Is This The Bounce We Needed? Dell, KLA, Nebius In Focus

0:00Alissa Coram:Look, when people start to gamify investing, right? So when you think about people being rewarded with balloons and fireworks for trading, which we know is the more you trade, the worse offer you're going to be in the long run. I'm Joe Davis.

0:12Justin Nielsen:And I'm Christine Kashkari. And this is Season 2 of Better Vantage by Vanguard, an eight-part video podcast series hosted by custom content from WSJ and Vanguard.

0:31Justin Nielsen:Good afternoon, everyone, and welcome to Stock Market Today for Monday, June 29th. It's Alyssa Coram here and a great way to kick off the week with a powerful move. Is this the bounce we needed? We'll discuss the key levels that we are watching and some interesting stocks. Joining me now to do just that is my colleague, Justin Nielsen. Justin, what are we going to be taking a look at today?

0:55Alissa Coram:Well, it's back to some old familiar names, some of those leaders of the past. We're going to take a look at Dell. I do have a position there as it crosses 400 again. KLIC, which, gosh, a lot of these chips, they're just right back at new highs. And we'll also take a look at NBIS. I have a smaller position in that one.

1:15Justin Nielsen:KLIC or KLAC?

1:17Alissa Coram:I'm sorry, KLAC. I always flip those and I did that. You were just making sure I was paying attention. Exactly. I was. Yeah, KLA Corp, which is K-L-A-C.

1:29Justin Nielsen:Okay, good. I passed the test. All right. Nice.

1:32Alissa Coram:Well done. Gold star for Allie.

1:35Justin Nielsen:There we go. I'm just looking for my gold stars from you, Justin. All right. Let's take a look at the major indexes. Look at this power to kick off the week. The Nasdaq up almost 2.1%. Meanwhile, the S &P 500, we'll go to SPX there, Up 1.2 % on the day. So this is slightly delayed. We'll still have a little bit more of action to show there as the show progresses. But a great gain there at a key level. The Dow up 0.6 % and the Russell was down on the day. But just fractionally, they're still holding near high. So, I mean, the NASDAQ a little bit on the ropes here, Justin. A couple of closes below the 50-day line.

2:20Justin Nielsen:And then here we go. Are we back in rally mode?

2:25Alissa Coram:Well, it's certainly what I liked. What I liked about this action was we got support exactly where you'd like to see it. You know, we came all the way back down to that level just under twenty five thousand. We didn't undercut the lows of I believe it was June 9th where we got nice support, the 50 day moving average line. Now, granted, it didn't hold, but we held above that level. So that's important. Are we out of the woods? No, we still have some work to do, right? We have to get really clearly above that 50 day moving average line. We need to get above the 21 day moving average line again and hopefully, you know, turn things around.

3:04Alissa Coram:But I think today was a very interesting start. And let's go just real quickly, maybe look at a 15 minute chart, intraday chart, because it certainly was not apparent at the beginning. This is something we were talking about on IBD Live as it was happening. It was a nice start gap up. And then immediately it was like, well, there it goes. There goes the gains. But it really, again, did put in that low and it really went up very nicely from there. So a nice move here, a chance to kind of have a place, you know, as you saw here where it bounced. There was a real kind of clear area. and you were talking about this on the show, where you could get in, you could try it out and say, look, if it doesn't work, I've got a very clear place where I can cut my loss with very minimal risk.

3:54Alissa Coram:But imagine if this got back up to highs, that's a lot of potential return for very little risk. When we see that asymmetric risk, we kind of want to take that whenever we get a chance. Let's also, as you're showing here, the cues, a nice bounce right there at the 50-day moving average line. So that was positive. And then also let's go back to SPX and see that, you know, this was just barely closing below the 50-day moving average line. So the fact that this got the bounce here and I like how it kind of cleared the highs of the last week, basically, where we kept on hitting our head right for a little bit.

4:32Alissa Coram:And now it cleared that and also cleared the 21-day moving average line. So there was a lot to like about the day. A lot of it was a return to many of the names that we've been talking about for a long time. And I'd be remiss not to give a special shout out to the SOXX, SMH, whichever semiconductor ETF you like to use, because that was a very powerful upside reversal, outside day. So what do I mean by those things? When you kind of undercut the lows of the previous day or previous week, and then you're able to finish in the upper part of the range, and today we finished right at the top, that kind of action is an upside reversal.

5:13Alissa Coram:And typically what you expect after that is a continuation of that move. In addition to that, a lot of times you'll see wider spreads on the more important upside reversals. And in this particular case, the high is higher than the previous day's high and the low is lower than the previous day's low, which makes it an outside day or what some would call an engulfing day. and especially where you close becomes important on those because again, you would expect a little bit of a continuation of that move. If we had closed in the bottom part of the range, you would kind of expect more weakness to follow, but we close at the top.

