Market Resilience Continues With Indexes At Highs; GE, Five Below, Shopify In Focus

0:00Justin Nielsen:Over 60 years, Medline has demonstrated a track record of delivering consistent growth. Today, Medline is proudly NASDAQ-listed and is the largest provider of medical surgical products and supply chain solutions serving all points of care. See how Medline makes healthcare run better at Medline.com.

0:25Justin Nielsen:Good afternoon, everyone, and welcome to Stock Market Today for Monday, July 14. It's Alyssa Coram here. And the major indexes are continuing to show that resilience with markets still near those all-time highs amid more tariff headlines out there. And joining me now to discuss more about today's market action is my colleague, Justin Nielsen. Justin, what do you have for us today?

0:49Alissa Coram:Yeah, we'll talk about a few stocks. I mean, we can revisit some of the stocks we were talking about last week because they've been rocking. But also let's add a few to the radar, including GE, Five Below, and Shopify.

1:02Justin Nielsen:Sounds like a plan. We'll do that. But first, let's take a closer look at the major indexes starting the week out in the green. So here's a look at the Nasdaq composite, up three-tenths of a percent on the day. Stronger yet was the Russell 2000 with a gain of about a half a percent headed into the final stretch of the day, the S &P 500. Let's actually go to the Dow first because I was typing that. Up two tenths of a percent on the day and the S &P 500 up a little more than one tenth of a percent. So hovering near highs. And Justin, it clearly seems like we've continued to see more evidence of this shift in tone of the market's reaction whenever we get those new tariff related headlines.

1:44Alissa Coram:Yeah, it really is a market that is if there's a one word, resilience is it. You nailed it there, Allie. We just keep on seeing the market really shrug off a lot of headlines that in a different market could really damage the look of these indexes. But yet here we are, all of those indexes that you just showed, that you just went through, they all closed in the upper part of their ranges. They have been closing mostly in the upper part of their ranges. I mean, I'm looking at the closing ranges today and it was, you know, 82, 86, 95, 94, you know, you know, really not just at the upper part of the range, but really kind of near the peak.

2:25Alissa Coram:And that's again, we're very close to high all time high territory. This index has the Nasdaq has taken a little bit of a break, but it's been very tight action. I mean, look at how these closes, how many closes have been right around this area, around 20 ,640. And we've held the 10 day moving average line. You know, we're not even crossing that line. So, again, a very resilient market. And it's not like there's, you know, all of the stocks are gone and there's nothing to buy. There are still some of these stocks that are setting up and giving new opportunities, sometimes not your traditional buy points.

3:02Alissa Coram:Sometimes it's a little bit shorter, little shelves and pullbacks that we're looking at. But there are still some stocks that are coming out of regular old cup with handles.

3:13Justin Nielsen:Absolutely. And a couple of those interesting movers we will be taking a look at shortly. But let's also take a look at a couple of interesting themes out there. So starting with nuclear and uranium, here's the NLR ETF, which we covered on IBD Live this morning. And really, we started covering back in May with that explosive move on some headlines. And what do you know? We saw some strength, waited for the pullback, and investors who were patient waited for that rebound off of the 21-day line. Well, that paid off today with NLR up over 3%. Yeah.

3:54Alissa Coram:So this is one that we also covered on Friday as it was, you know, kind of crossing that upper trend line. Our downtrend line, I do have a position in this and, you know, also shared that a lot of the nuclear are looking good. CCJ, which I have a position in, SMR, CEG that we covered on Friday. So a lot of these just following up on their strong moves from Friday with even stronger moves today. And that's what we're seeing kind of in a lot of different areas. Ibit was another thing that we talked about on Friday. That was looking very strong last week. And Thursday, Friday, you know, just continued to well, actually, Wednesday is when it started.

4:34Alissa Coram:But then it really started picking up the pace. It didn't really close that well, but it's still a one and a half percent gain is a one and a half percent gain. So I'm not going to be too too upset about that. And I do have a position in Ibit myself. Crypto week is coming here. A lot of a lot of interest in the ETFs. So that could be fueling a little bit more of the gains in Bitcoin. But this is probably extended at this point. But there were plenty of opportunities to get this last week.

5:05Justin Nielsen:There sure were. And I own Ibit as well as of that April 22nd follow through day. But like you said, we talked about the reversal off of the 50 day line and even some spots in there where you could have taken advantage before the outright strength that we saw in the back half of last week. And as you mentioned, crypto week unfolding on Capitol Hill. So momentum definitely underway here for that crypto theme continuing higher to kick off the week. So we'll have to see if any new legislation or other headlines in the crypto space unfold throughout the week and how that could impact the crypto space.

5:47Justin Nielsen:And Bitcoin isn't alone. Ethereum, too, seeing some momentum, not today closing in the green, but in recent days as well. We are also hearing a lot about stable coins and there's interest there from the regulatory side as well. So we'll continue to watch it, Justin.

6:07Alissa Coram:Absolutely. It's a very interesting area. Of course, we usually defer to Jim Ropel, especially when he does his monthly show with you, because he is definitely much more knowledgeable on the cryptocurrency and blockchain.

