a 9-month high.
Walmart Gains Market Share
Walmart stands to benefit as consumers gravitate toward value, according to an October 18th research note from Tigress Financial seen on TipRanks. Analyst Ivan Feinseth reiterated his Buy rating and lifted his price target to $196 from $182. He cited Walmart’s positioning, grocery offerings, and digital initiatives.
Upcoming fiscal third quarter results on November 16th could show Walmart continuing to grow sales faster than key retail peers. Consensus estimates call for 4% revenue growth to $159 billion, according to Walmart’s investor relations site.
Last week, Walmart shares added 1.5% to $161.17. The stock is forming a cup base with a buy point of $165.85. The relative strength line has hit 52-week highs.
UnitedHealth Holds Key Support
UnitedHealthGroup reported strong third quarter results on October 14th, beating views on both the top and bottom lines. Earnings grew 13% to $6.88 per share as revenue expanded 14% to $92.4 billion, according to the company’s investor relations site.
Shares dipped 0.5% for the week to $524.66. UnitedHealth is tracing a long consolidation with a buy point of $546.78. The stock has forged a handle over the past month while the relative strength line trends higher.
BofA Securities analyst Kevin Fischbeck reiterated his Buy rating on October 16th and lifted his price target to $660 from $650. He sees 13–16% annual EPS growth regardless of the macro backdrop, per TipRanks.
Amgen Flashes Buy Signal
Biotech leader Amgen has undergone some consolidation after surging in mid-October on a slew of analyst upgrades. But the stock is still tracing a cup-with-handle base with a valid entry of $268.24.
Last week, Cowen analyst Yaron Werber boosted his price target to $336 from $293 while keeping an Outperform rating, according to TipRanks. TD Securities and Oppenheimer also raised their targets. Analysts see Amgen’s robust pipeline driving growth.
Amgen releases third quarter results this Wednesday. Consensus forecasts call for earnings to decline 2% to $4.08 per share but revenue to rise 1.6% to $6.53 billion, per Amgen’s investor relations site.
Last week, Amgen shares fell 6.2% to $261.57. The stock could use time to stabilize and build the right side of its base. But the strong uptrend in its relative strength line remains intact.
Even amid the broader market pullback, investors should watch for constructive action in these high-quality Dow stocks. With strong fundamentals and technicals, Microsoft, IBM, Walmart, UnitedHealth and Amgen are poised to potentially outperform on the next market upswing. But more confirmed signs of market strength are still needed before any buy signals trigger.
Want to receive these actionable market insights straight to your inbox? Subscribe below to receive our leading stock and market analyses each trading day.