Dow Rises, AI Leaders Slump; Micron, GE Vernova, TechnipFMC In Focus

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0:40Ed Carson:Good afternoon, everyone, and welcome to Stock Market Today for Tuesday, May 12th. It's Alyssa Coram here, tripping over my words because you know what else tripped up today? Leading tech stocks. So they did, most of them, close off their lows. We'll talk about that as well as the Dow's outperformance today. Joining me now to do just that is my colleague, Ed Carson. Ed, what do you have for us today? Yeah, I want to take a look at one of those leaders that fell, Micron, but also GE Vernova and Technip FMC. As always, some interesting action underneath the surface. So we will get to that. But first, let's take a closer look at the major indexes.

1:19Ed Carson:The Nasdaq composite and the leadership there is something that we've been tracking very closely, Ed. So we'll start with this chart, the NASDAQ, down on the day by about 7 tenths of a percent. But intraday, it was quite a bit worse. Meanwhile, the S &P 500 down a little less than 2 tenths of a percent today, managing to close above that round psychological number at 7 ,400. The Dow, as mentioned, was up on the day by about 1 tenth of a percent, reversing higher in the session. And we'll take a look at small caps as well with the Russell down some 1%, but also closing off lows. So maybe a little damage out there, Ed.

2:03Ed Carson:But seeing where we closed, I think, was quite encouraging. Yeah, it was very encouraging. And these things were going to happen. I mean, we didn't even touch the 10-day line on the NASDAQ, and it was down over 2%. So, I mean, you have to put these things in perspective. It's not fun when you have growth stocks and they're down 5%, 7%. Some of them are down 10 % intraday without really any news. But that's just something you have to be aware of. And it's just important to have rules for how to deal with some of these things. Like, you know, recent breakouts, some of them struggled and some of them may have shaken people out.

2:37And that's what you have to do. Follow those rules. There are some extended winners and we'll talk about a little bit. But, yes, it's encouraging here. And, of course, what happens next is what matters. If we fall 3 % tomorrow, then today's afternoon bounce nobody will care about. We'll just think about today as part of that retreat. If we bounce from here, then it's like, yeah, obviously everybody shouldn't have been worried at all. But, you know, you have to trade in the here and now, not looking backward.

3:03Ed Carson:Yeah. And so, I mean, there are a lot of strategies for how to handle this type of action. And a lot of it, as you know, Ed, and you've been talking about, it depends on what style of trader you are. Are you taking aggressive action near the highs before stocks get hit harder? Or are you a little bit more patient waiting to see how the day, how the week unfolds? So as long as you know what that strategy is for yourself, that's what matters, right? I know Swing Traders and our Swing Trader platform was a bit quick on the trigger to protect gains and take profits, whereas some others may be there waiting for that 10-day moving average.

3:53Ed Carson:I know that that's something that you like looking at, Ed. It is. It is. You know, like, especially when it's coming down there. And sometimes they sell on the way up. That's more when I feel like things are just going crazy and it feels climaxed hop. I don't think that most of these leading stocks, some of them got amazing runs. They don't feel like climax tops. But, you know, and it's also and we're in a power trend and something that you've brought up. That's often a time to hold for longer. So that's something to weigh in there. So oddly enough, even as you're thinking about maybe should I take some profits in some of these winners?

4:25You should also be thinking about how can I add in to some of the winners? Like if they do pull back to a certain way, if they do it in the right way, if they come down gracefully, you know, there's it's not easy. how that might all work out. So you'd have to be constantly balancing. And a swing trader, yeah, they were quick to exit some positions. They were also buying stuff at the end of the day. I didn't do a whole lot. I don't like trading that much. I also have things to do in my life, and I actually can look at stock charts all day. So everybody has to work with a system that works for them.

4:55But yeah, have rules. And again, you're not going to top tick. You're not going to get the absolute top. What you're trying to do, whether it's this multi-year run or in particular short-term runs is get the bulk of runs. And if you do that, you're going to be very successful.

5:11Ed Carson:Yeah. And I also really think that it makes a lot of sense to sell in portions, whether that's in thirds or quarters or even just half instead of the all or nothing type situation. I think that even though, hey, I mean, when we've had some bad earnings gap downs, I'll be the first to admit that I'll just dump it all. You know, it depends on the situation. But I think in this type of situation where traders hopefully are in some of their holdings that they've had since on or around that April 8th follow through day, hopefully they have some nice gains. I think that gradual approach, having the lines in the sand, like the 10 day, the 21 day, and maybe the 10 week moving average as levels where you can have those staggered stops.

