The Dow Jones Industrial Average gained as stocks traded mixed. A trio of Warren Buffett stocks are nearing buy points. Coinbase (COIN) and Riot Blockchain (RIOT) rose as bitcoin gained. Meanwhile, Microsoft (MSFT) fell after an analyst note.
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There were breakouts aplenty despite the measured action. Skechers (SKX), Builders FirstSource (BLDR) and Tri Pointe Homes (TPH) all tested entries.
Nasdaq Lags As Small Caps Jump
The Nasdaq lagged the other major indexes and was basically flat. Lucid (LCID) was a strong performer here, rising almost 6%.
The benchmark S&P 500 rose 0.3%. CarMax (KMX) rocketed more than 10% on a Q4 earnings beat. It is having its best gain since April 17, 2020, when it rose 10.4%, according to Dow Jones Market Data.
The S&P 500 sectors were mostly positive. Real estate, energy and materials were the top performers. Technology was the only area in negative territory.
Small caps were outperforming for a second day in a row, with the Russell 2000 up more than 1%. Growth stocks were also excelling, with the Innovator IBD 50 ETF (FFTY) also lifting over 1%.
Dow Jones Today: Microsoft Hit After This Call
The Dow Jones index managed to squeeze out a gain heading into the close. It was up nearly 200 points, or 0.5%.
Caterpillar (CAT) was performing well again, rising nearly 3%. It is pulling away from its 200-day moving average.
Microsoft stock was the worst performer on the blue chip index. It fell nearly 2% but remains above its key moving averages. It is trading above a 276.86, according to MarketSmith analysis.
The stock was dipping after UBS trimmed its estimates on its Azure cloud platform. The firm holds a neutral rating on MSFT with a 275 target.
“Based on our (approximately) 20 calls with AWS/Azure customers and partners, we conclude that customer efforts to optimize/trim their cloud spend will be deeper and last longer than most think,” analyst Karl Keirstead said in a note to clients. “Relative to the consensus view that we’re deep enough into these efforts such that the deceleration in cloud growth can begin moderating meaningfully as early as (Q2 of 2023), we conclude that such efforts will persist at a high level throughout 2023.”
Warren Buffett Stocks Eye Entries
Buffett is hailed by some as the greatest investor of all time. A trio of stocks owned by his firm Berkshire Hathaway (BRKB) are currently eying entries.
Insurance play Aon (AON) is getting close to a cup-with-handle entry of 328.43, MarketSmith analysis shows.
Aon’s IBD Composite Rating comes in at 82 out of 99. Earnings are a key strength, with its EPS Rating a strong 88 out of 99.
Mastercard (MA) is forming a double-bottom base with an ideal entry point of 369.25. The stock cleared its 50-day moving average Tuesday, a bullish sign.
MA stock boasts an IBD Composite Rating of 93. Big Money has been buying the stock of late, with its Accumulation/Distribution Rating coming in at B.
Buffett is also a holder of Leaderboard Watchlist stock Floor & Decor (FND), which currently sits near an entry of 102.71. Floor & Decor operates 191 warehouse-format stores and six design studios across 36 states. It holds an EPS Rating of 97 out of 99.
Berkshire is in the news after Buffett said he wants to add to his Japan holdings. Berkshire has raised his stake in each of Japan’s top five trading houses — Itochu, Mitsubishi, Mitsui, Sumitomo and Marubeni — to 7.4%.
The Oracle of Omaha said in an interview that additional investments in Japan are “always a matter of consideration.”
Coinbase Stock, RIOT Jump As Bitcoin Gains
Coinbase gained amid another rise in bitcoin prices.
COIN stock was up almost 6% but remained well below a cup-with-handle buy point of 85.48. It is now up about 108% so far this year.
Bitcoin, the most famous cryptocurrency, was up almost 2% Tuesday. It is now up more than 80% in 2023, an impressive run by anyone’s standards.
Other digital currency plays also rose. The Grayscale Bitcoin Trust (GBTC) jumped over 4%.
But it was bitcoin mining play Riot Blockchain that impressed the most as it soared about 16%.
Outside Dow Jones: Skechers Leads Breakouts
With the stock market in a confirmed uptrend it remains key to stay on top of breakouts.
Skechers is in a buy zone after clearing a cup-with-handle entry of 47.80. Volume was low, which is a flaw.
Builders FirstSource is actionable after rising above a flat base buy point of 90.31. The relative strength line has moved to fresh heights. Volume was 26% above average in late trading. Ideally, volume should swell at least 40% on a breakout.
Earnings are a key strength for this building products play. It holds a near-perfect EPS Rating of 97.
Tri Pointe Homes was among the homebuilders that made bullish moves. It is in a buy zone above a flat base entry of 27.80. Volume was tracking well below average levels, however.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
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