The Dow Jones Industrial Average ended September back in a new uptrend amid a month of volatile price action. Top Dow Jones stocks to watch in October are Amgen (AMGN), Apple, Home Depot (HD) and Microsoft.
There are clear winners — and losers — through the first nine months of 2020. The top three performing Dow Jones stocks through Oct. 2 were Apple (AAPL), newly-added Salesforce.com (CRM) and Microsoft (MSFT) with gains of 54.0%, 52.4% and 30.8%, respectively.
Amid the coronavirus stock market rally, the tech-heavy Nasdaq is up 30.1% for the year through Friday’s close. Meanwhile, the S&P 500 is up 7.8%, while the Dow is up 0.2% year to date, through the Oct. 16 close.
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What Is The Dow Jones Industrial Average?
Founded in 1896 with 12 stocks, the Dow Jones Industrial Average is one of the oldest stock market indexes. There are 30 Dow Jones stocks designed to serve as a bellwether for the general U.S. stock market. Other major stock indexes include the technology-heavy Nasdaq composite and the S&P 500 index — an index of the 500 largest companies in the United States.
Best Dow Jones Stocks To Buy And Watch
|Company Name||Symbol||Closing Price||2020 YTD Performance|
Source: IBD Data As Of Oct. 9, 2020
Amid the current stock market rally— according to the IBD Big Picture — investors should be focusing on the stocks that held up the best during the recent market weakness. These stocks will have strong relative strength lines, and could be some of the new uptrend’s stock market leaders.
Potential Dow Jones stocks to buy and watch in October that are in or near buy zones include Amgen, Apple, Home Depot and Microsoft.
New Dow Jones stock leader Amgen is tracing a flat base with a 265.07 buy point, according to MarketSmith chart analysis. An early entry exists at 260.16. Shares fell 0.8% Monday. Amgen is a recent addition to the Dow Jones Industrial Average, along with Honeywell International (HON) and Salesforce.
According to the IBD Stock Checkup, Amgen shows an 89 out of a best-possible 99 IBD Composite Rating. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths.
A potential flaw is the stock’s lagging relative strength line. The RS line measures a stock’s price performance vs. the broad market.
Apple stock is in the process of trying to find support near its key 50-day support level. Apple shares lost 0.4% Monday, and are about 10% off their 52-week high.
Shares are tracing the right side of a new cup base, offering a 138.08 buy point.
Home Depot Stock
Home Depot stock is tracing a flat base with a 293.05 buy point. Shares moved up 0.3% Monday. The home-improvement retailer broke out above a 259.39 buy point in a cup with handle on July 15.
Bullishly, the stock’s RS line is nearing a new high, indicating sharp stock market outperformance.
Microsoft stock fell 0.6% Monday, as the stock approaches a 232.96 buy point in a cup base.
Microsoft is an IBD Leaderboard stock.
Tip: Before making any investment decisions, be sure to check current market conditions, and use IBD Stock Checkup to see if your stock gets passing ratings for the most important fundamental and technical criteria. To get ongoing chart analysis, and alerts to buy and sell signals, check out the unique features, stock lists and chart annotations at MarketSmith, Leaderboard and SwingTrader.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the stock market.
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