Nasdaq Breaks Out, S&P Hits High As Rally Strengthens: ASML, APMD, FDX In Focus

0:10Ken Shreve:Good afternoon, everyone, and welcome to Stock Market Today for Thursday, August 13th. It's Alissa Coram along with Ken Shreve here. And Ken, a bullish day for the major indexes. Yeah, lower bond yields, falling oil prices. That's usually a good mix for rising stock prices. So, yeah, good day for the stock market, record high for the S &P 500. Found some stocks, Ali. Good day for chip stocks. I want to take a look at ASML, which is quickly working its way towards highs. Chip stocks looking better and better here, so ASML. Also want to take a look at a recent IPO. Came public in late July, a very small company, but doing some interesting work in sleep apnea, APMD.

1:03Unfamiliar name, but I want to talk about that one. And then also FedEx forming a base here, large cap FDX.

1:10Ken Shreve:Okay, we'll take a look at those stocks. But first, a closer look at the major indexes. The Nasdaq Composite on the day leading the session up 0.8%. Meanwhile, the S &P 500 up about 0.7 % on the day. Look at that, Ken. Pretty bullish technical move there. We'll unpack it. Also, the Dow up 0.1%. So this did fade. We are still holding that gap up from the other week. And the Russell 2000 small cap index up about a quarter of a percent on the day, also closing off highs but in high ground. Let's kick things off with the S &P 500. We're clearing the range that we were forming at highs over the last couple of weeks.

2:01Ken Shreve:So exactly what the bulls want to see. Yes, indeed. We were talking about that nice strong move by the S &P 500 and that kind of just tight sideways action and very constructive sideways movement for VOO and the S &P 500. and that tight sideways action eventually gave way to a nice bullish up session today. And I'm just looking at the homepage of investors.com. It looks like we had volume on both exchanges today, coming in a little bit higher than what we saw yesterday. So we always like to see a little bit of volume, a little bit of conviction behind the buying today. So it looks like we got it on both exchanges today.

2:51So we'll take that. And, you know, a close in the upper half of the range, it looks like, for both the NASDAQ and the S &P 500 today. So a nice little mini breakout for both indexes today. And, you know, once again, good action underneath the surface today as well. So overall, a solid session, no doubt about it. Yeah.

3:16Ken Shreve:And while the NASDAQ is not in new high territory yet, it is getting closer and closer to that round number of 27 ,000. And just above that would be new high territory. From a technical perspective, it almost seems, Ken, like we have a handle that was tacked on to a double bottom-like structure here for the NASDAQ. So, you know, when we see this type of action in individual stocks, we see that as an opportunity to buy. So while traders have likely been getting exposure as the market ramps back up, this digestion over the last couple of days has now presented us with another opportunity, perhaps, to get more involved.

4:03Yeah, absolutely. I mean, that really nice four-day rally that we saw recently for the NASDAQ, we got our buy signal on that fourth day right there. That's when we kind of switched our outlook on the homepage of investors.com. And then after that, that fourth day, you know, we just did the index just just kind of paused after four days of really strong gains and notice it really didn't give up a whole a whole lot of ground. And it just kind of paused and and digested digested gains. And that's the time where a stock will often pause and digest gains and just kind of paused and shook out some some sellers.

4:44But all the while, it wasn't a violent shakeout and held above the short-term moving averages there. And yeah, that little pullback for five or six days, it just paved the way for some higher volume to come into the NASDAQ today and let the NASDAQ break out over some recent highs and broke out over some resistance levels. So now, yeah, that 27 ,000 level, you know, could be some resistance, you know, for some short-term resistance. But, you know, I wouldn't be surprised to see the NASDAQ take out that 27 ,000 level. But it is a round number. And, you know, the NASDAQ could bump into it for a couple of days.

5:29But, you know, with that breakout today, with the volume that we saw in the NASDAQ today, you know, it wouldn't be surprised to see the NASDAQ eventually plow right through 27 ,000. And we get a bona fide breakout here today. So, so far, so good with the uptrend here. And we got, you know, good bullish action today. So I think it raises the likelihood that we should be able to fully, you know, break out here into all-time highs. We'll see.