6:01Ed Carson:I think that that is something that makes a lot of sense in this type of market. I completely agree. Yeah. And like you said, and hey, maybe adding, right, at those levels or shorter digestions as well. Okay, let's take a look at the S &P 500. So the NASDAQ at that round number of 26 ,000, the S &P at 7 ,400. Ed, and this finishing really nicely off lows today. Yeah, we almost have a little mini pause here with the S &P, though, and that tight closes relatively last few days. It'd be, you know, really great if it could sort of go sideways around here, let the 10-day line catch up, 21-day line at least to approach things.

6:43I mean, we had that with that a few weeks ago where pause for a few weeks, the 10-day line caught up, and then we had some solid gains. I mean, that would be great. So we'll just see from there.

6:55Ed Carson:Yeah. Is it going to be a 10-day test? Is it going to be a 21-day test ultimately that we see at some point? Only time will tell. All right. What else should we take a look at, Ed, to give us a better sense of some of the underlying contributing factors to today's action? Maybe take a look at oil and treasury yields. And, yeah, that bounced. And, you know, that's getting towards the highest levels again. And there is that concern. It's something to watch out for. It's interesting that techs fell more than the others. So there just seemed to be that seemed to be an excuse for profit taking. But this is this is a factor.

7:35And it's a factor for why a lot of energy stocks are still doing well. So which is why we're going to be looking at one of those names.

7:42Ed Carson:Mm-hmm. Okay. And you mentioned yield. So let's go to the 10-year. You know, we've seen this trade more or less in tandem with the price of oil. And we had some inflation data come out, right, Ed? Yeah. And core inflation was a little higher than expected. Some of that was like inflated, as it were, because of some weird data from six months ago. That was like, it was like, so it wasn't maybe as bad as you'd think, but still it was up there. This was the highest close since July. So, you know, that matters. That matters for borrowing. That matters for mortgage rates and other things. So that's just on there.

8:20And that's why if you look at a lot of consumer names and you combine higher gas prices and higher mortgage rates, and you're seeing a lot of consumer-related stocks down. Now, again, those aren't usually the names that we've been following that much, but there are some strains out there. And again, this isn't the worst in the world. We could easily fall back over again. But it's just another thing out there for that, you know, was probably weighing on the market a little bit. But again, the market held up pretty well, given where oil is and given where treasury yields. I mean, we could talk about these things, but the fact is that the market is really close to all time highs after a big run.

8:54Ed Carson:And we didn't even mention ongoing Mideast stuff happening, right? Yeah. I mean, that's obviously the thing with the RAND. And there is the concern. I mean, I put my news hat on and go like, the thing is, it looks like, hey, the world's going to be in a real problem in June for oil. But it's like the market is not worried yet. I mean, maybe tomorrow it will be. But, you know, so, yeah, there's a lot going on. There's President Trump flew to China. He's going to meet with Z on Thursday, Friday. So a lot of news, good or bad, you know, could come out of that. So it's still a busy week, a lot of uncertainty.

9:32but this is why you generally look and pay attention to what the market is doing.

9:37Ed Carson:Yeah. And you mentioned consumer. So let's go to retail. Seeing that taking another hit today, Ed. So a not so good week shaping up. Yeah. We've had a number of companies, you know, basically warn about consumers a little bit and we'll get Walmart and Target and TJX, and a number of names, Home Depot reporting next week. So get a sense from some big names. But yeah, this is not good in other names in this sort of, you know, that are sort of consumery not doing well. Mm-hmm. And we know chips have been the high flyers in this market. So down 2.6 % today, well off the lows, still above the 10-day line.

10:23Ed Carson:But Ed, we've been talking about just how impressive this advance has been. So wouldn't be surprising to see just a little, even just a little bit of a break here for the chips. It would not. And these are the winners. I mean, when we look at the NASDAQ, so this came down, but again, like the NASDAQ, it came well off. I have a position in this and, you know, and because this doesn't go up and down 10%, I can sleep at night with this name, even though it can have bad days. And it was not good. It was down probably four plus, you know, 5 % at one point. I didn't see. But yeah, so it could easily take a break.

11:00Just digesting gains, you know, so it's just something to watch for. But yeah, this is still acting well.

