Leaders Punished Again As Oil Rises; Valero, Noble, TechnicFMC In Focus

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0:40Well, good afternoon, everyone. Welcome to Stock Market Today. It is Wednesday, May 18th. My name is Ken Shreve, and today I am joined by my colleague, Justin Nielsen. He is our director of market research. A little bit of a different lineup today, but on today's show, we're going to talk about another interesting day for the market. Not a great day for growth stocks, a nice day for energy stocks. Before we get into all of that, let me bring in our director of market research, Justin Nielsen, who has got three stocks to watch for us today. Good afternoon, Justin. Yay. How you doing, Ken? And yeah, so since it was a day of oil, we might as well just kind of focus on what was working today.

1:29You know, tough to tough to play these, you know, with the news and everything that, you know, can toss these around. But the setups were looking pretty decent. So we'll cover Valero, ticker symbol VLO. That's Valero Energy. I will also take a look at Noble Corp, which is N.E. And then we'll finish it up with a leaderboard stock, FTI. That's Technip FMC. Technip FMC, a bit of a mouthful, but yes, we do know that leaderboard stock very well. Before we talk about some individual stock action, let's take a look at the major stock indexes like we always do and start by taking a look at the NASDAQ composite.

2:09That's where we had a little bit of laggard performance in the market today. But, you know, NASDAQ was down a half a percent today. But as you can see, really just kind of held right at that 26 ,000 level, just kind of testing the 10-day moving average. We had a little bit of outperformance from the Dow Jones Industrial Average today. That actually outperformed. It was up three-tenths of a percent, still looking technically pretty strong here, holding above the 21-day moving average. The SPX, S &P 500, that really didn't move much at all just because oil and gas stocks were performing so well.

2:55That's testing the 10-day moving average. That was down just a fraction, less than one-tenth of 1%. And then let's take a look at the Russell 2000 here. And that, again, that's a little bit below the 21-day moving average. That one's been hit a little more than the other indexes here. So, Justin, let's take a look at that, Russell, the NASDAQ composite. And down a half a percent today, but, boy, those growth stocks really got hit hard today, seeing some profit taking. But when you look at the NASDAQ, just a test of the 10-day moving average here doesn't look too bad on an index level. But there was some definitely some pain below the surface today.

3:40Yeah, absolutely. I mean, it's again, we've had such a strong run. It's very normal for the indexes to come in a little bit. But that doesn't make it any less painful. Some of these leaders have been up so much. And, you know, you think you've got a good cushion. You know, you're looking at 30 percent, 40 percent gains. you know, think that's enough to weather the storm. But, you know, a couple of days where you're down, you know, double digit percentage losses and, you know, that cushion starts getting, you know, really kind of taken away from you. And look, it's one of those where, again, the leaders were really where the destruction was.

4:15A lot of these AI related areas. But, you know, very interesting how, as you mentioned, the S &P 500, not down as much in RSP, which is the equal weighted S &P 500 was up, you know, six, a healthy amount, six tenths of a percent. So that was a little impressive. So certainly not one of those things where the the the bleeding was everywhere. It was, again, a lot more targeted. Yeah, RSP, pretty amazing, up six tenths of a percent. And when you look at the actual advances versus decliners on the NYSE today. It was actually three to two positive. And I think that that was mostly oil and gas because there was a whole slew of oil and gas stocks that were higher today.

5:08And we've got a nice trio that we'll go over in just a little bit. And actually, You know, breath on the NASDAQ as well, even though we were lower on the NASDAQ composite. Like I said, we were down a half a percent, but the Qs today, they were down as well. Take a look at the NASDAQ 100. Qs were down a half a percent, but take a look at QQQE, which is the equal weighted. That was down, I think, mostly in line with the NASDAQ 100. Let's see, QQQE. That was actually, yeah, that was up two-tenths of a percent. So not too bad breath as well on the NASDAQ 100 today as well. Well, you know, it's worth doing a little compare and contrast here because SMH, the chip stocks, SMH is the VanEck semiconductor ETF.