5:50Alissa Coram:And so there's a lot to like about a lot of the stocks out there that had almost this exact look as SOXX. And so this is something to be aware of. And here again, we've got the lows of today acting as a very nice place to say, oh, if this doesn't work, I know exactly where I'm wrong.

6:09Justin Nielsen:Exactly. Very powerful, very compelling there in the semiconductor sector. And you talked about my thoughts on IABD Live this morning. I was taking a look at QQQ, the NADSAC 100 ETF. I've been trading the TQQQ leveraged version. But yeah, I mean, for those who like bounces off of the 50-day, we were served up one on a silver platter. Will it last from here? We don't know. But like you said, the point is you have a great level to manage your risk. So getting that pullback, then the bounce, a very defined risk for your trade there. And we closed above the 21 day line here as well. So next step, Justin, it seems like, you know, whether you're looking at the NASDAQ or the S &P or some of these other instruments, I mean, for the NASDAQ, it's right at the 50 days.

7:01Justin Nielsen:So we want it to get back above the 21-day. We know that the mega cap techs, the magnificent seven, has been quite the drag here. So that's why you're seeing that divergence in part from the composite and the NASDAQ 100. So we want to see that get back above the 21-day. That's key for the power trend. Can we hang on, Justin? Can we hang on? That's the thing. Is it only a matter of time before these levels cross? Or what should we be thinking about there? Because I know Webby is always big on let's get above the 21 day. Let's have, you know, the low above the 21 day for a couple of days in a row.

7:41Justin Nielsen:Is that all going to be a moot point if we if we do get that crossover? I mean, there's a lot there's a lot to unpack here with precedents that we've been looking at and the like. But what are your thoughts? Yeah.

7:56Alissa Coram:So keep in mind, you know, we would we would need a bit of power here in order to keep that 21 day moving average line from crossing over. But even if it does, that doesn't necessarily mean, oh, it's time to get your canned goods and go into the bunker here. You know, because, again, this is just pullbacks happen. Pullbacks are a part of any strong rally. there are going to be those times where you pause, especially after a rally as strong as we have. So you could see, even if we got above the 50-day moving average line here and consolidated a little bit, that might not be enough to keep that 21-day from crossing below the 50-day.

8:36Alissa Coram:But that doesn't necessarily mean we're destined for doom. Again, some sideways action or even a little bit of doodling around here wouldn't necessarily mean that this is a rally failure. Right now, again, because we've held these important levels, if we can continue to hold those, that's really what we're looking at as opposed to the moving average lines necessarily. And hey, it just might mean we have to wait a little bit longer for that power trend to reset itself. And all we need is 10 days above the 21-day moving average line, that 21 getting back above the 50-day moving average line. And we're back in business.

9:16Alissa Coram:So it's not insurmountable. So, yeah. And we've got a lot of other areas to be looking at in terms of obstacles to cross here, whether it's in this case, the 50-day moving average line, again, a very important one. You could certainly see that acting as resistance and, you know, getting turned away there. But let's see what the market does. And, you know, you might say it's a little bit reactionary. And it is. If you're a trend follower, by definition, you are reacting to what the market is doing. And that's OK. But you still manage your risk, have those levels. And I think that's what we're doing.

9:56Alissa Coram:Since you mentioned, I think it was a good point that you brought up, Allie, about the Magnificent Seven. Let's go ahead and take a look at mags because it really is important to kind of recognize what's been pulling down. You know, whenever you have a market cap weighted index and you've got a number of stocks that are over a trillion dollars and multiple trillions now, they are going to have an undue influence. And today, the Magnificent Seven were having a great day, up 3%, still below the 200-day moving average line. So that's not great. But here again, you've got a level here where if the mags fail, you kind of know when that happens.

10:35Alissa Coram:And you would expect that they're going to bring down the indexes along with them. But again, you had a lot of strength, a lot of bouncing there. Now it's just a matter of, hey, can we hold? And what does the Magnificent Seven do once they come up to their 200-day moving average lines, the 21-day moving average line and the 50? And remember, although we do focus a lot to start this show on the indexes, we always end with the individual stocks, right? because it's important that you're keeping an eye on what the leaders are doing. You can have a lot of variation in terms of what the indexes are doing versus what some of the leaders are doing.

11:14Alissa Coram:And we really wanna be focused on the leaders. The market is an important backdrop for everything, but at the end of the day, our portfolio is often made of individual stocks. And that's why we have our sell rules for individual stocks and everything else.

11:27Justin Nielsen:No doubt. Okay, let's progress with a look at another area of strength. You mentioned that upside reversal in the semis. Let's talk about cybersecurity. A standout day here. We talked about this a lot this morning on IBD Live. The Hack ETF, also CyberCIBR, another one in this theme. Just really looking great today with Hack up 3.9 % after an actionable entry on Friday.