6:22Justin Nielsen:He knows all the details for the bull case for crypto. And this was one that we covered last Monday as it was setting up before the breakout. Let's also go to FNGS representing our mega caps. Justin, what are you seeing here?

6:38Alissa Coram:Well, so this is, you know, of course, when we see the markets at all time highs or near there, it's always kind of a good idea to kind of do a little bit of compare and contrast, looking at FNGS and RSP to kind of see, OK, is this really kind of just the big mega caps that are doing this? And you look at these two charts and they both look very similar. Now, we did have that disappointing action on Friday after such a strong showing by RSP, kind of into new, you know, recent high territory covering resistance, not at all time highs, but still a very strong showing on Thursday. Disappointing Friday, but it's still holding in there.

7:18Alissa Coram:10 day moving average line. It's right there, not even coming down to the 21 day moving average line. very tight action over the last couple of weeks. And so this is not just your FANG stocks, your trillion dollar club, your mega caps. Although they are doing great, it's also kind of spread out to a lot of different areas.

7:38Justin Nielsen:Right. Okay. Well, let's talk about some individual names. Here's a look at GE.

7:44Alissa Coram:This podcast is brought to you by Federated Hermes. We put our investments through a ruthless vetting process because we don't like surprises and neither do our clients. Learn more at federatedhermes.com slash US. Investments are subject to risk and may lose value.

7:59Justin Nielsen:The aerospace. And as a reminder, we've been talking about how the aerospace defense theme was one of the first to new highs, Justin, after the market bottomed and turned in April, including a breakout from GE in early May. It's had a couple of pullbacks and now back to high territory, crossing some recent highs around that high 250s, 260 area with some gusto today, one might argue, up 2.7 percent. Not a bad move for GE.

8:34Alissa Coram:Yeah, and I do have a position in this. It's a small one. But look, ITA, which is another ETF that we talked about. This is the aerospace defense. I mean, this has just been rocking. Of course, last week we had KTOS and a lot of the drone makers that were doing very well. But there have just been, you know, time after time, different stocks in this group that have been doing well. And GE, what I like about it is it's kind of got up to this 20 percent profit zone very quickly. It achieved that in the end of May, June, and it just really kind of held those gains. didn't really come far down below the 21 day moving average line, didn't even touch the 50 day moving average line.

9:20Alissa Coram:And here we are. It had one more kind of shakeout, but you notice that it didn't even come down nearly as much as it had before. So it just got tighter and tighter. And that's a good recipe for some really strong action. Another ETF in this space to kind of put on people's radar. This is one that we were talking about with David Ryan and a kind of an internal meeting that we had. It's the Stocks Europe aero. This is E-U-A-D. So that's Echo Umbrella Alpha Delta. So this is on the European side. Another one, just again, no matter how you slice it, this has been one of those groups that's been very strong.

10:00Alissa Coram:And so remember, it wasn't that long ago that GE did its breakup into the healthcare, the energy and the aerospace. And And really, that seemed to have unlocked a lot of potential for each of those categories with GEV doing very well and GE Aerospace also having a great time.

10:21Justin Nielsen:Well, there's one caveat perhaps here, Justin, and that is it looks like we have earnings from GE this week. So how should investors be handling the action here in light of that and in general for earnings season?

10:38Alissa Coram:Yeah, this is something that we talked a little bit about on IBD Live this morning. Certainly one of the things you can lean on is the options market to give you kind of a sense of that expected range by using either the cheat that you used, the market maker move on your thinkorswim platform, or you could just take a look at the options of the at -the-money strikes for the call and the put, add those together. It gives you a sense of what the market makers are saying is the expected move for this stock on earnings. It doesn't tell you direction, but it just gives you a range in which this might move.

11:12Alissa Coram:And it's also a good idea to kind of look at history. If you look at the history of the last few earnings reports on GE, you can see some very strong moves, the last two, but the one before that was a little bit rough. So it just kind of gives you a sense of what typically happens. Certainly one of the things that once the earnings season kind of kicks into gear, you You get kind of a sense of, oh, is this a forgiving environment or is it one that is a little bit more?

11:43Justin Nielsen:Blame on the gold mines is what we said before.

11:46Alissa Coram:So, yeah, it's too early for GE. I mean, because it's early in the phase of the earnings announcements, you don't really get that sense. It's going to be the banks, GE and a number of others first. but that's something that you can use for the future because there are gonna be a lot of earnings in the next few weeks.

12:06Justin Nielsen:There sure are. Okay, moving on, let's check out ticker FIVE. This is five below in the retail discount variety group. And Justin, this is ranked number 10 out of the 197 groups that we track. Five below a turnaround stock here that has tightened up 3.8 % today. Yeah.

12:29Alissa Coram:So if we take a look at the weekly chart here, you can see that, look, this is nowhere near highs. There's still a lot of overhead supply here. But look at how this has come up so strongly off the bottom and it just tightened up. It's just letting that 10 week moving average line really catch up to it as it just kind of marks time here in a very tight base, just a depth of 12%. So well within that category of flat base action. So that's something that's positive. Look, the earnings have been a little bit spotty. You can see that the earnings line has been a little wavery and you can see some some growth there that's been a little spotty.

