On Tuesday February 4, 2015, we mentioned an emerging bullish-flag pattern in the Dow Jones Industrial Averages. To be sure it is not a classic pattern as the flag-pole is not too tall, the flag is not in one piece and the flag-formation has taken too long. But it is still a consolidation and in any case a pattern has to complete and confirm before one can act on it.
In the previous post we had stated that the index has to close strongly above 17,700 level for the pattern to complete. Yesterday, Dow did rise up to 17,782.22. In fact, an hour before the close it looked as if it will close above the upper-bound of the flag. Then the newswire were lit-up with ECB tightening the screws on Greece and the market gave up all gain and DJIA closed below the upper limit.
The early morning action on Thursday February 5, in the Dow futures is giving the indication that the market will open higher. Hopefully it will stay up for the rest of the day and close above the upper-limit of the flag and thus will complete the pattern. Off course, a pattern completion does not mean that it can not reverse.
In the earlier post we had identified five Dow components that out-performed the index over the previous one day and 7-day period. Not all of them were able to maintain that performance yesterday.
As crude oil again flailed, CVX and XOM greatly underperformed. So did CAT and GS. Only HD was able to maintain a place in the top five out-performers.
If we extend the relative strength analysis to a longer period then we get some more names. Here are the top five Dow performers over 52-week, 13-week, 4-week and 1-week periods:
|1||United Health (UNH)||Boeing (BA)||Boeing (BA)||Disney (DIS)|
|2||Home Depot (HD)||Home Depot (HD)||Disney (DIS)||Visa Inc (V)|
|3||Intel Corp (INTC)||United Health (UNH)||United Health (UNH)||McDonalds (MCD)|
|4||Disney (DIS)||Wal-Mart (WMT)||United Technology (UTX)||Boeing (BA)|
|5||Nike (NKE)||Disney (DIS)||Home Depot (HD)||A&T (T)|
The top five one-day performing Dow components are Disney, Visa, Home Depot, Travelers Companies and Microsoft.
Walt Disney (DIS) has figured in all of these ranking list. Home Depot (HD) has appeared four times. Boeing (BA) and United Health (UNH) have made it three times.