Indexes Fight Fight Back After Sharp Losses; Micron, Lam Research, Jabil In Focus

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0:38Ken Shreve:Good afternoon, everyone, and welcome to Stock Market Today for Thursday, March 19th, with the major indexes battling back after some sharp losses this coming as oil eased today. And we'll get into that and more stocks along with my colleague, Ken Shreve, who joins me now. Ken? Hey there, Ali. Yeah, another resilient day for the market. We did undercut some key levels, but like you said, a nice rally off lows. So I wanted to take a look at three stocks. We have to take a look at Micron. That was a big earnings report that everybody was watching. So we'll take a look at Micron. Also wanted to take a look at another chip equipment stock.

1:21We looked at one yesterday. Let us take a look at Lamb Research, a big liquid name in the group. And finally, JBL, contract manufacturer, JBL.

1:33Ken Shreve:All right. It sounds like a plan. We'll get to those stocks first. A look at the major indexes. So the good news is, Ken, that we closed off lows with the Nasdaq down three-tenths of a percent by the end of the session. Same for the S &P 500 in terms of the percentage decline, but intraday undercutting levels that we don't want to be undercutting. And yet again, another close for the NASDAQ below that 200-day line. Yeah, this is just chop and slop. It's very difficult. On the one hand, we were encouraged to see buyers come in and lift the NASDAQ off a low. It was down as much as 1.4 % on an intraday basis.

2:23We got an undercut of that round number of 22 ,000, and we got some serious lows violated. I don't know that we undercut that low way, way far back, that 21 ,898. I think we probably did undercut that one as well, which would be significant. I think we did, didn't we?

2:46Ken Shreve:We did. 21 ,851 versus 21 ,898. Yeah, yeah. So on the one hand, you do like to see shakeouts like this, and maybe this was enough of a shakeout. But as you can tell by the NASDAQ, I mean, it's been a pretty good pullback here. Market still seems to be in an uncertain spot here. Probably some of this technical damage is going to take a little time to sort out. We're still, at this point, looking for day one of a rally attempt here. We've taken out a lot of lows. So we'll see how a new rally takes shape. But we'll just look for a day one of a rally attempt. What lifted the market off lows today?

3:32There were some comments from Benjamin Netanyahu from Israel, some quotes from the Times of Israel. He, for the first time, said that Iran is no longer able to enrich uranium. He said they're no longer able to make ballistic missiles. And then President Trump in the capital today, he's hosting the prime minister of Japan, saying he has no plans to put boots on the ground in Israel. So there were some positive headlines coming out regarding the war. We did have oil close well off highs. WTI, crude oil futures, I think at one point today went over$100 a barrel. That's not good. But you can see USO here did reverse after crossing$120, but that reversed lower.

4:30So the market did like that. And then we had that 10-year Treasury yield, which ran all the way up to 4.33 % today. That closed well off highs. I just checked that. That was trading down to around 4.26 % just recently. So we got some weakness in oil prices, and that 10-year Treasury yield backed off highs as well. So I think the market kind of liked that as well. So, you know, nice close off lows. I saw some decent action, again, in the chip equipment group today. And the micron earnings were blowout. We'll talk about that in a little bit. And, yeah, S &P 500, good shakeout here as well. We didn't undercut that low of 65.21 from back in November.

5:21But, you know, nice close off lows for the S &P as well.

5:26Ken Shreve:And we'll have to see if today's action does qualify as a pink rally day. I guess we'll have to see how the rally attempts progress here for the major indexes. But we did close below the 200-day line for the first time for the S &P here. So that a notable technical breach for this major index. Just wanted to point that out. Yeah, the breadth in the market today, you know, as the indexes came off low, it's not surprising to see breadth improve quite a bit. It was actually barely negative on both exchanges, about eight to seven negative on the NASDAQ. And it was just a little bit worse on the NYSE, maybe three to two negative.

6:15So not that much of a difference. Declining stocks over advancers by just a small margin on both the exchanges. So not too bad. Lots of selling in gold stocks. Again, boy, the gold stocks, GLD, top-rated gold stocks in our database, just really, really getting taken to the woodshed again. Mining stocks, whether it's copper, FCX, southern copper, aluminum, Boy, the miners really got creamed again today. So seeing a lot of selling in that area.

6:53Ken Shreve:Lots of good color there. WSJ's Take on the Week gives you a leg up on the world of money and investing. We cut through the noise and dive into markets, the economy, and finance. I'm Telus Demos. And I'm Miriam Gottfried. We break down the big trades, speak with the key players, and find out what's important for investors in the week ahead. Subscribe to WSJ's Take on the Week wherever you listen to podcasts. You mentioned the chip sector. We have to take a look at Micron and that post-earnings reaction. I think all in all, especially with the damage in the major indexes, it hung in there quite well.

