Leaders Still Offering Large Gains; Vicor, Lumentum, GE Vernova In Focus

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0:40Justin Nielsen:Good afternoon, everyone, and welcome to Stock Market Today for Monday, May 11th. It's Alyssa Coram here. And stocks eking out gains in the market as we're still seeing that conflict ongoing in the Middle East, but leading growth stocks looking past that. We're still seeing significant gains from a lot of leading stocks out there. And joining me now to discuss the market action is my colleague, Justin Nielsen. Justin, what are we going to be chatting about today?

1:10Alissa Coram:Yeah, as you said, Allie, it's incredible for as much as the indexes were eking out gains, there were some double digit gainers all over the place. Scott Sinclair on IBD Live today mentioning how he was thinking, gosh, there's so many stocks I wish I owned. So we'll go over some potential second chances on a few stocks, including Vicor, which is a leaderboard stock, Lumentum. I do have a position in Lumentum myself and GE Vranova, which was coming to a moving average line. And I have a position in GE Vranova.

1:41Justin Nielsen:I have a position in Lumentum and GEV as well. We're required to disclose this. I almost also bought Vicor as well today. I love you what kind of market we're in, right?

1:50Alissa Coram:Yeah, yeah, exactly. Yeah. And again, it was something that you were talking about. You brought up on IBD Live this morning and, you know, we chatted about that. Yeah, it's there's so many stocks. FOMO is real. It is.

2:03Justin Nielsen:It is. So we're containing our enthusiasm and using good risk management rules. So we'll discuss that more shortly. But first, let's take a look at the major indexes. Here's the NASDAQ on the day, up one-tenth of a percent. Meanwhile, the S &P 500 up two-tenths of a percent on the day above another round number, 7 ,400. Meanwhile, the Dow up about two-tenths of a percent itself. And the Russell 2000 small cap index led the way with a gain of about three-tenths of a percent or so, closing off highs and not in new high territory. We're mainly concerned with, at least as of right now, with the action in the Nasdaq and the S &P 500.

2:48Justin Nielsen:Justin, what do you make of today's fractional gains? I mean, we had a huge week last week. So the fact that we were able to add to the gains amid ongoing Iran tensions, I mean, it seems like we've sort of left that in the rearview mirror, right? The market is full steam ahead for now. But should we be thinking about some sort of stalling or digestion here? And like you said, the indexes are doing one thing, but underneath the surface, still a lot of opportunities.

3:26Alissa Coram:Yeah. And well, and again, it's hard to say a lot of opportunities because the biggest problem right now is so many stocks are extended. So those opportunities are sometimes a little bit more follow up by opportunities, any pullbacks to moving average lines. And look, a lot of times we look at 21 day moving average line or 50 day moving average line pullbacks. Some of these stocks are not doing that. They are just, you know, they won't even pull back to the 10 day or eight EMA moving average line. So sometimes in order to get into some of these stocks, you have to kind of take those opportunities where you can.

3:59Alissa Coram:And again, for as much as the indexes were maybe a little unimpressive, there were at least on the growth 250, one of our market search screens that has a lot of growth stocks on it. I mean, there were 15 stocks that had gains of 10 percent plus. So, you know, we'll talk about, you know, two of them today, ViCore and Lumentum. But there was a whole host of stocks. So at least in my portfolio, it felt like a much better day than the indexes. And we could also say the same for FFTY, which is another one of our signature lists that is used by CapForce to create an ETF out of. That had a phenomenal 2.8 % gain today.

4:43Alissa Coram:So, again, a lot of strength out there. Now, where a lot of people start getting nervous, and I'm going to include myself in this camp, when you start doing so well, you're like, OK, is it getting too good? You don't want to be overly greedy. But at the same time, a lot of times these markets can go up much more than you think. So it's a balancing act of using offensive sell rules to maybe trim a little bit, but also keeping your participation in there to see how much you can get out of this incredible rally.

