Cisco Systems and JPMorgan Chase with dividend yields of 3.15% and 3.09%, respectively, are potential members of the “Dogs of the Dow” next year.
(photo: Getty Royalty Free Images)
Conventional wisdom says that the “Dogs of the Dow” should be the ten components of the Dow Jones Industrial Average with the highest dividend yields. My version of the Dogs consists of stocks that have a minimum dividend yield of 3% plus a little common sense.
As 2018 began General Electric (GE) qualified to be a member of the Dogs for 2018 but I vetoed its membership saying that the stock will likely be removed from the Dow 30 before 2018 came to an end and I referred to some analyst opinions that the dividend was not safe.
This year there are four Dogs that ended October in bull market territory and Merck (MRK) with a dividend yield of 3.01% may no longer qualify.
Cisco Systems (CSCO) and JPMorgan Chase (JPM) with dividend yields of 3.15% and 3.09%, respectively, are thus potential members of the “Dogs of the Dow” for 2019.
Cisco ended October at $45.75, up 19.5% year-to-date and in bull market territory, 22.5% above its 2018 low of $37.35 set on February 6. The stock is also 7.5% below its 2018 high of $49.47 set on October 3.
JPMorgan ended October at $109.02, up 1.9% year-to-date and up 6.7% from its 2018 low of $102.20 set on July 6. The stock is also 8.6% below its 2018 high of $119.24 set on September 20.
The daily chart for Cisco Systems
Courtesy of MetaStock Xenith Courtesy of MetaStock Xenith
The daily chart for Cisco has been above a “golden cross” for a long time, which indicates that investors can add to positions on weakness to the 200-day simple moving average at $44.22, which was doable between October 14 and October 30. The stock is now between two horizontal lines, which are my monthly and quarterly pivots at $44.80 and $46.16, respectively. My semiannual value level is $41.15.
The weekly chart for Cisco Systems
Courtesy of MetaStock Xenith Courtesy of MetaStock Xenith
The weekly chart for Cisco is negative with the stock below its five-week modified moving average of $45.96. The 200-week simple moving average or “reversion to the mean” is $33.03. The 12x3x3 weekly slow stochastic reading is projected to decline to 57.10 this week, down from 66.49 on October 26.
Trading Strategy: Buy weakness to my semiannual value level at $41.15.
The daily chart for JPMorgan Chase
Courtesy of MetaStock Xenith Courtesy of MetaStock Xenith
The daily chart for JPMorgan needs to continue to rebound to avoid a “death cross,” which occurs when the 50-day simple moving average falls below the 200-day simple moving average indicating that lower prices lie ahead. My key levels are below this formation as shown in three horizontal lines. My annual value level is $93.20 with my monthly value level at $104.58 and my semiannual pivot at $109.39.
The weekly chart for JP Morgan
Courtesy of MetaStock Xenith Courtesy of MetaStock Xenith
The weekly chart for JPMorgan is negative with the stock below its five-week modified moving average of $109.88. The 200-week simple moving average or reversion to the mean is $82.18. The 12x3x3 weekly slow stochastic reading is projected to decline to 32.03 this week down from 38.22 on October 26.
Trading Strategy: Buy weakness to my monthly and annual value levels of $104.58 and $93.20, respectively.
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I am CEO and founder at Global Market Consultant, Ltd., and an expert contributor to TheStreet.com. I hold an engineering degree from Georgia Tech and a masters degree from Brooklyn Poly and have 40-plus years experience as a trader, trading manager and research analyst at…
Richard Suttmeier, a former Treasury bond trader, has 45 years experience in the financial markets. He’s an engineer by education with a master of science degree.