6:02Ken Shreve:And in terms of what helped fuel the market's gains today, a couple of things. Cooler than expected inflation data. We did also have falling oil prices. So that typically helps. We also had declining treasury yield, something that also helps lift the market. And then we have the chip area, maybe a little bit of resistance here, Ken, but it does seem like chip stocks and the AI trade, we're seeing a lot of names continuing to make a comeback. Yes, yes. It is interesting, Ali. You know, the market is very optimistic about a lot of different things here. I mean, there is a lot of headwinds out there for the market, you know, whether it's geopolitical events, whether it's the economy.

6:56There's a lot of headwinds out there. But, you know, we're just going with the market here. The market is optimistic about a lot of things. I mean, there are questions about inflation. We had two good prints in a row. We had producer prices today that were relatively tame. We've had two months in a row of pretty benign consumer inflation data. We had inflation data for July that was released yesterday. Prior month in June, that was also tame. So two months in a row of pretty tame consumer prices. but you know there's still you know there's still some concerns out there that inflation is still kind of sticky and you know concerns about the the consumer and but the market is just you know optimistic and we're just kind of paying attention to the market here up near highs and and looking at the a lot of good action in individual stocks obviously iran is still very unsettled but today we had falling oil prices and lower bond yields and the market responding to better than expected wholesale inflation data.

8:07So if we, you know, just paying attention to the market here and paying attention to price volume and the action in individual stocks, there's plenty to like here. So that's what we do. We try not to, you know, get too bogged down with the negative headlines. But again, if we start to see distribution and signs of institutional selling, professional selling, then we need to pay attention to that. But right now, the market action is pretty bullish.

8:38Ken Shreve:Well said there, Ken. Okay, we also want to point out the action in software. There was some pretty significant software sector news today, Ken, and IGV up over 3%. Yes, this was a breakout for IGV, no doubt about it. IGV was up more than 3 % today, and that was a very bullish move today. So software has been moving very, very well. And, yeah, nice move for IGV today. And again, the chip stocks have been performing well. They kind of rolled a flip-flop today because software lagged quite a bit yesterday. And SMH got a little bit of resistance there near that 600 level today. And then in terms of software sector news, Workday popping on acquisition buzz by Silver Lake.

9:45like a Silver Lake takeover, and then you had names in the group also on the move,

9:50Ken Shreve:whether it's ServiceNow, CRM, Adobe. So that buzz fueling some of the software sector strength. But we have, in general, been seeing a continued flow into the software sector more broadly. So just wanted to make that out. Yes, yes, yes. I was talking with Dave late in the morning, and we were going through the market surge, growth 250, I was looking at workday. I was like, God, that's what, didn't even notice that surge in workday late in the day. So I apologize. I did not see that big move in workday late in the session. So I missed that acquisition news there. So I had to plead ignorance on that one.

10:38Ken Shreve:We've got each other's backs. Ken, you're a wealth of knowledge. So you're good. Thank you. Yeah. I, you know, Ed, that's where I get my news. There you go. So it was Silverleaf. There was some acquisition. Yeah. Acquisition buzz. Interesting. Okay. I saw the big price bar and I saw the volume, but yeah, I was doing four different things and I didn't. Only four, Ken? Yeah. There you go. I know. You're juggling a lot. Yeah. Okay, let's move on and take a look at a name in the chip sector that we've been watching. And this is ASML. I know you've been keeping a very close watch on this semi-equipment group in particular, Ken.

11:22Ken Shreve:Here's another one continuing to round out the right side of a base. Got back above that key 50-day moving average, that red line there in recent sessions. And it's also now back above the bulk of trade from late June, early July. So it's now, you know, less than 8 % away from the prior all-time high. Yes, yes. And we are, this is encouraging, you know, as we're seeing the market, you know, overall improve here. And we're seeing chip stocks, not all of them, but we're seeing several chip stocks recovering here. ASML, obviously, you know, one of the true institutional leaders in the chip equipment group, known for their extreme ultraviolet lithography machines.

12:12And what they do, they make some of the most advanced chips in the world. The machines cost several hundred million dollars. They make the machines for Taiwan Semiconductor, even Intel. And it's just a real high-quality company here, great fundamentals, and building the right side of a base here. The issue with a lot of these chip companies, they came down in very heavy volume, so their accumulation distribution ratings were hurt. And the one knock I'm going to make against these companies, we're not really seeing much improvement to these accumulation distribution ratings as they rally back up because a lot of them are kind of rallying back in light volume.