5:16Justin Nielsen:Exactly. So in terms of levels that we're watching, I mean, we had a downside reversal last week, but even that didn't lead to more weakness. So you would think at some point we are even just going to get a little bit of a pullback. I know Mike Webster, our senior market strategist, in a very powerful trend looks for at minimum, sometimes you get three days down or two and a half days down of weakness. We haven't even seen that yet. in this powerful move.

5:47Alissa Coram:And I was certainly expecting that at least a little bit last week. I was a little hesitant on Friday. But again, a lot of the stocks I took, I took a hard hit on Thursday, but a lot of those stocks were coming right back on Friday. And here I am back at highs today. So it's really tough when the market is so strong. Again, you would expect there to be a pullback, but you have to be very careful not to outthink yourself out of positions.

6:16Justin Nielsen:Right, because you could have done that the last, you know, month.

6:20Alissa Coram:Yeah, how many times, yeah, how many times would you say, oh, well, you know, we're due for a pullback. And with some of these stocks, the gains have been, again, absolutely incredible where you're getting, you know, 100 % gains in a month for some of these stocks or even less time or even greater returns. So, yeah, it's really been an incredible market. And so this is where one of the big things that Mike Webster says a lot of times is study history, know what these best performing stocks look like. So you can kind of recognize when they are doing the normal and natural thing, like what you and I talked about on Friday, or when they start acting a little abnormally, getting either abnormally extended or the moves down, the pullbacks start looking a a little bit too steep, a little bit out of character.

7:10Justin Nielsen:Mm-hmm. Harvard Business School Executive Education creates powerful connections for leaders from around the world. Their programs strengthen organizations and individuals by deepening relationships and fostering new ones. Participants leave with lifelong friends, new potential business partners, and a powerful, globe-spanning network of fellow changemakers. Learn more at hbs.me slash breakthrough. That's hbs.me slash breakthrough. Well said. Okay, let's quickly take a look at the S &P 500 before we move on. A similar fantastic move here. Well above the 10-day moving average, the 21-day moving average that we use.

7:56Justin Nielsen:And we are in a power trend. So as a reminder that this is the type of environment where we want our winners to run instead of proactively taking more profits like we would in a weaker environment, right? That's not to say that you're not doing any offensive selling, but to try to hold at least part of your position for a bigger move as long as stocks are, like you said, the normal and natural action, respecting key moving averages, that kind of thing. So we still have a lot of room right now between the current action for the S &P and the Nasdaq and this 21-day line, which speaks to the power of the power trend, that initial burst up.

8:43Justin Nielsen:Another thing that Mike Webster has spoken in depth about. So we'll have to see if, when, ultimately, that first test of the 21-day line is like, what shakes out in that type of situation. But for now, we're well above those levels. Yeah.

9:04Alissa Coram:And you know what, let's go ahead and go to a monthly chart of the S &P 500, if you don't mind, just to, again, kind of get that overall sense, you know, and just this is something that Bill O 'Neill, the founder of Investors Business Daily, and I chatted about, gosh, over 10 years ago. you know he he wanted me to create some charts about the super cycle and we were actually using yearly charts going back over a hundred years and you know the idea that you have these incredible moves so like for for instance from 1982 to 2000 you know it was like a 17 year move that you had and then you go sideways for a long period of time and it wasn't really until 2013 2012 2013 when we were having this discussion, Bill and I, that we were coming out of that.

9:54Alissa Coram:And he said, okay, so here's the expectation. You would expect to have, you know, 15 to 20 years of this next up cycle. And, you know, that would put us a few years out. And the important thing here, too, is the way these cycles tend to end. And by the way, I should say the years here, very flexible, Right. And, you know, you don't want to say, oh, well, you know, I'm looking for exactly on year 15 for it to, you know, do exactly this. But the sense and the the end of these rallies can a lot of times go again, very parabolic. So this this does still seem a little bit early for that super cycle idea.