6:07I do have a position in that still. that's really been kind of where a lot of strength has been. You can see that from the bottom here, this has been a stunning move, you know, for the chip space. Meanwhile, IGV, which is the software area, that was lagging for quite a bit and really getting some hard hits as Anthropic and all of these different threats to the software space, you know, basically like, hey, if your subscription as a service, we might be taking your lunch here pretty soon. But now it's kind of flipped, right? A little bit more recently, IGV and the software have been doing much better.

6:46In fact, cyber CIBR, the computer software security area was an area of strength today. So even in the tech space, it's been a little bifurcated, right? Where it's just kind of taking turns, you know, the chips and AI have had their turn. And now it's kind of going back to some of these software areas. And it wasn't just the computer software security. I mean, there are a number of areas that I was seeing in the computer software enterprise and so on that were kind of coming up on some of my screens today. So very interesting in that regard. Again, you know, in addition to the oil and gas, you also had, you know, some of your staples and some of the areas that have been out of favor.

7:32So could there be a rotation? Maybe. What we've seen, it seems like more recently, is those rotations have been very short-lived. Basically, it's like one or two days where you'll see a rotation into an unfavored area, and then it goes right back to AI. So it remains to be seen if this is another one of those short-term rotations, you know, and then it's going to be back to AI or not. Well, you mentioned the Dow outperformed today, up three-tenths of a percent, and your best gainer in the Dow, not surprising, your big software giant, Salesforce, CRM, which is trying to make a case for a bottom just like that IGV.

8:16It's still near lows here, but trying to pop above its 50-day moving average, 3M, another big gainer in the Dow as well. Triple M is the symbol here. So getting some outperformance from blue chips as well. And then did get some outperformance from the energy stocks today, USO. That was a nice gainer today. But nonetheless, you know, this President Trump's trip to China is all over. So now, Justin, it does seem like this attention is going to turn back to oil prices and Iran. It looks like there was an attack that was going to be scheduled for Iran tomorrow. It looks like the UAE and some of these countries urged President Trump to stop or to postpone that attack.

9:16And that looks like it's going to happen. But I'm not sure these volatile headlines out of Iran are going to be helping the market anytime soon. But we'll have to see. But these oil prices, bond yields, this is going to be tough for the market to navigate, I think. Yeah. And it's worth mentioning that, you know, again, President Donald Trump did post something on Truth Social about an hour away from the close in which he did mention exactly as you said there, Ken, that, you know, leaders from Qatar, Saudi Arabia and the UAE had, you know, kind of discussed postponing, you know, putting off any type of attack against Iran to, again, try and get these deals done.

10:03So that did see a little bit of a move. The NASDAQ composite was down 1.36%. And so closing down just half a percent was, you know, a little bit of a win. As you said, more importantly to me was that kind of support at that 26 ,000 level that you mentioned and the 10-day moving average line. So now it's just a matter of seeing, hey, can that hold? Yeah, yeah. Well, so far, so far, so good. Not far off highs here, holding at the 26 ,000 level. Yeah, we might see a distribution day for the NASDAQ today. Right now, the distribution day count on the big picture does not have any distribution days at all for the NASDAQ.

10:47We could end up, it looks like we'll probably add one for the NASDAQ today. And for the S &P 500, that percentage decline for the S &P 500 is not going to be enough to qualify for one. It doesn't look like that percentage decline is going to be a little too light. All right. 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 smallbusiness. Any more ETFs that we want to go over here? Are we ready to get into some?

11:30Let's look at some stocks. Let's look into some oil and gas stocks. First one is going to be an oil refiner. So let's take a look at Valero. VLO is the symbol here. VLO is the Valero Energy. And this is an oil refiner. So take a look at VLO. And this looks like a pretty good looking cup with handle base here, Justin. Yeah, kind of your classic look. You've got some really strong earnings growth lately, you know, coming off of not even particularly small numbers. I mean, you know, this last quarter was, you know,$4.22 versus$0.89. So it's not like this is coming off of a penny or two. That's some solid earnings growth.

