Sunday, February 25, 2024

Dow Jones Futures Surge: 7 Stocks To Buy Now As Market Rally Strengthens

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Dow Jones Futures Surge: 7 Stocks To Buy Now

The stock market rally is showing resilience and momentum, overcoming some weakness in mega-cap tech names like Meta, Google, and Nvidia. Small caps and equal-weighted indexes are leading the charge as the uptrend broadens out across sectors. This shift could set up further gains if money rotates into lagging groups. As the rally reaches new highs, Dow Jones futures are surging and several stocks across industries are breaking out of bases into buy zones.

The Dow Jones topped 52-week highs on strong 2.4% weekly gains, lifted by industrial, financial and travel stocks. The S&P 500 rose 0.8% to a fresh 2023 closing peak, while the Nasdaq edged up 0.4% despite big tech drags. The Russell 2000 small-cap index stands out with a 3% weekly surge to decisively clear its 200-day line. Sharp moves in the U.S. Treasury yield curve and crude oil also boosted sentiment.

Equal-weighted ETFs handily outpaced their cap-weighted peers as market breadth improves. The Invesco S&P 500 Equal Weight ETF (RSP) climbed 2.45% to hit a three-month high. Software names were standouts, but ridges also broadened across infrastructure, mining, travel and financial sectors.

As the rally enters a new phase, investors can diversify their exposure beyond AI and chip plays. Areas with catching-up potential include finance, travel, energy, construction, machinery and even small-caps.

Leaderboard stocks Armlon (ARM), United Rentals (URI), D.R Horton (DHI) and Palantir Technologies (PLTR) are flashing buy signals or reclaiming buy points. Other breakouts include insulation installer TopBuild (BLD), hotel chains InterContinental Hotels (IHG) and Marriott (MAR).

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Here are seven stocks benefiting from the ongoing rally:

Arm Holdings (ARM)

The U.K. chip technology firm Arm Holdings operates as a semiconductor IP licensing giant. ARM designs energy-efficient chips used in virtually all smartphones globally, including Apple’s iPhone. This pivotal role gives it an immense ecosystem. It came public in September 2022, quickly becoming one of the largest chip IPOs ever.

On Friday, ARM stock popped 3.9% to 63.90, clearing a 63.92 buy point in a cup base going back to its first weeks of trading. ARM is also breaking a downtrend as it forms its right side. Bullishly, Friday marked a record closing high as ARM builds on recent strength. Its relative strength line hit new highs in November before consolidating tightly for a month.

United Rentals (URI)

United Rentals provides construction and industrial equipment rental services worldwide. It seems poised to benefit from heavy infrastructure spending across North America. URI stock surged 5.4% on Friday to clear a 496.93 buy point in a cup base going back to August.

The heavy machinery rental giant been finding support at its 50-day line recently as it works on a potential breakout. URI stock’s RS line hit a new high on the breakout day, reflecting bullish momentum.

D.R. Horton (DHI)

D.R. Horton is a leading U.S. homebuilder with operations across 90 markets. While the housing market is cooling somewhat, demand remains relatively strong as tight supply sustains pricing power. DHI stock advanced 2.5% Friday to clear a 130.79 entry from a cup base going back to early September.

Shares regained their 50-day line on Tuesday then broke downtrend resistance on Wednesday. Holdings surged over 11% for the week, signaling institutions see value. DHI stock could be an inflation hedge if shelter prices stay elevated.

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TopBuild Corp (BLD)

TopBuild installs building insulation and other services for the residential and commercial construction sectors. Its focus on energy efficiency positions it well if green building activity sees more spending.

On Friday, BLD stock rose 3.1% to 304.84, clearing a 300.10 buy point in a cup base going back to mid-October. Its Relative Strength Rating recently hit a best-possible 99, indicating market-beating performance over the last 12 months. TopBuild stock is also finding support near its rising 50-day moving average.

InterContinental Hotels Group (IHG)

InterContinental Hotels Group owns and operates over 5,800 hotels across 100 countries. Its portfolio includes flagship brands like InterContinental, Kimpton Hotels and Holiday Inn. IHG stock popped 3.5% on Friday to clear a 79.20 buy point in a cup base going back to September.

Shares regained their 50-day line last week then gapped up Friday on nearly double its average volume. Travel demand should continue expanding globally next year. IHG stock offers a diversified play on the ongoing travel rebound.

Marriott International (MAR)

Marriott is the world’s largest hotel chain with over 8,100 properties across 139 countries. The stock has lagged slightly in 2022 but could be gearing up for a move as travel and tourism accelerate. On Friday, MAR stock climbed 3.25% to 209.28, closing above the 208-209 resistance level.

Marriott is working on a possible handle with 211 as the official buy point. Recent weeks have seen an encouraging uptrend in rising volume. If travel demand stays strong, the stock could be in early stages of a sustained up-move.

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Palantir Technologies (PLTR)

Palantir provides data analytics software to government agencies, aerospace, energy and manufacturing clients. It been investing heavily in sales and marketing expenses to drive faster top-line growth.

PLTR stock edged up 1.1% Friday to 20.27, finishing a 5.6% weekly advance. Shares reclaimed a 20.24 buy point from a double bottom base going back to May. Its strong RS line is right at 52-week highs. Volume was modestly above average Friday but remains light overall since clearing the buy point.

Conclusion: Rally Broadening in Bullish Sign

The stock market uptrend looks strong as breadth measures flash green and more sectors join in on gains. Small caps and equal-weighted indexes taking leadership is a healthy sign of rotational demand. As mega-cap tech titans take a backseat, money could flow into financial, travel, industrial and commodity-related names.

But risks remain from still-high inflation and monetary policy uncertainty. The past week saw investors cheer cooling inflation signals and rising hopes for a less aggressive Fed in 2023. Markets are now pricing in rate cuts as soon as March. But policymakers warn more hikes could come if price spikes re-accelerate.

In the meantime, recent breakouts ARM, URI, DHI and other leaders are flashing buy signals in early stages of potential big runs. Their ability to sustain moves could signal whether the rally has enough underlying momentum to handle looming headwinds.

Mezhar Alee
Mezhar Alee
Mezhar Alee is a prolific author who provides commentary and analysis on business, finance, politics, sports, and current events on his website Opportuneist. With over a decade of experience in journalism and blogging, Mezhar aims to deliver well-researched insights and thought-provoking perspectives on important local and global issues in society.

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