12:58It's not a terrible, not a deal breaker, but we're not really seeing the accumulation distribution ratings improve because they're just kind of rallying back in soft volume. So I always like to see a little bit of conviction behind the rally as these stocks kind of come back. So we're not really seeing much volume as they rally back. And it's not, again, not a total deal breaker. The fact that they're back above resistance is a positive. And I think ASML still looks good here. I'm not going to lose a lot of sleep because the accumulation distribution rating has not improved materially here. But hopefully we'll start to see some signs of accumulation as ASML continues to rally here.

13:39So it's done a good job overcoming resistance and the rally looks good. We'll see if it can continue to recover. A lot of other stocks in the boat. I think that the true leaders in the group are starting to show themselves here. ASML clearly is one of them here. So we'll keep an eye on ASML and see how the base shapes up here. But the weekly chart is looking good. Relative strength line is improving nicely as well. And it's definitely a name to keep an eye on here.

14:15Ken Shreve:It is. And on a recent show, we talked about AEHR, which is having a fantastic week. It's up 20 % for the week. It's come sharply up lows. And then AMAT has earnings tonight, right, Ken? So we'll check in on that one soon. Yep, definitely. Okay, let's go to APMD. Recent IPO here, Ken. And, you know, since going public, it looks like it's only had two down days. Yes, it's a small company. It's a small company. I was talking about this one with my colleague, Dave Chung, who's sitting right here next to me and based in Cambridge. It's a little over a$1 billion market cap company, but they had their IPO at$16 a share and it closed at$25 on their first day of trading.

15:09And they went public July 31st. So you can see very, very short trading history here. What's interesting here is that this is a sleep apnea company. And the one major sleep apnea company that we know is Inspire Medical, and they make that implantable device that goes underneath the chest. What ApneMed does is an actual pill. And it's a young company, right? It's a$1 billion, a little over$1 billion market cap. We don't have a whole lot of information on it. But this company has already put this pill through FDA trials, and they already have a new drug application that has been approved by the FDA.

16:00And they're expecting a decision by the FDA in February 2027. So this company has really fast-tracked everything through the FDA. So this one is front and center on our radar. Love this little IPO base setting up. Of course, it's speculative, but, you know, management has got pretty good pedigree here. Very limited trading history, but, you know, a pill for sleep apnea, that's a first of its kind. Again, it's made it through a lot of FDA trials already. The new drug application is filed, and they're expected to get a ruling February 27. So things are moving quickly for ApnoMed, again, based in Cambridge, and some interesting reading about this company.

16:53So I figured I'd bring it to people's attention.

16:56Ken Shreve:Yeah, promising innovation there and a little IPO base forming. I think upside reversal in the prior session was compelling. You couple that with the move today above a lot of the trade since its debut under 28. I could see some aggressive traders going after this sort of speculative name with this sort of aggressive entry here. But at the very least, something to keep tabs on. And then around February, it seems like not only should we be on the lookout for news for APMD, but then what's going to be the impact on Inspire, right? Exactly. Exactly. Great opportunity just to, this is tracked in the development biotech group because obviously they're not generating revenue or profits at this point.

17:53But good opportunity to go to apnemed.com and just gather information about the company. You can learn all about the management team at apnemed.com. You can learn all about their intellectual property. You can learn all about their, just everything about the company. It's a very informative website. You can read white papers. Just educate yourself about everything you need to know about ApneMed. So just an interesting company. And it's just kind of an IPO that kind of came and went without much fanfare, but very interesting, very interesting technology. And I started to, you know, get excited about it when I was reading about it because a pill for sleep apnea is, again, has not been out there before.

18:43This was a first of its kind.

18:45Ken Shreve:Yeah. Anytime that you can have a non-surgical option, right? Yeah, exactly. Yeah. Okay, here's a look at FedEx, Ken, a big day here, up 4%, carving the right side of a base. Yes, and not much volume in the stock today, or at least it was volume picked up the pace, and I regret did not see any news in the stock today, but a nice move higher, and it got very close to that 340 level. So this is encouraging, you know, with the market in a nice uptrend here and NASDAQ breaking out and S &P at new highs. It's good to see a good blue chip name like FedEx getting close to highs here, building the building the right side of a base.

19:36So I just wanted to throw in a good liquid blue chip name here, you know, getting close to a breakout area as as well here. So as FedEx gets up close to that recent high, this is just a classic cup base taking shape. FedEx is close to the end of a big belt tightening campaign. It was something like$4 or$5 billion. They have a little more ways to go, but this is a company that's been trending for a while as they've cut a lot of costs. And, yeah, just a nice base taking shape here, showing a little bit of accumulation as the right side of the base takes shape here. So seeing some higher volume gains, yeah, right in that area there.

