Mixed Session For Stocks; Alphabet, Primoris, Rocket Lab In Focus

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0:25Justin Nielsen:Good afternoon, everyone, and welcome to Stock Market Today for Monday, April 27th. It's Alyssa Coram here. And a mildly mixed day as a big week for earnings season gets underway. Joining me now to discuss this day's action and what to expect for the week ahead is my colleague, Justin Nielsen. And Justin, as always, it's great to see you.

0:47Alissa Coram:Great to see you as well, Allie. Yeah, big earnings week indeed. I think there's over 200 stocks on the S &P 500 that are reporting this week. So almost half of them, really. But we're going to cover a couple of stocks that, I mean, some of them have some earnings coming up, some of them don't. A big one, of course, is Alphabet. We'll talk about that as well as a number of members of the heavy construction group. So we'll just take a look at Primorus today and then we'll finish up with Rocket Lab. And I do have a position in Alphabet and Rocket Lab.

1:17Justin Nielsen:Sounds like a plan, Justin. We'll take a look at those stocks. But first, let's take a look at the major indexes, as we always do. The Nasdaq Composite reversing higher in today's session, finishing up about two-tenths of a percent. The S &P 500 also green on the day up about one-tenth of a percent. On the downside, we did have the Dow down about one-tenth of a percent or so. And the Russell 2000 was also in positive territory for the day, up just a hair here. But the tech-led rally continues here, Justin. the strongest sector, arguably the chips, can't even really keep the chips down. Here's a look at SMH finishing essentially flat on the day.

2:04Justin Nielsen:I know early on in the session on IBD Live, we were taking a look at a number of chip stocks taking a hit, but sort of the consensus was, well, hey, they kind of deserve a break here going up like they have. So SOXX is another one that we can take a look at. But what do you make of the strength of this rally that continues? And who knows, of course, what all of these big earnings will do? Will that be the catalyst or maybe the spark for a more pronounced pause or pullback? We'll have to see.

2:39Alissa Coram:Yeah, no, absolutely. It's one of those things where even if you told me what the headlines were ahead of time, I don't know that it would help because sometimes it's not the headline so much as the reaction to the news that is really important. But certainly it's worth noting, again, the strength, where the strength is. And the NASDAQ composite certainly sticking out. The S &P 500 last week notably got above its April 17th high, as you have shown so wonderfully there. But the NASDAQ composite had already kind of been getting over that high and was really just adding to gains. And so that's that's what's been happening.

3:17Alissa Coram:And you mentioned SMH. You know, a good thing to just recognize here is there were a lot of chips that were very early movers in this in this market. And meantime, NVIDIA was kind of a little bit of a slower, a slowpoke. But NVIDIA, very strong day today. So SMH, again, you know, you had some of the early movers taking a break, but NVIDIA, you know, breaking out pretty considerably after having already cleared an earlier resistance level and downtrend. And I do have a position in NVIDIA as well as SMH and SOXX. I've got chips.

3:58Justin Nielsen:You took a dip into the chips.

4:01Alissa Coram:Yeah, dip with the chips. So, yeah, and the S &P 500, again, not quite as strong. And the Russell, again, that one hasn't popped into new high territory. I mean, it's right there. It's not like it's doing anything wrong. But its pause is a little bit more pronounced there at the 2800 level. But really, you look at RSP. And again, just to kind of get a sense of what your average stock is doing, you know, this looks very different. So that does kind of tell you that it's not necessarily, you know, a rising tide lifting all boats here. Certainly, RSP was very strong out of the gate, getting above its 50-day moving average line.

4:45Alissa Coram:But it's tapered off a little bit here, whereas the NASDAQ has continued to run strong. And let's just take a look at MAGS, M-A-G-S. That's the Roundhill Magnificent Seven. You know, this looks a lot more like the NASDAQ, right, with that, you know, strength coming up, you know, not quite to new high territory because of the action in November and January. But this is this has had quite a move and looking very strong and certainly helping with a lot of the heavy lifting that the Nasdaq is doing. And I should also put as part of the backdrop that a lot of the strength is happening despite the rise in oil.

5:25Alissa Coram:You look at USO and, you know, you know, you have these big moves here and it's not tempering the enthusiasm in a big way. The market is kind of going up despite a lot of the fears with oil, a lot of the fears with Iran, the Strait of Hormuz, everything like that just really doesn't seem to be keeping this market down. And also, it's worth noting that the whole tech sector, you know, it has been uneven, whereas the chips have been so strong. IGV and the software, you know, really took a hard hit. And, you know, that was coming back a little bit today. But, you know, I mean, what was that ServiceNow that took a real big dive last week and really punished the IGV, which was already in a very bad position.

6:19Alissa Coram:So, yeah, certainly not equally dispersed around here. But, yeah, this is why we go with where the strength is, right? Exactly.

6:29Justin Nielsen:Yeah, we have the relative strength line. We can also screen off of the relative strength rating, which speaking of got some updates over the weekend, Justin.