11:07Ed Carson:Today, we helped a latte for Sam coffee shop get an insurance quote simply and easily and made sure a floral delivery van was able to make someone's day. We're the Hartford with decades of experience insuring millions of unique small businesses. When it comes to your small business insurance, one size absolutely does not fit all. Get a quote or find an agent today at thehartford.com slash small business. Okay, next on our list, let's go ahead and pivot to the stocks that we want to cover. So here's a look at Micron. Look at this close off lows here, Ed. So that's some impressive strength there.

11:57It was looking pretty bad intraday.

12:01Ed Carson:So to see this stock closing down 3.6 % on the day, pretty close to the prior day's low, I would say is a big win for those who are long Micron. Yeah. And I certainly people could have sold some. I mean, I would, you know, might wait for the 10 day line, but you could have sold on Friday, which was the biggest point increase, I think, in the run. I mean, I, and that's something, you know, just something to note. It's like, okay, things are getting, and then it jumped up again on Monday, which is, I mean, so, you know, there was, it was certainly becoming parabolic. And that round number at 800.

12:35Ed Carson:So yeah, there were signs to maybe take a little off the table. And again, you might be like, if you're not thinking, I'm going to, you always have to be thinking about these things. Am I willing to suffer a 30, 40 % correction? You know, with the risk that it could always be more, it always could be more. And it's like that, just something, you know, or what did you want to wait to the 21 day before selling? Would you want to wait for the 50 day line? Because it's easy to, you know, because we just had a pretty big sell off when you look it back in January and then it tried to break out and sold off again in March.

13:04So it was a pretty big drop pretty quickly. So that can happen. But at the same time, you didn't have to do anything. You could, you know, this would, and this one may just keep on point. There's a lot of, a lot of great fundamentals to this name. They're just, and so, you know, it definitely could go up a lot higher. This is just one of those game changer type names. All those memory space, you know chips plays are doing well so it's just something to be watching for what are your rules and just follow them i mean and uh you know you might say i have more convictionist name and there's reasons for that but just just follow those things and uh you should be uh you should do pretty well but uh yeah really nice nice afternoon reaction for sure and i think this is

13:47Ed Carson:what makes active trading such a challenge right and so fun because you can make arguments for for both things, right? It is very extended and by a number of metrics could be due for some sort of pause or pullback here. But you also have all of these echoes of the late 90s, right? Except this time is different because you have actual fundamentals behind these companies, actual growth, actual businesses that are profitable. So you have the fundamental story, but then you also have the technical picture too. Is it short-term extended? Yes. But what did a lot of stocks do in the 90s? They ran, but you also were tested during that time.

14:42Ed Carson:It wasn't easy and it wasn't straight up. So another thing that we like looking at is sort of the rate of ascent. And to your point, too, you had a couple of gap ups. The rate of ascent has picked up. So what kind of digestion will we get here? I think that is going to be so interesting to see. Are we going to get three weeks tight patterns out of this more flag like structures, shelves or bases or just just pullbacks to shorter term moving averages? So it'll be interesting to see how. One more thing. When you're doing partial profits, you're hoping to be wrong. You're hoping that you're, you know, need to cut, not, you know, that, and you're hoping that it keeps going up.

15:29It's something Scott St. Clair says a lot. It's like, I'm hoping to be wrong. I'm hoping that if I sell 10%, 20 % or a third, that the rest keeps running. That I, because if you, you know, so that's, that's why that partial thing can, can work. You can still hold a big gain. And also, if you think about it, if you bought this at 400 and it's near 800, that's getting to be a really big position. So when it starts falling 10%, that's a big thing of your position, even if you just bought it a couple of months ago. And if you bought it a year ago, if you bought that as a full position, this could be like an enormous part of your portfolio.

16:02So there's those things in there. So taking a little better is sometimes just for portfolio management because you do not want to see your whole portfolio down 15 % a day because one stock had a really bad day. So lots of things out there. Really good. And look, this is the best problem to have. Gosh, how should I take care of a stock? How should I take profits or not in a stock that's gone, you know, that's doubled or more, you know, in a few weeks? Yeah. Wow. There's definitely a lot of problems that are worse.

16:33Ed Carson:Yeah, exactly. And IABD's chief content officer, Chris Gessel, has been in this one since the Cup with Handle breakout last September. The relative strength line was leading on that breakout, and he's been updating the IABD Live audience about his hedging strategy with this one. So some good information there for someone who has done a great job with this trade. Absolutely. And like you said, portfolio management, you know, thinking about those drawdowns. Okay, let's move on and take a look at GEV. Full disclosure, I did pick up some shares off of the 21-day line yesterday. And when I was looking at a lot of growth stocks today that were getting hit, I was very impressed by how little this one was down in comparison.

