Small caps swaggered to a 1.4% gain for the Russell 2000 near midday Wednesday, as the major indexes did about half as well.
XAutoplay: On | OffThe Nasdaq rose 0.9% while the S&P 500 added 0.8%. Blue chips were up almost without exception as the Dow Jones industrial average popped 0.7%. Volume in the stock market today was running lower on the NYSE and higher on the Nasdaq.
In the 30-component Dow Jones industrial average, four stocks advanced 1% or more: Walt Disney (DIS), Caterpillar (CAT), JPMorgan Chase (JPM) and American Express (AXP). Volume was above average for Disney and JPMorgan but average to below average for American Express and Caterpillar.
Chart-wise, JPMorgan is the most attractive of the four. The money center has formed a 13% deep consolidation, which is shallow enough for a flat base. The buy point would be 94.08. However, the daily chart looks somewhat like a double-bottom with a potential entry at 89.23. The stock cleared the 89.23 entry in the first 20 minutes of trade Wednesday but then pulled back under the entry.
Money centers are in the bottom fifth among 197 industry groups, but JPMorgan has some quality support. Fidelity Contrafund (FCNTX), an A+ rated fund, increased its JPMorgan stake by 18% in Q1. Fidelity Magellan (FMAGX), an A rated fund, raised its stake by 6% in Q1.
In the Nasdaq 100, TripAdvisor (TRIP) scored the best gain, a 5% advance in heavy volume. The stock is a laggard with a Relative Price Strength Rating of 6, which means about 94% of stocks are showing better price action than TripAdvisor.
In the IBD 50, a computer-generated list of the best stocks in fundamentals and technicals, chip stocks rose. Chip designers Nvidia (NVDA) and Cirrus Logic (CRUS) popped by 2% and 1% respectively. Chip equipment makers Applied Materials (AMAT) and Lam Research (LRCX) each rose almost 1.5%.
Going into Wednesday’s session, the chip sector was No. 3 among 33 sectors that IBD rates for price movement and fundamental factors.
In price appreciation alone, the chip sector is up about 18% so far this year, trailing five sectors. The five top sectors by price appreciation alone are leisure, up about 25%; electronics, 23%; computers, 22%; software, 21%; and medical, 20%.