6:40Alissa Coram:It did, yeah. So it should be a lot more, you should notice that it's a lot more responsive, especially to, you know, recent activity. And that's true of not only the regular RS rating, which is a 12-month rating, but also the three-month and six-month. Same for our industry groups. We used a six-month RS rating for our industry groups as well, and that has turned a lot more responsive, in addition to the big changes, the industry group as well. Right.

7:10Justin Nielsen:And we're comparing ETFs versus ETFs, individual stocks versus individual stocks. So that's also something worth noting. It makes a lot of sense.

7:21Alissa Coram:Yeah. We've removed a lot of the lower liquidity stocks where you could have something that, you know, trades at 30 cents and goes up to 50 cents. And yes, that's a big move. But, you know, is that really something we want to give a 99 to? and put it in the same category as an alphabet or one of those big, big stocks. Trading at Schwab is now powered by Ameritrade, giving you even more specialized support than ever before. Like access to the trade desk, our team of passionate traders ready to tackle anything from the most complex trading questions to a simple strategy gut check. Need assistance?

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8:12Justin Nielsen:So speaking of, let's take a closer look at Google Parent Alphabet, which does have a 99 composite rating, Justin, here heading into earnings. We've got a breakout closing above that round number of 350 today. So that's also notable. A couple of entries along the way here over the last couple of weeks up the right side of the base, whether it was that gap above the 50-day line, you know, a little pause that developed a couple of days later, or a more recent pause, and now this breakout. So talk to the audience about the entry points that you used for this stock. And now I'm thinking on a weekly, we may have a blue dot here.

8:56Justin Nielsen:Yes, we do. So the relative strength line is in new high territory. That earnings line looks fantastic. So if you're talking about liquid leaders, Google definitely among them.

9:10Alissa Coram:Yeah, no, absolutely. And again, very strong, very strong EPS rating, very strong composite rating, as you pointed out. In fact, you know, that that's something that also changed a little bit, because, again, since we changed all the components, underlying components, the composite will will change a little bit, too. Before this was at a 96. So this has actually gotten a little bit of a boost there. And some of that from the accumulation distribution rating, you know, it was at a B minus and that's at a higher level. Now the accumulation distribution at a B plus. And some of that is because we're giving a little bit more credit on the daily chart to some of those very high closes, you know, where it closes high in the range.

9:55Alissa Coram:You know, it gets a little extra, a little extra for that. But Google, you know, on the daily chart, if you go back to the daily chart, this certainly was viable along with the market as this crossed above the 50 day moving average line. I know that's one of your favorite things as something crosses back above the 50-day moving average line with strength. And then it had another option there just a few days later because it had a really nice tight pause. But I'll be honest with you, I was a little bit slower on this one. It wasn't until I really saw how the shift was happening to the Mag 7 that I said, OK, well, I'd like to get a little bit more exposure to one of those.

10:36Alissa Coram:And Google seemed like the one to do. Now, the trick here is I was buying this on Friday, but we don't really have much room before earnings. So I'm looking at getting, you know, a little bit of a cushion. But I also this is where something we were talking about on IPD Live this morning is, you know, you can take a look at something like Google or Alphabet and say, OK, well, gosh, what is the history look like on this? You know, this doesn't really, you know, get hammered very hard on earnings typically. You know, this last one was a little bit of an anomaly, but that was also in a rougher market environment.

11:14Alissa Coram:So a little bit tougher to blame it too much. So, you know, if I can get a little bit of cushion ahead of that and things are looking good and, you know, look, I can always scale it back a little bit, go with a smaller position size, take a look at the options market. something else we were talking about today on iBD Live. You look at the at the money call added to the at the money put those two premiums together to give you a sense of what the expected range is based on implied volatility and the options market. That's for the nearest expiration. And there's a lot of information that you can just kind of get from the market itself before you even look at the fundamentals.

11:51Alissa Coram:You know, this is all on the technical side. So, you know, it can it can help inform your decision and whether or not you hold based on your personal strategy, you at least have some good data that you're working off of.

12:07Justin Nielsen:Exactly. All right. Well, it's in a strong position heading into the earnings report. And we know that AI spending is going to be very closely watched by the comments on that by the investing community, what management has to say and potentially we could see ripple effects across the entire AI ecosystem this week with so many big reports. Yeah.

12:35Alissa Coram:And just as a reminder, since it's really important for people who are trying to keep abreast of all these earnings reports, you know, we have we have help in the paper. We have our earnings calendar that comes out in the paper. We have that information also available on investors.com. And certainly don't forget about the earnings cheat sheet that Ed Carson and Alexis Garcia do every Friday morning.

12:58Justin Nielsen:Great show. And yeah, if you want the IBD perspective on stocks to watch for the week ahead with earnings, the numbers to watch, the impact, that is definitely the show to check out. Okay, moving on, Justin, next on our list, let's take a look at ticker P-R-I-N. And this is Primoris in the heavy construction group. And you mentioned a lot of those names have earnings coming up as well. Primoris reports in just a little over a week from now. Yeah.

