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In a robust market session, the Dow Jones Industrial Average surged over 200 points, highlighting the broadening strength of the current market advance. Meanwhile, Warren Buffett’s StoneCo (STNE) experienced a quiet day after six consecutive sessions of gains.
The subdued action could bode well for StoneCo, a Brazil-based fintech company and part of IBD’s credit card and payment processing industry group. The stock is forming the right side of a cup base, with potential for a handle formation.
Investors are advised to monitor STNE’s performance, observing if the midcap growth stock can shape a handle on the cup pattern. On Monday, STNE stock showed a modest 0.3% increase to 13.91, indicating potential momentum. IBD previously noted a potential tradable rally starting on November 1, coinciding with the Nasdaq’s 1.6% gain in higher turnover. The rally commenced on the fourth day of a new rally attempt following the Federal Reserve’s decision to keep short-term interest rates unchanged.
Amid this, the Nasdaq led the market with a more than 1.1% gain on Monday, marking its third consecutive weekly rally and an impressive 11.7% increase during the process.
The S&P 500 also performed well, gaining 0.7% and eyeing its fourth straight positive week. This notable winning streak has not been seen since May 19, with a five-week run-up and a subsequent pullback.
Despite a sharper-than-expected decline in the Leading Economic Indicators (LEI) index for October, investors appeared unfazed. The market displayed resilience as Thanksgiving approached, with the stock market set to close on Thursday and open for a shortened session on Friday.
In Dow Jones leaders, Boeing (BA) gained over 4%, receiving an analyst upgrade from Deutsche Bank and securing bullish momentum above its 200-day line. Meanwhile, Salesforce (CRM) outperformed the general market, rising 1.7% and earning a spot on the IBD Leaderboard watch list.
Outside the Dow Jones, airlines, including American Airlines (AAL), faced challenges despite signs of a robust travel economy. AAL, up 0.9%, regained its 50-day moving average but remains below the declining 200-day line. The overall outlook for airlines remains uncertain, with issues such as labor disputes affecting industry dynamics.
Investors are encouraged to focus on high-quality growth stocks with a Relative Strength Rating (RS) of 85 or higher. The market continues to present opportunities, with various sectors displaying strength and potential entry points emerging.
