Market Shows Mettle And Relative Strength In The NYSE; Advanced Energy Industries, Heico, Ubiquiti In Focus

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0:38David Saito-Chung:Good afternoon, everyone, and welcome to Stock Market Today for Monday, February 9th. It's Alexis Garcia here. And the S &P 500 and NASDAQ popped today while the Dow tried to hold the 50 ,000 mark this Monday. This after a volatile trading climate last week. And for investors, it's yet again another busy schedule of earnings and economic data this week. So here with me to help break down everything you need to know about today's trading action is IBD Deputy Markets Editor David Saito Chung. Dave, it's great to see you. I hope everyone has a great Super Bowl week. I don't know, maybe you won some money.

1:24David Saito-Chung:I don't know. I certainly didn't.

1:25Alexis Garcia:And yeah, I don't I don't bet on the Super Bowl. Therefore, I don't shed any tears, whoever whoever wins or loses. And but it was it was fun. And so was the halftime show. It was it was very memorable. I'm glad you had a good time enjoying it.

1:40David Saito-Chung:Yeah, yeah. It was great to get together with friends and family. So hope all of you out there had a great weekend as well. But what do you have on top for us today? Another seems like the market's also gearing up to have possibly a great week as well.

1:55Alexis Garcia:Well, believe it or not, I actually wanted to link one of the names that we're going to talk about to the amazing defense that Seattle Seahawks played. Congratulations to them, by the way. And so we'll talk about AEIS. This is Advanced Energy Industries. They've got earnings coming up. We'll also talk about an aerospace play, HEI, that's Heiko, and then top it off with a stock that really surprised me how strong it was today, UI, which is Ubiquiti. All right.

2:30David Saito-Chung:Well, we will get to those names. Let's just quickly round up the major indexes. The S &P 500 finishing the day up almost half a percent. The Dow also looks like it finished the day up fractionally. The NASDAQ up at nine-tenths of a percent and small caps up about seven-tenths of a percent, Dave. So I'm going to go ahead and get our chart going here. I'm on SPY. And we can see, you know, on Thursday and Friday dipped below that 50-day line, but it has since rebounded here, Dave. And again, back almost to record highs. So it's been a little bit of a roller coaster here for investors.

3:11Alexis Garcia:I think you're right. I mean, you look at the action over the past two and a half months and we've been dipping below or near that red moving average to 50 day line many times. And yet the S &P has shown enough strength to make some new highs and keep its positive mojo so far for 2026. And it's reflective of some strength in areas outside tech, which has been so strong, as we know, for a couple of years. and so therefore you know we are keeping a close eye on the on the small caps with the iwm as you highlighted that one is not at an all-time high yet but boy it's the highest close or one of the highest closes in january right and i always like to think of the iwm as well as if you don't mind typing in 0S &P6.

4:05Alexis Garcia:This is the small cap 600. There you go. This actually had hit an all-time high on Friday, and then we should see that strength in today's action as well. So this is an indication that the economy is still healthy. Earnings are rolling along, and those are two very important factors for equity returns and interest rates are pretty stable. So, so far, I'm liking what we're seeing in the market. And then let's go over to the, oh yeah, there you go. There's a 10-year treasury. We didn't really plan to talk about it because it really didn't move much, right? But it is still, when you look at that chart, this is a very important chart.

4:49Alexis Garcia:And I'm glad you brought this up, Lexi, because you go back to January, 2025, you can see 4.80. You take that number, those marked highs and marked lows, divide that by 10, and you'll get that benchmark yield for the 10-year treasury. 4.80%, yeah, we are much below that, which reflects a very supportive interest rate environment, supportive monetary policy for stocks. Now, let's go also to 0NYC. This is the New York Stock Exchange version of the NASDAQ, and look at that relative strength. Look at that. It's new highs. If there's anything that should put to rest any doubts that you can go long in the market, I think this is a good indicator that New York Stock Exchange Composite has been riding along its green line, that 21-day exponential moving average for at least two and a half months or so.