12:17Revenue growth is a little bit weaker. But again, this is one of those things where, you know, with the price of oil, you expect, you know, some of these oil stocks to come out. And, you know, they're cyclical and they have all these parts to them that do make them a little bit tougher to go in terms of a growth type of strategy. But the technical action is kind of what's looking interesting here. Now, while this is a pretty good looking cup with Handel, you have to remember that the relative strength line here, how it's been performing versus the S &P 500. Well, you know, the S &P 500 has been rocking since that follow through day and Valero has been basing.

12:57So that's why the weak relative strength. But again, that will happen in a situation where you see rotation. And it's not like the oil stocks haven't been, you know, participating at all here. A lot of these have been looking a lot better, getting above their 200-day moving average lines, 50-day moving average lines, and holding very well. Valero, pretty impressive that this has been just kind of trending nicely above its 50-day moving average line. So today, just your classic breakout. And so certainly not necessarily one of those things where, you know, I'm suggesting everyone pile in strongly to oil.

13:36You know, they can be volatile. But yeah, this is a pretty good look. And so if you take a venture into the space, you've got a lot of different areas to choose from. This is a refiner. We're also going to look at machinery, you know, equipment space in the oil and gas. But, you know, drillers, explorers and producers, field services, and the shippers. You know, if you're shipping oil and gas, that's also, you know, a lot of setups there. So we're just going to kind of give a little buffet here on different areas. A little buffet of energy and definitely about the refiners here, Justin. This industry group is quite strong here, that industry group 14 out of 145.

14:26So pretty broad-based strength in that refining group. And really, you mentioned a lot of different subgroups in this oil and gas space. A lot of subgroups acting well in the oil and gas sector, no doubt about it. All right. How about we go into the drilling? We can go ahead and, yeah, I was just going to say to that point, you know, the drillers are actually the number two group right now in terms of that six-month performance, you know, which is, again, a little surprising. but you know we do kind of wait you know more recent activity a little bit heavier so this has jumped quite a bit in terms of its you know performance lately so yeah the drillers up there and noble ticker symbol NE again this is not going to have the fundamentals behind it you know those are severely lacking here it doesn't even have anywhere near the growth that we saw from Valero But, you know, you do have, again, a very strong group here, a lot of a lot of stocks setting up.

15:29And this is continuing to get that support at the 50 day moving average line. You know, you've got to keep in mind why, you know, it might seem weird that this is a got such strong group performance, you know, being at number two. But let's think about it. I mean, if you look at the move from January, this has really been moving since then. And part of this has to do with not just what was happening in Iran here, but you got to remember back in January, that was when the Venezuela Maduro was was taken and brought to the U.S. for for trial. So this has kind of been a move that's started then. And that's why that six month performance is is so great here.

16:12whereas a lot of stocks were still going sideways and suffering a downtrend in March. This has been, again, getting that support at the 50-day moving average line. So another bounce here at the 50-day moving average line and a move, you know, it looks like right there knocking on the all-time highs. Yeah, looking very, very strong. And, yeah, you look at the forward estimates here. Again, the revenue growth, not here, but earnings definitely expected to pick up. And then, you know, you look at the annual earnings growth here for 2026 and 2027, really expected to pick up. But again, fundamentals in the oil and gas patch, they're not going to look like they do in a typical, you know, tech growth stock.

16:58You're going to have bumpiness, very, very cyclical. So even though Noble is regarded as an institutional quality name in the drilling group, again, the top line growth, you're going to see declining revenue. But you can see that the price performance definitely very, very strong in this industry group. Two tests of the 50-day moving average, so broad-based leadership in this group as well. And then that's Noble Corporation. And then FTI is a name that we know well on leaderboard Technip FMC. This is a company that was formed between the merger. FMC used to be a company they merged with Technip, which I believe was a French company.

17:47But this was put on leaderboard quite a long time ago, actually. It was, well, in January, January 2nd, 2026, we added this to leaderboard. It's been on there ever since, been trending nicely and actually do have pretty good fundamentals at FTI here. Yeah, you can see this has an EPS rating of 97. And yeah, the numbers here are actually pretty impressive. So, you know, the last reported quarter up 94%, 30 % before that and 17 % the quarter before that in terms of earnings growth. So you're seeing acceleration there. Revenue growth there, you know, a little maybe lackluster, but 12 percent, nothing to sneeze at.