13:28Alissa Coram:And again, this is really one of those AI adjacent plays, right? You say heavy construction and you start thinking, well, gosh, is this, you know, getting out the tractors and, you know, doing building projects. but really why this whole group has been doing so well, why you see it as, you know, very high in the ratings. And what is that, 26? The reason is because it's AI adjacent. A lot of the heavy construction that they're involved with is on the data center side. So that infrastructure and, you know, HVAC systems, which we also see, you know, members like Modine and Fix doing well also. So but yes, it was interesting because back when the deep seek, you know, you remember back in January 27th.

14:15Alissa Coram:I remember it very well. It was, you know, a big hard hit. Right. And I did a quick little correlation study and heavy construction, you know, just OK, because we all knew that NVIDIA was an AI play. But one of the most heavily correlated stocks to NVIDIA was STRL, Sterling Infrastructure, in the heavy construction group. So, again, a lot of these very heavily correlated to AI. So just know that kind of going in that, you know, if you think, oh, yeah, I broadened out into heavy construction as well as chips, you're still heavily AI dependent. But Primaris, you know, one of the reasons why I wanted to talk about that one is because here again, we've got a lot of very, very strong ratings.

15:03Alissa Coram:You know, the earnings, you know, has had a strong earnings line here. I mean, look at the rate of change here for that earnings line recently. You can see those numbers in the annual block as well. These are some pretty impressive numbers off of not small, right? It's not like it's going from five cents to ten cents. This is some really strong numbers on the earnings side. So you've got that and also very strong relative strength. So again, very high composite rating here. And look at how many weeks up in a row. So a lot of people might look at this and say, well, gosh, that's maybe a little too stretched.

15:44Alissa Coram:But that did put us right here at a breakout level. And we did get a little bit of a pause there on the daily chart. So that is making me feel a little bit better about some of these. And you certainly have a situation where this isn't alone. So I think you could have really, you know, you could have bought this last week, you know, as it was kind of coming off of that resistance area above there. And then it really kind of just had a very mild pullback upside reversal today, along with a lot of other stocks looking pretty strong. So, again, earnings coming up. So that is a risk factor. And you also have a lot of other members, just to name a few.

16:26Alissa Coram:You know, we already looked at Sterling, but APG, ECG, this was one that we looked at on IBD Live today, EME, you know, the list goes on. So there's a lot of these that are in a very similar position, having really moved strongly up off the bottom and breaking out to new highs.

16:45Justin Nielsen:Right. And that's such a great point. I think worth reiterating all throughout earnings season is, you know, take stock of your portfolio. Obviously know when your companies are reporting, but also whether it's peers, suppliers, or just thematically an overlap, right? You need to know these other reports that could potentially impact your holding. So that way, you know, you're not waking up one morning and saying, oh, what happened? Obviously, it's all about the reaction and the technical levels, of course, but having that context. So you're not surprised, right? That also helps.

17:28Alissa Coram:Yeah. And EME, for example, MCOR, this one has earnings in two days. So maybe for Promoris, you get a little bit of a jump on, oh, OK, what what did EME say and how might that affect Promoris?

17:40Justin Nielsen:Right. Exactly. Could have some tells there for the group. OK, let's now round things out with Rocket Lab reversing higher, closing above the 80 level. So a little pullback here. Was today your signal to get in, Justin? Yeah.

17:59Alissa Coram:So we put this on Swing Trader. And so after the 30 minute waiting period, I went ahead and put this on in my account. So I like where it got support. You know, it came down. And look, a lot of the space stocks came down. If you take a look at UFO, you know, it was looking very strong. A lot of stocks really, you know, moving in this ETF. It's pulled back, you know, quite a bit. But I mean, it doesn't look too bad because it came up so much. But, you know, off high, that's not nothing, right? That's almost a 10 % drop for an ETF off its high. And Rocket Lab is certainly, I think, one of the big players in the space area.

18:40Alissa Coram:So certainly, you know, it was a hard hit off highs. But this is exactly what you want to see. You want to see that buying support come in. and Rocket Lab had it in spades, coming in right kind of at the bottom of that gap up day, right at that horizontal line that you drew, right at the 21 day moving average line. So you have all of these different, you know, the support is kind of at the same level, but you get at it all these different ways. So you could imagine a lot of different strategies looking at the same level and saying, hey, this is where I would wanna add to my position or start a position or protect my position.

19:20Alissa Coram:Because remember, some of these institutions, they want to stop the bleeding and make sure that they show the market that there is buying underneath the surface there. And so whether they want to or not, sometimes they'll buy it just to stop the selling or absorb some of that. And so having all of those different levels kind of correspond to the same exact spot almost was pretty impressive. So, and you had an upside reversal. So the fact that it came down, got that support and finished so high in its closing range, you know, making progress versus, you know, last week, you know, now it has it has a ways to go still.

19:59Alissa Coram:But this is how moves start. And so if you're looking at buying stuff off of pullbacks, this is this is exactly what you're looking for.

20:07Justin Nielsen:Exactly. Yeah. A very well defined stop as well. Yeah.