5:52Alexis Garcia:So very impressive action there. And therefore, maybe keep a close eye on what pops up on your watch list and see how many stocks are coming from the New York Stock Exchange and how many are coming from the NASDAQ. You actually might be seeing more of a balance between the two.

6:09David Saito-Chung:Yeah. And just looking at the NASDAQ again, another positive day here, inching closer to these conjoined 21 and 50 day lines. But this one has been kind of lagging a bit here, Dave. So thoughts here?

6:23Alexis Garcia:Yeah, I think it's still basically range bound in terms of NASDAQ stocks. One stock I own, NVIDIA, NVDA. We talk about it a lot on IBD Live. I hosted the show today. We decided to add a small position, quarter size position on the leaderboard model stock portfolio today. And it finished a point below the leaderboard entry. But here is a good example of how the Nasdaq reflects some sideways movement among some really great companies that have had some really nice long price runs. It could be a while before some of these stocks really break out and then assert their leadership. Let's take a look at Q's as well.

7:06Alexis Garcia:While we're at it, the Q's represent the 100 largest non-financial companies. And you can see that Q's is lagging the New York composite that we showed. and it's lagging the S &P 600 small cap index that we showed. And so therefore, when you're looking at NASDAQ stocks, don't ignore the financial companies like the banks. There are lots of tiny little banks that are in the NASDAQ composite. Those have been doing well. And I'll just throw out one more ticker and we'll leave it at that. And that's KRE. This is a regional bank index. And you can see that this will probably include stock companies and stocks that are on the NASDAQ as well as on the New York Stock Exchange.

7:49Alexis Garcia:And that one's had a nice breakout past 70.

7:52David Saito-Chung:Yeah, looking pretty good here at the top of that buy zone, Dave. Let's wrap this up by looking at GLD, the gold sector ETF. You know, we saw some perhaps climatic action here pulled back sharply to break the 21-day line. Seems to have found its footing here a little bit. So talk to me about what's going on with gold.

8:14Alexis Garcia:very nice rebound so far here lexi i think uh if it were a bigger test of the precious metals you would have seen gld and it's and it's silver and the silver proxy slv maybe touch and test the 50 day moving average and that's what happened with with silver but this is the kind of rebound you would expect for something that's strong and making a a pullback now this pullback is very unusual. I mean, it was very, very sharp and very, very steep and fast. But for now, it seems like investors still want to have a hedge against uncertainty over a variety of issues, as well as the fact that if I think gold doesn't have any real usefulness outside the jewelry part of manufacturing.

9:08Alexis Garcia:It's seen as just a safe haven and people have treasured it for millennia. So that's why it has value in someone's portfolio. And as I've said, I think on the show and other places before too, gold has had a nice run, not simply because central banks around the world might be accumulating it, but also because if interest rates go lower and inflation stays closer to 3 % versus 2%, that real return, that post-inflation return on bonds gets shrunk, and therefore institutions in general like to hedge by using something like gold. Yeah.

9:49David Saito-Chung:How much of this is related, Dave? We've seen Bitcoin really plummet here over the last month or so. How much of that is related to what we're seeing with gold?

10:02Alexis Garcia:That's an excellent question a lot of people like to ask. And I've wondered, too, whether there's some kind of relationship, like a negative correlation, right, between strong gold and weak Bitcoin, strong Bitcoin, weak gold. I don't have a definite answer to that. But you would you would reasonably guess that profit taking in something like Bitcoin produces some cash that wants to find a home. And perhaps there has been some flow going away from Bitcoin and into these precious metals. But keep in mind that gold and like a lot of commodities, as well as bonds and equities, these are huge reservoirs of capital.

10:46Alexis Garcia:And so it's not as easy, in my opinion, to just say there's always a direct causal relationship between the two. I would just treat both as, in general, just separate markets. And maybe those people who sold Bitcoin, maybe they're waiting for another opportunity to hop back in. Are they going to be all of a sudden gold bugs? Really, really hard to know.