20:19So a little bit of accumulation as the right side of the base forms here. And, yeah, nice little setup here, relative strength lines sitting up near high. So FedEx is a good blue chip name here to keep an eye on and like the way the setup looks as well.

20:36Ken Shreve:Yeah, and you talked about the cost-cutting campaign. You're seeing a ramp-up in revenue, and then look at that earnings growth. Definitely showing up in the earnings line there, I'd say. Yes, indeed. Yes, indeed. And that started a year or two ago, and I think they maybe have another six months or a year to go. But, yeah, you can see this uptrend has definitely made its way to the bottom line and the top line as well. So doing, executing well and yeah, looking pretty good here. On the verge of a breakout and you like to see a lot of bases setting up here with the market in an uptrend. So a lot of stocks that have broken out and holding gains, you know, after breakouts, we like to see that and stocks setting up and on the cusp of breaking out as well.

21:25So things looking pretty good here.

21:28Ken Shreve:All right. Well, Ken, we always have fun together talking about earnings reactions. Let's go to applied materials. AMAT down 3.5%. It's hitting resistance and it has been hitting resistance at its 50-day moving average. So needs to conquer that in order to start forming more of the right side of the base. But what are your thoughts on the reaction here? Yeah, I mean, this is the same industry group as ASML. You know, we're talking, you know, still a mixed bag in this chip equipment group. Obviously, Applied Materials is a big, big bellwether in the chip equipment group. So it's not all, you know, not all great news in the chip equipment group.

22:17So Applied Materials, this has been getting resistance at the 50-day moving average for a few weeks now. So, got turned away big time today ahead of the report and under some pressure here. So, we'll see if it spills over into the group. I mean, two completely different technical pictures here between AMAT and ASML. I think we – did we look at Teradyne yesterday on the SMT video? I think we did. We recently did. You know, Teradyne is another much better performing stock. I'd put this in the same vein as ASML, right? A stock that has moved above the 50-day moving average, has cleared some key resistance levels.

23:02So definitely a mixed bag. Some of your real liquid names like AMAT that we just looked at that reported earnings and some of your widely held names are having more problems. Some of your lesser-known names like a Teradyne, ASML are performing much better here. So AMAT under pressure after earnings, pretty quiet in after hours in terms of earnings today. But AMAT is under some pressure here and we'll have to see what they said about their outlook. But a stock, you know, clearly has been lagging in the group recently. Mm-hmm.

23:41Ken Shreve:Well, you know, maybe this is just anecdotal, Ken, but it seems like some of the stocks that had the explosive, almost more climactic moves into the June timeframe have been more of the ones struggling to come back. I guess, you know, kind of that pendulum, momentum swing kind of vibe there. Again, maybe just anecdotal, but it does seem like some of the hottest high-octane names on the way up have been more of the strugglers on the way back. Let's take a look at like another 800-pound gorilla, which would be like a Lamb Research LRCX. Kind of a similar thing. That one is kind of trying to get above the, a little better than AMAT, but still kind of right at the 50-day, trying to get above it.

24:40And then KLAC is another giant, KLAC. Yeah, that looks a lot like AMAT hasn't even, you know, gotten up to the, so there, you know, some of the big, you know, the widely held names are struggling. So I still think, you know, ASML and TER are some of the, you know, the names that you want to keep an eye on that still have an opportunity to, you know, lead in this group. And, you know, AEHR that we've been looking at. Now, a name like AEHR, you know, with such a strong move off lows, to see that decline today, I mean, this was as bullish a 4 % decline, I think, as you could ask for, right? I mean, it was just, I mean, this is an explosive two-week rally.

25:33And, you know, I mean, to be down 4%, I mean, it really just looks like a little blip on the daily chart. So I think if you're long AEHR and to see that 4 % decline today, you're not feeling too bad. Yep.

25:48Ken Shreve:All right. Well, Ken, thanks as always. Good stuff. We appreciate it. Thank you. And thanks, everyone, for tuning in. That's it from us for today. We will be back with more tomorrow morning on IBD Live. Investors.com slash IBD Live for all those details. We'll see you there. And then we'll also see you right back here tomorrow to wrap up the week. Thank you.