U.S. stocks rose for a second straight session Monday as shareholders waded back into the market, hunting for bargains amid signs of stability after one of the worst weeks for equity benchmarks in two years.
Shareholders also digested the newly released plan by the Trump administration to revamp the nation’s infrastructure against the backdrop of mounting concerns about accelerating inflation.
What did the main benchmarks do?
The Dow Jones Industrial Average +1.70% rose 410.37 points, or 1.7%, to 24,601.27, with 28 of the 30 components trading higher.
The S&P 500 index +1.39% advanced 36.45 points, or 1.4%, to 2,656, while the Nasdaq Composite Index +1.56% climbed 107.47 points, or 1.6%, to 6,981.96.
Last week, despite a rally late in Friday’s session, all three indexes suffered weekly losses of at least 5%, the biggest since early 2016. The S&P 500 and the Dow entered correction territory on Thursday – defined as a decline of at least 10% or more from recent highs.
What’s driving markets?
The rebound in equities has gone global, with most major markets posting strong gains. In the U.S., energy stocks, which were among the biggest losers last week, were among the biggest winners, thanks to bargain hunters.
The Trump administration unfurled a plan to spend $200 billion over 10 years on grants to states and cities to improve highways, airports, bridges and tunnels and other infrastructure.
What’s on the economic docket?
There was no major economic data on the calendar Monday, but the data highlight of the week will be January consumer price inflation, due Wednesday. Even if it comes in slightly ahead of expectations, spooked shareholders could trigger yet another stock selloff, analysts warn. A survey of analysts polled by FactSet are forecasting headline inflation to rise 0.3%, and core inflation, which strips out food and energy costs, to gain 0.2%. (Source: MarketWatch)
Top Pick for Tuesday: Apple Inc (NASDAQ: AAPL)
Apple Inc (NASDAQ: AAPL) has grabbed attention from the analysts when it experienced a change of 4.03% in the last trading session to close at $162.71. A total of 60,752,287 shares exchanged hands during the intra-day trade contrast with its average trading volume of 32.18M shares, while its relative volume stands at 1.89. Relative volume is the comparison of current volume to average volume for the same time of day, and it’s displayed as a ratio. If RVOL is less than 1 it is not In Play on this trading day and Investors may decide not to trade it. If RVOL is above 2 it is In Play and this is more evidence Investors ought to be in the name. When stocks are *very* In Play one can see a RVOL of 5 and above. The higher the RVOL the more In Play the stock is.
Day traders strive to make money by exploiting minute price movements in individual assets (usually stocks, though currencies, futures, and options are traded as well), usually leveraging large amounts of capital to do so, therefore they trade on Stocks in Play. In Play Stocks are volatile enough to produce good risk and reward trading opportunities for both bull and bear traders intraday. Most company stocks have very little volatility. They generally move extremely slowly and they only produce big price swings when the company produces good or bad trading results, which may only happen a couple of times a year at best.
In deciding what to focus on – in a stock, say – a typical day trader looks for three things: liquidity, volatility and trading volume. Liquidity allows an investor to enter and exit a stock at a good price (i.e. tight spreads, or the difference between the bid and ask price of a stock, and low slippage, or the difference between the predictable price of a trade and the actual price). If a stock does not have good liquidity then it may take some time before a broker is able to negotiate a deal to buy or sell a stock and the broker may not be able to get the sell or buy price that the trader is looking for. This is a problem for day traders and it could mean the difference between a profitable and non-profitable trade.
Traders have different rules for what constitutes liquidity and a good guide is the volume of trades and volume of shares that are traded each day. 100,000 shares traded per day would be a minimum for most traders and some require 1,000,000.
Trading volume is a gauge of how many times a stock is bought and sold in a given time period (most commonly, within a day of trading, known as the average daily trading volume – ADTV). A high degree of volume indicates a lot of interest in a stock. Often, a boost in the volume of a stock is a harbinger of a price jump, either up or down.
Volatility is simply a measure of the predictable daily price range—the range in which a day trader operates. More volatility means greater profit or loss. After a recent check, Apple Inc (NASDAQ: AAPL) stock is found to be 4.41% volatile for the week, while 2.51% volatility is recorded for the month.
The stock has a market cap of $831.92B and the number of outstanding shares has been calculated 5.11B. Based on a recent bid, its distance from 20 days simple moving average is -3.79%, and its distance from 50 days simple moving average is -4.87% while it has a distance of 1.80% from the 200 days simple moving average. The company’s distance from 52-week high price is -9.66% and the current price is 23.22% away from 52-week low price. The company has Relative Strength Index (RSI 14) of 43.59 together with Average True Range (ATR 14) of 4.41.
Past 5 years growth of AAPL observed at 7.90%, and for the next five years the analysts that follow this company is expecting its growth at 11.68%. The stock’s price to sales ratio for trailing twelve months is 3.48 and price to book ratio for the most recent quarter is 5.93, whereas price to cash per share for the most recent quarter are 10.78. Its quick ratio for the most recent quarter is 1.20. Analysts mean recommendation for the stock is 2.00. This number is based on a 1 to 5 scale where 1 indicates a Strong Buy recommendation while 5 represents a Strong Sell.
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