11:15David Saito-Chung:Yeah, thanks for that commentary there. Let's go ahead and look at some individual stocks.

11:45David Saito-Chung:Book now at Hilton.com. Hilton for this day. Start with AEIS, that's Advanced Energy Industries, up over 2 % today. Dave, what's the thoughts here? Yes.

12:01Alexis Garcia:Well, I was thinking about the Seahawks defense, how they were suffocating the Patriots for most of the game on Sunday. and we know that defense wins games. Defense, good defense wins in the stock market too. And what do I mean by that? Well, you can see on that market surge daily chart, you have a lime green or a mint green strip highlighting where the stock has achieved a 20 % to 25 % profit from that recent cup with handle breakout at$2.2437. And certainly that breakout was rocky. Initially shook people out and fell briefly below the 50-day, but then righted itself and had a second re-breakout.

12:43Alexis Garcia:And it's been really great. On the other hand, we have earnings coming up and you just never know what could happen on earnings. This is a great company in terms of the fundamentals, Denver-based company that has energy power conversion products for a variety of industries from manufacturing to medical to data center to chip equipment and whatnot. And you can tell by the fundamentals that it is a very dynamic, very impressive company in terms of the fundamentals. Bottom line, top line growth is just really, really excellent. And the estimates looking forward are also very, very strong. As you highlighted there, 28 % earnings per share estimates coming up.

13:24Alexis Garcia:But we do have earnings coming up. And you can see that in the prior report, if you go to exactly in November 4th, It had a big update, but then it slid alongside with the market and gave up all those gains. And so what I'm trying to say here is that don't be afraid also to defend your profits in a stock such as AEIS. It could go up another 20, 25 percent here or even further. That's definitely possible given the sort of personality of the stock. But I just want people to remember that defending your profits, taking at least partial gains on the way up in the stock is also really, really good rule to have in terms of portfolio management.

14:13Alexis Garcia:Let me also highlight that according to its Q3 report, they gave an outlook for earnings of$1.75 for this latest quarter that's going to be reported upon tomorrow after the close, I believe. And$1.75 plus or minus$0.25. So if they come down$0.25 below, that would really reflect deceleration and could lead to a disappointing reaction. If they report$0.25 above that midpoint of$1.75, it might encourage more buying in the stock too because it would maintain that really strong double-digit earnings growth. Also, the outlook for revenue is at 470 million plus or minus 20 million. If you don't mind scrolling down to the bottom there, you can see that the market surge consensus estimate there is 470.2 million.

15:07Alexis Garcia:I'm a little concerned about whether growth can continue to go at a clip that it's shown in the past in that mid-20s, low to mid-20s. It looks like growth could slow down a little bit, but we'll get definitely some more detail tomorrow.

15:22David Saito-Chung:All right, Dave. Well, thank you so much for that. So perhaps thinking about taking some potential profits here, I guess you can always buy back the stock. That's always an option. Let's go ahead and move on to HEI. That's HICO in the aerospace defense sector. This one reversing lower today, Dave, down about 1.3 percent and falling even more below the 50-day line. Yeah, I don't think this is a stock that you can buy right now, but I wanted to highlight this stock based on some research done by a longtime veteran growth stock investor

16:07Alexis Garcia:and fund manager, Louis Navalier, recently had a nice conversation with him. he wrote a book called The Sacred Truths of Investing. And what I liked about that book was to talk about finding stocks that can rise 100 ,000%, which would be a pretty amazing return on any stock that you can get, 100 ,000, right? 100 ,000 % is just incredible. That's a hundredfold gain, a hundred bagger, if you will. and to appreciate uh hei you you you'd have to go to the monthly chart and then and then zoom out a little bit maybe you don't have to even zoom out but maybe yeah there you go if you if you uh look at heiko the stock uh had traded below three dollars a share back in the early 2000s but it was breaking out now this isn't a this is a split adjusted chart i i would assume that there were some splits along the way.