18:35But more importantly, let's go to the weekly chart because TechNip FMC, you know, even when oil stocks weren't doing so well, this one just looked very different. This has been trending very nicely for a while. Actually, let's go ahead and take another step back and go to the monthly chart, if you don't mind, because this has been, you know, this hasn't looked like an oil stock. This has really looked like kind of a very powerful move here. So, yeah, it's a good one that had relative strength very early on. You can see that even before January, this was something that was coming out on the relative strength line.

19:16And, again, had a very, very positive look to it in terms of the technical action, that support at the 50-day moving average line, 10-week moving average line. all good things. So this is, ideally, I think we'd be seeing a base here. This hasn't even based while a lot of these other oil and gas stocks are based. I think, you know, because we've had a number of touches against that 10-week moving average line, a base would be pretty good here, but definitely one to keep an eye on because of, again, that strength. And I know one of the things we were talking about today for leaderboard was, okay, where's, you know, where's a chance to add to this position, you know, and bring it back up.

19:56yeah yeah this is uh this is funny this is a stock that uh you know how to break out all the way back here is towards the end of last year came down and and touched the uh the 10-week moving average right here but it really has been a stock that has trended uh so so well and it has uh it's just been a a quarter position so we'll see if it we'll see if it can base uh base up here but it's just been such a tremendous performer, but the fundamentals are really the story here. Remember talking about choppy growth a lot in the oil and gas sector, but with Technip, you can see it's just been nothing but growth quarter after quarter here.

20:37Well, Justin, it's a pretty quiet week of earnings, but we are looking forward to NVIDIA later in the week. NVIDIA is going to be coming out with earnings on Wednesday. This is going to be a big one for the market. This is a leaderboard stock and NVIDIA is fighting a good fight and holding up well. So we're going to listen to what NVIDIA has to say on Wednesday. This is a stock, it was down modestly today, 1.3%, just holding support at the 10-day moving average. And another leaderboard stock we're going to be watching for earnings this week, analog devices, they report the same day as NVIDIA. And this one has trended pretty well, just kind of holding support at the 10-day moving average.

21:26So quiet, quiet week of earnings, but we do have two chip stocks reporting this week on Wednesday. So we'll see what these two companies have to say. Outside of that, we've got Walmart later in the week and Some retailers set to report this week, but Walmart's going to be a big one later in the week. This one is still showing a lot of relative strength. We'll hear from Walmart later in the week on Thursday, I think that is. And then, you know, a name that we don't talk about that much, but Zoom Communications, showing some technical strength here. had a nice breakout for Zoom from a cup with handle base coming down, testing that 21-day line.

22:11They also report later this week on Thursday. Yeah. Again, a lot of the computer software enterprise coming back. Also worth mentioning, we're probably going to be calling it quits here because Trade the Power Trend, a webinar that's featuring Ali Coram and Ed Carson. They're going to talk about using the power trend to trade. and that's going to be a great webinar. So folks, if you haven't registered there already, investors.com slash webinar is a place to find it. That is coming right up. All right, Justin, well, appreciate your insight as always. Good to be with you on this Monday. Thanks a lot.

22:54All right. That's going to do it for today. And don't forget to join us tomorrow, folks, for IBD Live. Tuesday is a big day. We always welcome David Ryan. He's our three-time U.S. investing champion. We are lucky to have him on the show every Tuesday. So you can check out investors.com slash IBD Live. So be sure to join us. Tuesday is always a great show. So hope to see you there. But that's going to do it for today. I will be back here tomorrow. I believe Allie will be back. She's going to be doing that webinar with Ed Carson coming up right now. I think it's starting right now, 1.30 Pacific time, 4.30 Eastern.

23:40So that'll do it for today. Thanks so much for watching. We'll see you back here tomorrow. Take care. Bye-bye.

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