13:06Alissa Coram:But the revenue has been pretty, pretty on board with double digit for the most part, a few single digit in there. And again, this does have that turnaround look. It's a reminder that when Bill O 'Neill, the founder of Investors Business Daily, was doing his model books, he often had to remind folks that about 25 percent of the model book stocks were actually turnaround companies. And so this is especially important in times where you might see some sector rotation. Sometimes those stocks that maybe haven't quite participated start really coming on strong. And even though this hasn't been the biggest participant lately, you can see it did have a strong move off of the bottom, and that was enough to give it an RS blue dot.

13:52Alissa Coram:So that's something that's pretty spectacular, that this has so much overhead supply but still has that RS blue dot, which kind of puts it in a category of itself where, hey, the relative strength has been so strong on this lately, and it's in a base. these are often ones that are well worth your attention.

14:11Justin Nielsen:Yes. Well said, Justin. And I would have to say that the most recent quarter, you know, you're talking about this being a turnaround, even though the track record a little spotty, the most recent quarter, very promising with earnings growth of 43 % and revenue growth of 20%. We'll have to see how that translates to the rest of the calendar year, perhaps in upcoming reports, the next one is coming out in about a month and a half. So we, you know, retailers are usually towards the end of earnings season by and large. So we do have a little bit of time here for this one. And then in terms of risk management on the trade, Justin, with this outside day upside reversal right at the 21 day line, seems like a pretty good spot to manage risk as a trader.

14:58Alissa Coram:Absolutely. Whenever you get a kind of opportunity like that, where if it crosses below today's low, the 21-day moving average line, it just kind of has a different look. It doesn't necessarily mean that this stock is dead and won't come back, but it certainly means that the action today that looks so strong is maybe under fire. And so that's a very easy way to just really be able to cut your losses. And while we often talk about our 7%, 8 % sell rule, it's a reminder that that is the maximum that we ever want to lose on a position. There are often times where you can see something is not right with a stock much earlier.

15:37Alissa Coram:And so for this one, if this is down 4 % from where it is and crosses below that 21-day moving average line, it can be a very early sign, hey, this is maybe not the time for this one to work, and you can just exit without getting hurt.

15:51Justin Nielsen:No doubt. All right. Well, from discount retailers to e-commerce, let's go to Shopify. Full disclosure, I do have a position here. The stock up 4.1 % today. Did close off highs a little bit, Justin, but we're continuing to see support at the 21-day line for this stock as well.

16:10Alissa Coram:Yeah, and this one has not been easy. So kudos to you for holding on. It's not been the smooth sailing that we've seen from a lot of other stocks. But, you know, to its credit, it has held above that 21 day moving average line. Some of the things that have made it difficult is last week we saw a downside reversal on Tuesday, some some kind of ugly action on Friday. So there have been a number of times where it just seems like it's about to start getting going. And then it kind of pauses a little bit, but it's holding up well. And this is certainly, I mean, if you go to the monthly chart on this, the monthly chart shows this huge move that this had and a very serious correction, of course, not something that you would have wanted to sit through.

16:55Alissa Coram:But now we're not quite at those all-time highs, but certainly well on our way. And it's such an important company. You've got the fundamentals down on this stock so much better in terms of how you're using it. But there's also you just see all of these budding entrepreneurs kind of doing their their stuff with Shopify. And it's kind of allowing that freedom for a lot of the infrastructure part. That's really hard for a sole proprietor to do on their own. Shopify is taking care of it for them. And so a very interesting company. It's, again, a very good setup. It hasn't moved yet. So this is something that I think should be on the radar, because if you don't have it yet, I think there's still an opportunity to get into it.

17:40Alissa Coram:Just wait for this to cross that resistance level with some gusto. And because of this tight action, you again have a very easy way to kind of let you know when you're wrong, whether that's using the 21 day moving average line, or you could even let this get to the 50 day. But the 21 day is certainly an early warning. You can at the very least be trimming back your position if it does cross below that.

18:03Justin Nielsen:Right. It's about 6 % above the 10 week line. So I am using the 10 week and trying to be patient with this one for now. I will have to see with earnings coming up in about two weeks if I continue that path. Also, the 21 day, as you mentioned, this is a stock that has clearly shown over the last couple of months. It is a choppy ride, but it is finding support around the 21 day. And I would say just very briefly on the fundamental side, in addition to what you said about being able to make entrepreneurship more accessible in the e-commerce space. Also, you are seeing major online retailers adding Shopify as a checkout option, just like Apple Pay or Amazon Pay or PayPal.

18:48Justin Nielsen:And I really like the shop checkout experience and how you are able to track all of your packages from different vendors all in one place, something that's really helpful for me. So I do think that it's interesting, but we'll have to see what the next earnings report is like, Justin. And yeah, and I mean, that's going to be the case.