17:08Alexis Garcia:But you can see that this is a stock that had the potential. I mean, it proved that some stocks have the potential to make such a big gain and join that so-called 100 ,000 % club. Well, today, this company is now a large cap, but a long, long time ago, it was a micro cap. It was a small company. If it was 44 billion, right, then yeah, it was a company with a market value under a billion. So definitely you want to be looking for companies that have that durable earnings and sales growth in an industry that might undergo a lot of positive change. There's no doubt that aerospace is constantly evolving and changing.

17:52Alexis Garcia:We're looking into the growth of space exploration. There's a lot of small companies and mid-cap companies that are exciting right now in the market. But I just wanted to highlight Heiko as one good example of that. There is proof that equities can deliver you over a long period of time for a very patient, long-term investor, an incredible return. Now, let's go back to the daily chart and then zoom back in. The final point I want to make about Heiko is that when you have a company like this, it doesn't mean that every single breakout to new highs is going to work out. And so to me, what I see is a stock that's not ready yet to maybe make a new move.

18:33Alexis Garcia:But if you've owned a stock like this and you see a pullback down to the 200-day moving average, if it holds around that 200-day moving average and then starts to rally again, that could be your sign to either hold on to the shares you have in something like HIKO or even maybe possibly initiate a position.

18:51David Saito-Chung:All right. Well, we'll be watching that. I think right now that is coinciding with the 313 level there. Let's go ahead and wrap this up with a look at Ubiquity, Dave. That's ticker UI. A nice, nice gain today, up about 14.5 percent, again, following a strong gain of 8 percent on Friday. looks like again breaking above this kind of 600 level here looks again looks like it's maybe

19:22Alexis Garcia:going vertical Dave the last couple days yeah I mean we wouldn't say this is a vertical move yet because it's still in a base and you can see three months ago it had a negative reaction to earnings, even though the earnings were pretty solid, you know, for Q3, 62 % EPS growth and a very, very nice increase of 33 % on the revenue now is going the opposite direction. It's going bullishly up on another really great report. So this is a company that I used to trade a long time ago, and I haven't touched this in a long time, but I'm very interested now, especially given that telecom infrastructure was one of the best industry groups today.

20:06Alexis Garcia:If you don't mind clicking on telecom infrastructure at the top left, yeah, you can see that. I'm not sure what happened at the very end there, but you can see that the last couple of days or last three days, it's had a very impressive move. And DICOM, DY, is a stock that we've talked about on IBD Live. And they They do a lot of the heavy digging and construction for fiber optic networks and above ground data networking, too. So a lot of interesting stuff going on here. I would suggest that, you know, going back to Ubiquiti UI, given that they have expertise, I think, in a variety of networking technology.

20:52Alexis Garcia:Check out what was so bullish about the report. beyond those really strong earnings and sales.

21:01David Saito-Chung:So with this one, Dave, after kind of jumping above some of these short-term levels here, it looks like maybe a little bit extended from the moving averages. What would you be looking at to set up potentially next with Ubiquiti?

21:16Alexis Garcia:You know, there are a couple scenarios. One is it gets closer to 800, cools off a little bit, has a few down days, a few quiet days, volume dries up, and that would be a possibly good handle in which the handle forms just underneath the left side high of 803.60. It might not do that either. We generally look for handles to form over at least five trading days or a week on a weekly chart. If it doesn't do that, well, the cup without a handle breakout would mean that you would be buying around 803. Keep in mind though, too, that sometimes you got to break out and then it turns out to be a fake out, shakes people out and then tries to break out again past 800.

22:01Alexis Garcia:And so all those scenarios are definitely on the table and you just have to be flexible and nimble when it comes to trading a stock that can move as quickly as Ubiquiti.