7:34Ken Shreve:Down 3.7 % by the close, but off its lows, finding support around some shorter-term moving averages. And as we pointed out on the show yesterday, Ken, this is a stock that ran up a lot heading into the report. So tell us more about the results and what you're seeing in the chart. Well, I think people who are long micron are pretty happy with the way that the stock traded today. It basically came down and tested its short-term moving averages. This was initially a breakout from a classic double bottom base. You can see the structure has the look of the letter W, the second leg down that you're pointing out, undercut the first leg down, which served to shake out sellers.

8:25And then it crossed that pivot. So when the stock pulled back today, it basically retested the middle part of that W. It basically retested the buy point, which coincided with a test of those short-term moving averages. That's where the stock bottomed today. And then it closed off lows and basically closed pretty much at the last buying area. So this was just a classic retest of short-term support levels, classic retest of a prior buy area. I mentioned on yesterday's show we did add SanDisk to the leaderboard model portfolio earlier in the week. And, you know, SanDisk had a nice day as well. It broke out from a similar structure, a similar type double bottom pattern.

9:16It came down just like Micron did today and retested that double bottom entry, 691.54, you can see there. And then it reversed higher. So both stocks, I think, handled Micron's earnings report very, very well here. Micron's numbers were quite good. The market expected it. But it's been a while. Well, you know, to see numbers like this, it's not often. Obviously, we've been seeing great numbers from NVIDIA for several quarters in a row. But when you look at the numbers that Micron reported for the March ended quarter, 682 % earnings growth, 196 % top line growth. The midpoint of their guidance for the, I think this would be the June ended, March, April, yeah, the June ended quarter was, I think,$10 billion above expectations.

10:18Yet the stock initially sold off sharply, but it was just kind of a sell the news scenario. The stock had been rallying sharply ahead of the results. But I think the market realizes that, you know, the growth runway here is going to be strong for a while. And, you know, this is still a very compelling growth story. So, you know, if the market were healthier, I would say that this stock is, you know, back in a buy zone here, which it is. But, you know, I think that the overall market conditions here, you know, without a follow through day, technically, we're still in a downtrend in the market here.

10:57And market health is so important when you're trying to make money in individual stocks, even though Micron showed very bullish technical action today, and it's definitely back in a buy zone. We still have a lot of just market risk out there. And we, you know, we just, with the market tide not flowing positive yet, there's still a lot of risk owning individual stocks right

11:23Ken Shreve:Absolutely. But if you do already own it with some profit cushion heading into the report, it seems like probably could have just held your position. Given today's action, like you said, it's showing its leadership capabilities here with the type of action today, even though it was down that 3.8 % on the day. It's less than ATR, which is 5.9%. So if you compare it from that perspective. Also, not only is it showing this outstanding triple-digit top and bottom line growth, and this may be obvious, but it's seeing that acceleration, that quarter after quarter after quarter now of accelerating growth.

12:08Ken Shreve:So this is the hot area of the market right now, Ken. Yeah, yeah, it sure is. And I think what Micron said even surprised the market. I think another reason that the stock sold off maybe a little bit more than expected, they did raise their capital expenditure plan maybe a little more than expected, only by about$5 billion for their fiscal 2026. They raised it by$5 billion. And now it's going to be a little over$25 billion, which was a little more than expected. But, you know, not too bad. So, you know, just a really great earnings report. And overall, a pretty decent reaction to see the stock close off lows here.

12:58But just a reminder that we're still in a market with a fair amount of risk out there. You know, so we just want to see signs of a new uptrend. So we still need to see signs of the first day of that rally attempt and then just look for another sign of strength. So I will say we're still seeing a lot of pretty decent action there, seeing some selling, some harsh selling in areas of the market, but still seeing a lot of leading stocks out there like the data storage stocks and some other stocks that we're going to be looking at today that are still acting quite well. So not ready to give up on this uptrend yet, but recognizing some of the risks that are out there for sure.

13:44Ken Shreve:Well said. And in the meantime, we'll put this at the top of our watch list. Let's also go to LRCX. That's on the list for us. Lamb Research Outside Day Upside Reversal right at a key moving average here, Ken, that 50-day up 4.1 % on the day. So a notable chart here to discuss as well. Yeah, and we talked about a chip equipment stock yesterday, Nova, and a lesser known name in the chip equipment group. Now, Lamb Research is obviously a big, liquid, large cap name, a much more widely held name in the chip equipment group. But like this outside day, upside reversal back through the 50-day moving average, there's a lot of really good price action in the chip equipment group.