11:56Alissa Coram:Yeah, so that's exactly right. You had basically the idea here is that you did pull back, but you stopped. The selling really stopped. It started getting absorbed by the buyers coming in. And in contrast to IGV, where a lot of the software stocks and especially, look, Microsoft is a big component in IGV. Hack really held up much better. The selling just stopped. And the fact that on Thursday, was it Friday or Thursday? I keep on getting these short weeks.

12:30Justin Nielsen:Yeah, which week are we in? I think last week had a Friday.

12:34Alissa Coram:We did have a Friday. We don't have a Friday this time around. We didn't the previous one, but yeah, we had a Friday here. And that Friday, we did see a move above resistance areas. So again, that was a clear indication that, hey, maybe this is on an upswing. You have a place where you can be, you know, be cutting your losses. I do have a position in HACC, but I've also been invested in some of the other leaders, including FTNT. That one has been looking very strong. PANW, Palo Alto Networks, you know, they're already at new highs. And I mean, look at the move on Palo Alto today. So yeah, very, very powerful CrowdStrike.

13:17Alissa Coram:I think that one is, you know, also looking a little bit more like HACC, you know, in terms of how it's just recently kind across that former resistance. And if you do have a position in CrowdStrike, don't panic. If over the next couple of days you see something funny going on, there is a split coming up. So I know back in the day we used to get splits all the time. And so you kind of knew about that. But now every now and then it catches people off guard when it happens.

13:44Justin Nielsen:Exactly. Yeah. I mean, Justin, there were so many to choose from in this cybersecurity group. BlackBerry was one that we talked about that's looking quite strong as of late. Look at that relative strength line, triple digit growth, Okta among the ones. And then what was the rubric? RBRK, Kathy Donnelly talked about that one on IBD Live on Friday. A little bit of a different position there, but just group strength all around. And this group is now ranked number two out of the 145 that we track.

14:16Alissa Coram:So yeah, a lot. And it wasn't that long ago that it was a lot lower than that. So whenever you're seeing something move up the ranks very quickly, that's something that, you know, we do like to pay attention to. And that's one of the reasons why every Monday we go over the industry group spreadsheet to kind of see what these movements are. And, you know, that's something for our IBD Live folks. They can download that spreadsheet and play around with it and see those color changes as they happen.

14:41Justin Nielsen:Yeah, they sure can. And we are so grateful for you compiling that and analyzing and sharing every week on IBD Live. It definitely helps us keep a finger on the pulse of those industry group shifts in real time. One more ETF to look at before we move on, and that is NASA, the space ETF. There was some, I believe there was some M &A news in this space today, up 10 percent, Justin.

15:11Alissa Coram:Yeah, and look, this got slammed, right? It did. A lot of these stocks were coming off very sharply. I think there was maybe uncertainty with the SpaceX IPO. But whatever the reason, they came down. But today, why was it up 10 %? Just as you said, M &A activity, Rocket Lab making an acquisition with, was it Iridium? And yeah, market applauded it. It sent a lot of these soaring. BSAT was up considerably. That was another one that kind of caught my attention. Is there anything? I mean, that was up 20, 24 percent or something like that. So is there anything to do do here? Not necessarily, but it's always important that you're just kind of aware what's what's moving.

15:55Alissa Coram:You know, maybe build a picture of why it's moving. In this case, I think Rocket Lab deserves a lot of the blame here.

16:02Justin Nielsen:Yeah. And I can see some traders who probably took advantage of the SpaceX today. You know, it wasn't really doing a whole lot, I think, on IEBD. I mean, just like everything, it kind of, you know, moved up and then filled the gap. So we didn't cover it on the show. But I do think as the day progressed, I could totally see some aggressive investors taking advantage of today's move in SpaceX. I think, you know, next stop, the highs of the day coinciding from the highs of a couple of days ago. And then the bar before that, we'll just see what date that was. The high of 176 and change on 622. Those are some of these alternative pivots that we're keeping an eye on in this.

16:44Justin Nielsen:Now, MAG-8, whatever we're calling it now, stock here, SpaceX.

16:53Alissa Coram:Well, and yeah, so number one, you know, there's a lot of places where you could justify a buy, but make sure that you're also where is that exit strategy? You know, because as we saw here, I mean, this was this was almost like a SpaceX rocket in terms of look at how that goes up. And oh, look at that. You know, it landed itself nicely.

17:14Justin Nielsen:It did.

17:15Alissa Coram:It did land itself very nicely. And I absolutely agree with that. I think I think it did so in a beautiful way. But, you know, now it's now it's a question of how long is it going to take to refuel and launch again? Now, I will say that one of the I edited an option story today. Gavin McMaster, who does our options, he he threw out a SpaceX option today. And the reason is just straight call out of the money call at 170. And the reason was because the implied volatility had come down considerably from its highs. And he chose a period that was, you know, maybe taking advantage of some of the lockup shares still not being available.