10:38Alissa Coram:and again that's that's why I think a lot of us as much as we're enjoying the gains and a little hesitant to push our luck there is again this precedent for the move to go further now that's not to say that we aren't going to have some hard hits along the way and even if you look at the chart here look you know April of 2025 March you know 2025 that was no fun but you can see how quickly we recovered from that. Even as part of this, you know, overall super cycle, you know, there was the COVID, you know, crash. There was a 2022 bear market. So you can have bear markets in the middle of this super cycle that can be very punishing, no fun at all.

11:23Alissa Coram:You can see leaders like NVIDIA that were down, you know, over 65 percent in that 2022 thing. So it's not to say that you don't have damage done during the super cycle, but it's something to also keep in mind in the same way that we keep the power trend in mind for kind of leaning a little bit more bullish, I'm kind of leaning a little bit more bullish because of that super cycle potential.

11:44Justin Nielsen:I like that. Thanks, Justin. A little bit of a different flavor for an SMT today going to the monthly chart. Okay, let's also check in on RSP. This is the equal weight S &P 500 ETF bumping up against a key level in recent days. What do you think?

12:04Alissa Coram:Yeah, so that's something to absolutely keep in mind. And at least today, it wasn't the MAG-7 necessarily, you know, giving a lot of power because MAGS, which is the Round Hill Magnificent Seven, that was also down for the day about a quarter percent. So, I mean, it doesn't look bad, you know, by any stretch of the imagination. But again, this wasn't necessarily where a lot of the power was coming from today. And again, the indexes didn't even show that underlying power that we saw in a lot of different areas. So, yeah, that's something to keep in mind. And then we should also take a look at IWM, which is the Russell 2000.

12:42Alissa Coram:That, you know, well off its highs was was up, you know, I think almost a full percent earlier in the session, but did did come off highs considerably. And that hasn't reached new highs quite yet, but it's still, you know, right on the cusp as well. So there is still that participation in the small caps, still, again, right on the cusp of new highs. But it had a little bit of an uglier day last Thursday when a lot of stocks got hit.

13:10Justin Nielsen:Yeah. Let's take a look at some notable sectors and themes, starting with chips continuing this relentless advance here, Justin. outpacing the major indexes in a big way yet again today, up 1.7 percent.

13:28Alissa Coram:Yeah. So again, this is where the strength is. This is what's leading. As we were going over our industry group spreadsheet this morning on IBD Live, a lot of the top areas include the semiconductor fabless, the semiconductor equipment, the semiconductor manufacturing, you know, those kept on coming up on a lot of our different screens and lists. This is where a lot of the strength is. And this is where you're getting a lot of those double-digit gains, you know, at least. Some very phenomenal moves. And look, not everything was even participating with SMH today. TSM, Taiwan Semiconductor, which I do have a position there, that was down one and three quarters.

14:06Alissa Coram:And that's a very large weighting in the SMH VanEck Semiconductor ETF. So still, there was enough stocks doing very well, including the behemoth NVIDIA. I do have a position there as well. NVIDIA, a very large position in SMH, and that was up 2%.

14:23Justin Nielsen:Mm-hmm. And back in new high territory. All right. Let's now go to silver. This is another area that we were pointing out on IBD Live this morning. The SLV ETF up almost 7 % today. It's a

14:42Alissa Coram:Oh, I missed that discussion, dropping my kid off to camp. But yeah, this is something that you see the downtrend here and the move above that downtrend. And if you're looking for areas that have been out of favor and may be coming into favor, this is an area that is very striking in the move that it had today and the setup that it had prior to that. So definitely something I think that is worth watching. Mm-hmm.

15:11Justin Nielsen:Interesting to see this making a comeback. We saw that ugly, sharp sell-off after this started going parabolic and pretty vertical. And what we know, studying a lot of charts over time, is that it can take time for something like this to put in that repair work and to make a comeback, which is why we weren't gung-ho about that first bounce off of the 50-day, maybe for, you know, a little bit of a break. short-term trade or something. But now it seems like some time has passed. This is rounding out the right side, starting to right itself a little bit more after that big volatility.

