The Dow Jones industrial average led the way in the third quarter. The blue-chip index in July pivoted from the choppy action of the first half of the year and into a clear uptrend. The top five Dow stocks of the quarter were: Apple (AAPL), Walgreens Boots Alliance (WBA), Pfizer (PFE), Merck (MRK) and Microsoft (MSFT). Apple stock and Microsoft stock are two of the largest companies in the world by market capitalization.


Apple Stock

Apple stock likely has the most compelling chart action of the top Dow stocks. The tech giant is presenting a buying opportunity as it rebounds off the 10-week line for the first time since its August breakout. The first two pullbacks to the 10-week line after a breakout are considered chances to add shares to a position.

Apple stock popped 22% in Q3, more than any other Dow stock. The bulk of that came in August, when shares ran up nearly 20% following strong Apple earnings on July 31.

After another week of trading action, we could see a new chart pattern with a 229.77 buy point. But Apple stock has not yet met the minimum-length requirement for the formation of a proper base.

Walgreens Stock

It might come as a surprise that Walgreens Boots Alliance was one of the top Dow Jones industrial average stocks of Q3, given that it’s essentially flat for the year. But in the third quarter the drugstore chain surged 21.5%. Even with the strong gains, Walgreens stock has not yet presented a buying opportunity this year.

The SEC on Friday fined Walgreens Boots Alliance $34.5 million, saying its former CEO and CFO “misled investors about the company’s public financial goal” over multiple reporting periods prior to the close of its 2014 merger with Alliance Boots. Walgreens in its settlement with the SEC says it “neither admits nor denies” the allegations.

When Walgreens issues its quarterly report on Oct. 11, analysts expect earnings growth of 11% on 12% sales growth. That would mark deceleration from the prior quarter.

Pfizer Stock

After reporting accelerating quarterly earnings and sales growth in late July, drugmaker Pfizer broke out of a six-month-long consolidation in heavy volume. Pfizer stock is now extended 12% from the 39.53 entry, rising 21.5% for the quarter. The Dow stock is now nearing its all-time high from 1999 after trading essentially sideways for several years.

Merck Stock

Dow Jones industrial average member Merck stock has similar chart action to its drugmaker peer Pfizer. Shares in recent months broke above yearslong sideways action and are headed toward old highs. But unlike Pfizer stock, Merck stock has not presented a buying opportunity this year.

And, while Pfizer’s relative strength line is at a near-term high, Merck’s RS line is lagging its Aug. 20 peak despite trading at a higher share price. Still, Merck stock gained 16.9% in Q3.

Microsoft Stock

Lastly, Microsoft stock climbed 16% in the third quarter, and is extended 18% from a flat base that it shaped in Q2. The Dow stock has found support at its 50-day line multiple times along its run. Microsoft is now the third largest company by market cap, behind Apple and Amazon (AMZN), passing Google-parent Alphabet (GOOGL) several months ago to earn that designation.

Dow Jones Industrial Average: Top Dow Stocks

As of Friday’s close, the Dow Jones industrial average in Q3 gained 9%, outpacing gains of about 7% for the S&P 500 and Nasdaq. Dow stocks Johnson & Johnson (JNJ), Visa (V) and Cisco Systems (CSCO) also turned in notable performances over the past three months.


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