After reporting impressive quarterly results, shares of software companies Zscaler (ZS) and DocuSign (DOCU) soared by double digits on Friday morning.
After a short decline, the Dow gained 1%. There was nevertheless a 1.2% increase in the S&P 500. The Nasdaq Composite was up 1.7%, led by technology companies. Thanks to solid gains among small companies, the Russell 2000 index jumped 1.6%.
NYSE volume was more significant than Thursday, while Nasdaq volume was lower.
After trading at their lowest level months earlier in the week, crude oil futures continued to rise late in the week. The price of a barrel of oil increased by almost 2.6%, reaching $86.15. The 10-year Treasury yield, however, eased to 3.26 percent from 3.28 percent but remained around multimonth highs in trading activity.
After breaking below this crucial support level last week, the S&P 500 has recovered and is now trading higher than its 50-day MA.
The Big Picture columnist Tom Dispatch wrote on Thursday, “If the market is to stage a significant recovery, you should be prepared to act swiftly by keeping tabs on top equities that are getting close to their respective purchase targets. There might be some potential next steps.”
Growth Stocks to Keep an Eye On Outside the Dow
The Pioneer Although the IBD 50 ETF (FFTY) underperformed the market last week by falling below its 50-day moving average, it gained 1.3% on Friday, making it the best performing ETF of the day.
Cross Country Healthcare (CCRN), a top stock on the IBD 50, had a significant price increase. Despite this, the stock market recovered some of its early losses and is now up by around 1%.
The healthcare staffing firm opened wide, then broke out above a cup-with-handle buy target of 27.87 before retreating from the entry. Gains of almost 10% have been realized by shareholders this week, and the relative strength line for the stock is now at an all-time high.
Due to the increased need for healthcare workers, Cross Country was one of the companies whose stock prices rose due to the pandemic. As a result, the health care staffing stock announced a profit of 15 cents per share in 2019. In 2020, the number increased to 46 cents; in 2021, it grew to $3.06. According to IBD’s MarketSmith, analysts anticipate profit growth of 53% in 2022, reaching $4.69 per share.
Sociedad Quimica Y Minera (SQM), a fertilizer producer, also climbed over the 113.80 buy target after breaking out of a cup with a handle pattern. As a result, the stock’s relative strength line rose to a new high as it gapped up 3.7% before settling to a gain of roughly 1%.
Some of the other top gainers in the IBD 50 were Talos Energy (TALO), SM Energy (SM), and Ovintiv (OVV). On Friday morning, prices for each item were up by more than 4 percent and approaching new highs in the form of cups with handles.
Earnings Season Drives Changes in These Stocks
Kroger (KR) shares increased early on Friday after the nation’s largest grocery store operator posted top and bottom line earnings above analyst expectations.
After raising its full-year profit outlook, shares jumped 5.5% on high volume. Earnings per share (EPS) came in at 90 cents, up 12 percent from the same time last year and far higher than the 83 cents that Wall Street had predicted.
With a total of $34.6 billion, sales increased by 9% year-over-year, just above projections. As a result, Kroger raised its profits forecast for the year by 10 cents to $4.95 to $4.05 per share from its June projection.
Zscaler, a cybersecurity company, had its stock price rise by more than 19% after reporting impressive profits. According to the San Jose, California-based company, adjusted earnings per share came in at 25 cents, up 78% from 14 cents a year before.
In addition, revenue increased 61% year-on-year to $318.1 million in July-September. For Zscaler, the consensus forecast was 21 cents per share in profit on $305.4 million in revenue.
DocuSign, a corporate software provider, rose over 10% on results that were above estimates but trimmed their gains to roughly 8% afterward.
With quarterly earnings per share of 44 cents on sales of $622.2 million, the electronic signature firm soared when the results surpassed Wall Street’s expectations. But, for the time being, the stock is continuing its long downward trajectory.