17:25Ed Carson:Now, it only has a 21-day ATR of 4.4 % versus something like 8.8 % or greater. But even still, it also closed nicely off lows. This one down just fractionally on the day, Ed. So continuing to find support at the 21-day. Yeah, I think you could have bought it off the 21-day line. Another one, maybe a trend line. You know, so maybe the 1100 mark might be a spot. So it's still not crazy extended from the 21-day line. Because that would be, if you bought it, you have to be willing to scale out. I mean, if you do add-on buys, you have to be willing to take those back off. And that'll happen at times.

18:03And I don't do this as much as I should, in part because I have trouble getting out. So that's me. But this has been doing very well. Demand just seems like they're going to have strong results for a long time. Obviously, you never know how much is baked in. But their turbines are sold out for years and years to come. Uh, and so this one is, has really, really impressive, uh, fundamentals going out for a few years. I mean, those earnings are just tremendous, uh, right now. And so, yeah, I mean, it could be that this ends up, you know, it could be that the 21 day line doesn't work and it falls back to the 50 day line, but you know, it's, it's, it's nice to see it fight here.

18:44Even if it doesn't, it's still a positive sign rather than like cascading right down the 50-day line, say, and then say, please buy me if this one comes down or if it forms a new base. So there's different ways that this could happen. But I think, yeah, this is one, I talked about looking for add-on buy points or places to maybe enter a new position. This is around this area. This is a name. And the lower ATR, I think, makes me a little more comfortable. You're not going to get probably that 15 % spike without earnings on this name on any given day, but you're not going to open tomorrow down 8%.

19:18So, you know, no, sorry, but you're probably not going to. I mean, obviously the market, the market does something terrible. You could, but it just doesn't seem likely that there's that this one has that, but you're right. So I think I like the ATRs that aren't as extreme with doing add on buy points because you're not as likely to just get killed right away on those names.

19:40Ed Carson:Yeah, totally. And I think this has a good balance of strong prior uptrend, but it's not extended. So it's strong, but it's not out of position. So I feel like that's been sort of the struggle in recent weeks is, well, what do I buy? Because a lot of the leading stocks are extended and not giving you that chance. So here's something that has had a nice move, but it's giving you that chance now after this orderly pause slash pullback here. Okay, let's round things out with a look at FTI. This is a nice bounce off of the 50-day line today, Ed. Yeah, and I like the 50-day line bounce. I like it even more that it got above the 21-day line because there was in the morning, it seemed to be stuck around there.

20:30I wasn't paying attention all the day, but it seemed to be stuck there while I was on IBD Live. And yeah, so I think this is the first time it's touched the 50-day line in months and certainly since that breakout. That was like from several months ago back at the beginning of January. So this is an opportunity here. The real estate strength line has come down a little bit, but that's partly because oil prices were coming down a little bit. And it's after a prior uptrend. It's like, look, anything that's paused is going to have some impact. I think the concern on relative strength lines are the stocks that have gone sideways and now are coming up after going sideways or having a really deep base.

21:10And, you know, this is this is just a different situation. I mean, you know, you're not going to find stocks that are RS lines at new highs in this kind of market that are in range that are in places to buy right now. Exactly. So this is probably the leader in a solid group. It's not, you know, obviously oil prices matter, but it's not like if oil prices fall 7 % tomorrow that this is likely to fall like a producer would, like an Exxon or, you know, some other names that are going to be so directly affected by the price. So, you know, getting an oil tailwind but not going to be, it's not that whipsaw kind of action back and forth.

21:50So this has been a leaderboard name for several months, but this one setting up again sort of for the first time. And I guess there was maybe one several weeks ago, there was a short consolidation, but first bounce of the 50-day, 10-week line that people could use.

22:06Ed Carson:Exactly. It's been respecting that for quite a while. So that's a good guardrail there to use. And we've seen a couple quarters here of improving bottom line growth and top line growth, picking back up to double digits in the most recent quarter as well. All right. Are you seeing anything for NXT out after the bell? Yes. Okay, let's go there. NXT had strong results. And you can see how this one is gapping up. It tried to break out on Monday. It's had some messiness. And so can it clear this? You can see a bunch of times it's done that. But making a nice move here, really, really beat views on revenue.