14:37A lot of these chip equipment groups, a lot of these chip equipment stocks, they make the machinery that Micron uses to produce their memory and storage chips. So when you see all this strength in names like Western Digital and Micron and Seagate and SanDisk, it stands to reason that a lot of these chip equipment stocks are going to be doing well because they make the equipment that Micron and others use. So just seeing broad-based strength among these chip equipment stocks. And we swing over to the weekly chart for LAM research and just look and see what this test of the 10-week moving average looks like.

15:18I think I'd like to see a base set up here. So we're three weeks into a new base here. So the relative strength line is starting to poke into new high ground already. So I think you really need to be just assembling a watch list of stocks in the semiconductor equipment group because they may have more left. Probably found 10 or 12 stocks in the group that I'm watching here. Some small, some mid, some large cap. But Lamb Research, again, a very consistent track record of growth. Definitely an institutional quality name in the group. And to see it back above its 10-week moving average with a very healthy relative strength line, definitely a name worth watching here.

16:05Ken Shreve:Yeah, we like to see it. Okay, moving on to JBL, ticker JBL. And this is in the Electronics Contract Manufacturing Group, 46 out of the 197. That we track having a strong week right at that 10-week line, up 5.8 % or so, it looks like, for the week here, Ken. A strong day-to-day going closer to that daily chart, good support at the 50-day. Yeah, look at this relative strength line. It's already, you know, poking into new high ground, and J-Bill is still about, you know, 6 % off its high. So these contract manufacturers, you know, back in the day, contract manufacturers used to be really boring.

16:51They used to make these, you know, the printed circuit boards for the PC makers. Now they are AI stocks because they're making components for AI data centers, whether it's making components for AI servers or they're making components for the liquid cooling systems that names like Vertiv are known for or Modine. So the contract manufacturers are now basically AI stocks. That's where they're growing like gangbusters. So I think J-Bell is in a very good position here. Again, if the market was in a good spot here and in a confirmed uptrend, I think J-Bell is actionable. Again, going to the weekly chart here, relative strength line is in a new high ground.

17:34It's just kind of sitting right at its 10-week moving average, holding support, not extended. The fundamentals are outstanding here, a nice growth runway. So still seeing, again, still seeing a lot of good-looking stocks out here with decent fundamentals, Many still capitalizing on this AI growth story. Certainly the contract manufacturers are in that boat. And just love the relative strength line here. And J-Bell looks pretty good to me.

18:13Ken Shreve:Yeah. Interesting stuff there. And we did want to check out an earnings report after the close, Ken, that I know you've been watching. And that's FedEx. It looks like shares are up 5%. This is a turnaround story here. I don't have the numbers just yet, but it looks like the street, at least that early reaction, is a favorable one here for FedEx. Yep. And this is the common theme, you know, another stock coming down. And look at the price action today on a down day for the market. Nice reversal, upside reversal off of the 50-day moving average in heavy volume. It looks like it's going to be extending gains at least in the after hours.

19:01So, yeah, obviously haven't had a chance to look at the report. But, yeah, nice turnaround story here. They've been in cost-cutting mode. They're near the tail end of a big cost savings plan. I think they have another billion to go over the next year. but they've made a lot of progress. And yeah, nice technical setup here as well. So stock looks like it's up about 4 % in extended trading. So I think the market likes what they see so far. One other chip equipment stock, it's actually not a chip equipment stock, but PL is the symbol here. Planet Labs, I believe, is the symbol here. And this looks like another after-hours mover We're setting up in a cup with handle base here.

19:48A little more on the speculative side, tracked in the telecom services group, cable, satellite up 7%. Looks like it could try to gap out of a cup with handle base. Good relative strength line here as well. Good fundamentals. What's the composite rating here? 80, 89 it looks like. So we'll see if this one can muster a breakout as well. but Planet Labs looking higher as well.

20:17Ken Shreve:All right. Well, thanks so much, Ken. We appreciate it. My pleasure. See you next time. All right, everyone, that is it from us for today. And we'll be back with more tomorrow morning on IABD Live, investors.com slash IABD Live for all the details. We'll see you then. And then Webby and I will see you back here tomorrow after the close for Stock Market Today to wrap up the week. See you then.

20:59Ken Shreve:How do you prepare for the week ahead? Why not start with thinking about your investment portfolio? On WSJ's Take on the Week, we break down the top headlines. If the AI narrative hits a wall, there's no question in my mind that the U.S. economy starts to go perilously close to recession. And we go behind the biggest stories in markets, the economy and finance. I'm Telus Demos. And I'm Miriam Gottfried. We break down the big trades and speak with the key players. I'm very focused on making sure that we can get inflation back to target. Let us help you start your week. With WSJ's Take on the Week, subscribe wherever you listen to podcasts.