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Dow Jones Inches Up; Tesla Stock Falls On This Whammy; 3 Warren Buffett Stocks Eye Buy Points

The Dow Jones Industrial Average reversed higher as stocks looked to end the week with gains. Tesla (TSLA) was forced lower on negative headlines. A trio of Warren Buffett stocks are near buy points, including RH (RH) and Aon (AON).


Meanwhile, a trio of noteworthy growth names made bullish moves. MercadoLibre (MELI), Copa Airlines’ parent Copa Holdings (CPA) and Flour (FLR) all offered entries.

Nasdaq Shines, IBD 50 Excels

The Nasdaq managed to fight out of negative territory to rise 0.4%. NetEase (NTES) impressed with a gain of more than 4%.

The S&P 500 also clambered higher as it gained 0.2%. Illumina (ILM) was a standout as it gained around 3%, but it’s chart is unremarkable.

The S&P 500 sectors were mixed, though a majority gained. Consumer discretionary and financials fared best, while real estate and industrials lagged. The small-cap Russell 2000 was up 0.3%.

Growth stocks impressed most, with the Innovator IBD 50 ETF (FFTY) rallying 0.9%.

Dow Jones Today: Caterpillar Stock Wiggles Higher

The Dow Jones Industrial Average continued to impress after it managed to reverse higher after early pressure. It was up fractionally.

Outside of the banking names, it was Leaderboard stock Caterpillar that impressed most on the index. CAT stock, which is extended past a 239.95 buy point, rose nearly 1%.

Intel was the stock lagging most on the Dow Jones today. The chip stock fell nearly 1%.

Warren Buffett Stocks Eye Buy Points

Many investors keep track on the portfolio of famous investors, and none is more popular than Berkshire Hathaway (BRKB) CEO Warren Buffett. A trio of stocks in his firm’s portfolio are either building bases or testing a buy point.

Aon stock is in a buy zone after clearing a cup with handle entry of 314.74, according to MarketSmith analysis. The relative strength line for the insurance stock is at new highs.

All-around strong performance has netted the stock an IBD Composite Rating of 90.

Floor & Decor (FND) is one to watch as it forms a cup base with a 102.25 buy point. The stock holds a powerful EPS Rating of 93. It is in the top 20% of stocks in terms of price performance over the past 12 months.

RH, formerly Restoration Hardware, is closing in on an entry at 338.71. It is a big favorite with institutions, with 71% of its stock held by funds. Forward earnings estimates are not ideal though, with EPS seen slipping 2% in the fiscal year ending this month.

A number of stocks within RH’s Retail-Home Furnishing industry group have been showing strength recently, including Arhaus (ARHS) and Ethan Allen Interiors (ETD), with the latter close to a buy point. This makes RH a stock worth keeping an eye on.

Tesla Stock Hit By These Negatives

Tesla stock was shocked lower after a spate of negative developments Friday.

First, the EV giant cut U.S. Model 3 prices by 6%-14%, depending on the trim. It also cut Model Y prices.

The firm, which is led by CEO Elon Musk, is aiming to make more models eligible for U.S. tax credits.

In addition, Guggenheim analyst Ronald Jewsikow downgraded Tesla to sell from neutral with an 89 price target. Wells Fargo analyst Colin Langan slashed Tesla’s price target to 130 from 230. However, Langan maintained an equal weight rating.

Tesla stock remains rooted below its major moving averages. Despite the day’s negative action, the EV stock has been rallying mightily of late. It is up more nearly 19% on its Jan. 6 low of 101.81.

Banks Stocks Dig In After Earnings

Big banks were showing grit after posting mixed fourth-quarter results early Friday.

Consumer banking behemoth Wells Fargo (WFC) reversed higher despite a mixed Q4 report. It was up nearly 3% after falling near December lows.

JPMorgan Chase (JPM) also rallied to turn in a nearly 3% gain. The stock dipped below the 138.76 buy point of its flat base, but is actionable once again. The company impressed investors by besting Q4 expectations.

Bank of America (BAC) and Citigroup (C), which both topped Wall Street views, were both up about 2%.

Outside Dow Jones: 3 Stocks Test Entries

MercadoLibre has moved clear of an alternate buy point at 1,039.49. It remains actionable from this entry.

The Latin America e-commerce play is also closing in on a longer consolidation pattern entry of 1,095.44. Stong all-around performance is reflected in its IBD Composite Rating of 95.

Copa Holdings is at the top of its buy zone past an 89.27 handle buy point. It surged in heavy volume after JPMorgan upgraded the IBD 50 airline stock to overweight from neutral. It also hiked its price target from 105 to 132.

The relative strength line hit fresh heights, a bullish sign. COPA is in the top 11% of stocks in terms of price performance over the past 12 months.

Flour has cleared a trendline entry within a flat base. The bullish action saw the stock added to the prestigious IBD Leaderboard list of top stocks.

It is also closing in on a proper buy point of 36.16. Its new pattern is second stage, which still counts as a favorable early stage.

Wall Street sees profits soaring at the firm, which manages big infrastructure projects. Full-year earnings are seen vaulting 84% in 2023 to $1.66 per share.

Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.


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