15:57Alissa Coram:Yeah. And another thing I can share that Bill O 'Neill, the founder of Investors Business Daily, kind of had as a rule, is when he saw something going into climactic type action, And sometimes he wouldn't even want it to be on his screens for at least six months. We had what was called internally the blacklist. You know, basically when something had gone that much, he knew that it usually took time in order to digest that. And, you know, six months at a minimum was usually where it was on a blacklist after having a climax.

16:29Justin Nielsen:Yeah. All right. Well, we still have a few months to go in that case. OK, let's go to UFO. I assume Rocket Lab has a pretty nice weighting in this one, Justin.

16:43Alissa Coram:Yeah. And look, it's not alone in that regard. I mean, you have LUNR, ASTS. There are so many stocks in the space area that have been looking very interesting. So, yeah, there's a lot of stocks in here. OutPlanet Labs, got to give that a shout out. And then you got like BSAT, you know, in the satellite space. So there are a lot of stocks in this group. And, you know, you could go with UFO. You could go with NASA. That's a newer space ETF as well. You know, so there's a lot of strength here. And so this is just a space, literally, that you want to be watching.

17:20Justin Nielsen:Yeah, the space space. Yes. And we don't even have the SpaceX IPO yet. Yeah. Right? Yeah. So that'll be in there too, added to the mix whenever that launches. Yeah. Okay, two quick other ones we want to take a look at. Here's XLE up 2.6 % on the day. I mean, you had the price of oil up again. And so here's a look at USO up 3.8%. So probably had something to do with that, Justin, the shrinking energy today.

17:57Alissa Coram:Well, it's certainly the, yeah, the oil, the move in oil is normally something that was kind of a fear for the market, right? And something that would act as a big headwind. We're seeing a lot of these stocks just kind of ignore it and go up anyway. And that's, again, kind of an important thing to say in terms of the whole conflict in Iran, how if you had just said, oh, look, these headlines are too scary. I don't want any part of the market with that extra risk. there was a lot of the technical action that was telling us something different. And look, I'm right there with everyone. If I had gone with just my emotions and what I thought, we'd be having a very different discussion now.

18:36Alissa Coram:But the chart was telling me to do something different to fight those emotions. And at the end of the day, I tend to listen to the charts and the technical action that they're showing me. So regardless. We've seen just too many examples. Yes, exactly. Too many examples of that disconnect. Yeah. And I mean, look, the same thing happened in COVID. If I had listened to my intuition and my emotions on what I thought should happen, I would have missed one of the most powerful rallies of my career. So, you know, I think it's worth mentioning. I think it's worth watching. But at the end of the day, you're going to be looking at what are the stocks doing.

19:11Alissa Coram:And I also just want to mention real quickly on the on the weak side, XRT, this was something that really got hammered. I'm not sure why. I'm not sure what the news is, but I do pay attention when XRT takes a hit like that. So it was a decent looking setup. And today was a big failure. So something I'm going to be looking into after we're done here, Allie.

19:34Justin Nielsen:Yeah. Money definitely flowing out of retail. And we have a general sense of where the money is flowing to,

19:42Alissa Coram:at least as of now.

19:45Justin Nielsen:So speaking of, let's segue to the first stock that we want to highlight, and that is Vicor. It's in the electronic parts group. Shares were up 22 % today, Justin. Just an incredible move. Really strong earnings growth here. A couple of quarters of accelerating triple-digit growth in the most recent quarter as well. Top-line growth up 20%. And this was something that I spotted along with, I'm sure, others, but in the growth to 50 this morning, As I was hosting IBD Live and in the background, the team was looking for a stock of the day because Ed is out. So he said, you know, basically, you guys are going to have to have to pick it.