Nasdaq Fades After Strong Start: Lam Research, Applovin, FIX In Focus

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0:25Ken Shreve:good afternoon everyone and welcome to stock market today for thursday august 7th it's alissa quorum here and we saw the nasdaq fading after a strong start it did still close in the green but joining me now to provide all the context we need to know about today's trading session is my colleague, Ken Shreve. Ken, good to see you as always. You too, Ali. Yeah, we did get some buying late in the session, so we'll take it. So not a bad day at all. I want to take a look at three stocks in the Chip Equipment Group, LAM Research, LRCX, showing some good action around its 10-week moving average. Also, nice earnings report from AppLovin, APP.

1:06This has been off the radar for a little while, but big move for that stock today. And then Comfort Systems, FIX, HVAC, heating, ventilation, all that good stuff.

1:18Ken Shreve:Yeah, and kind of an AI play. Yeah, perhaps. Had that too. All right, we'll take a look at those stocks. But first, a closer look at the major indexes. The NASDAQ up almost four-tenths of a percent on the day. Meanwhile, the S &P 500 down a little less than one-tenth of a percent. You can see a little downside reversal there. The Dow also in the red down a half a percent. The Russell 2000 also on pace for a decline of about a half a percent headed into the final stretch of the session. So the Nasdaq leading today, Ken, I think we've been very impressed by the snapback this week. So I think the fact that we haven't hit new highs yet is not a big deal here.

2:08Ken Shreve:Because if you take a look at just how far we've come from Friday's close, we've still come a long way, even though we faded today. Yes, yes, we did. And I remember yesterday's SMT video, we did note some of these downside reversals that the NASDAQ has experienced in recent days. And at one point today, you had another red bar for the NASDAQ, and it looked like it was going to reverse lower again. But it didn't. So even though we've got a close in the bottom half of its range, you can see looking at an intraday chart, you can see some buyers once again coming in and lifting the index off lows quite a bit.

2:49So I think the message here is that even though the NASDAQ may be looking a little wobbly near highs, the uptrend is still very much intact here.

2:58Ken Shreve:Yeah, it seems like that 21 ,400 level thereabouts, it's where we hit resistance very close to that prior high. So we'll have to see if we can conquer that level. But at the very least, we are holding above the 21-day line. So we'd like to see that this week. Yeah, and the break of the 21-day line almost a week ago last Friday was a bit disconcerting. But again, that price action the very next day when the NASDAQ gapped up above basically all of its short-term moving averages did a lot to rectify that bad day on Friday. So, again, that 21-day line, as our senior market strategist Mike Webster likes to point out, it's a key support level, not only for an individual stock, but for the indexes as well.

3:47So as long as we're holding above that green line, I think we're looking pretty good here.

3:52Ken Shreve:So an inside week so far, but putting in some repair work, when you do get that downside reversal action off highs, especially on a weekly basis, it wouldn't have been surprising to see more of a test of that 10-week moving average. We're not getting that just yet. We're not. And I think we have a really good earnings season to thank for that. There have been some gold mines and plenty of landmines as well. But I think overall, you have to look at the second quarter earnings season and say it's done a pretty good job of buoying this market. I think some really top quality institutional names have been reporting solid results.

4:35And again, some blowups along the way. But I think generally it's been better than expected.

4:42Ken Shreve:Yeah, no doubt. Let's take a look at the other major indexes. Here's the S &P, Ken. S &P 500, minor decline, again, closed in the bottom half of its range. Looks like volume was light, maybe a little bit higher on the NASDAQ, but definitely lower on the S &P 500. But, you know, still battling here, holding the 21-day line. So another index that's done a pretty good job recovering from Friday's sell-off. And here's the Dow, an outside day downside reversal. What should we make of it, if anything, Ken? Well, I think for now, the Dow, as long as it's holding above the 50-day moving average, obviously getting some resistance today.

5:25It tried to poke above its 10-day moving average there after three days of relatively tight trading. But some volatility today, but a little close below the 44 ,000 level, as long as it's holding the 50-day line. The Dow Jones made a sharp drop to the 50-day line last Friday, closed off lows and up near its highs. So that looks like a pretty key support level to watch here.

5:49Ken Shreve:And here's a look at small caps similar to blue chips. Yeah, 2200, good round number. It came down close to 2200 today. This is also an outside day for the Wrestle 2000, just like the Dow. Now, if it does break below 2200, which would coincide with a break below, looks like Tuesday's low there, maybe it comes in and tests that converged 50-day and 200-day line. But as we've said, the Russell 2000 and the Dow are the lagging indexes at this point. Much of the strength in the market is in tech stocks, NASDAQ and the S &P 500. One ETF to check on before we pivot to our stocks of note today. Here's a look at the SMH ETF representing the chip sector outperforming today of 1.6%.

6:41Ken Shreve:I'm Laura Thurow with Baird Private Wealth Management. You've been doing all the right things, saving, investing, building toward your goals. Healthcare can be a major expense today and an even greater one over time. Tools like long-term care insurance or a smart health savings account strategy can help protect what you've worked so hard to build. Learn more at bairdwealth.com slash WSJ guidebook. Lots of headlines in the semiconductor sector today. First of all, President Trump threatened 100 percent tariffs for chip imports unless these companies start making at least some of their chips in the U.S.

7:28So that was one headline. And then you also had President Trump earlier today in the morning on Truth Social calling for the firing of Intel's CEO, who was recently hired to replace Pat Gelsinger. I never get the last name, but he's a new CEO. But he has some ties to China that President Trump is concerned about. He called for the firing of Intel's CEO. So Intel down 3%. Didn't have too much of an effect on the SMH today.

8:04Ken Shreve:And you were right with your instinct there, Ken. It is Pat or was Pat Gelsinger. Gelsinger, yeah. I must have said Pat Gelsinger. ER, Gelsinger. Got it. All right. Well, speaking of chip stocks, let's take a look at chip equipment maker, LAM Research, LRCX, the ticker here, up 3.4%. Earnings came out last week, sent the stock down to its 50-day line. But overall, a pretty orderly pullback for the stock. And then just to zoom out a little bit, putting the recent action in context, we had a low in the April timeframe around 56. The stock made it all the way up to 102 a couple of weeks ago. So a really impressive rally off flows, orally pullback, and now bouncing.

8:52Yeah, I think this setup looks quite interesting, actually. It came close up to the 100 level today. You had a nice breakout over that 86.04 entry a few months back late around the summertime. But if we look at the weekly chart here, this weekly chart has a really nice look to it. Really strong move after that move above the 60 level went up close to 100. Now it's just pulling back in very orderly fashion to the 10-week moving average. So to me, for people looking to put money to work, we've been talking about how with the market running for as long as it has, it's been getting harder to find stocks that aren't extended too far past proper entry points.

9:38But I think Lamb Research is in a good setup here. Arguably a turnaround story. You can see earnings and sales have picked up the pace in recent quarters. You're going to start to slow down a little bit in coming quarters, but bottom line and top line growth has been there. So off the 10-week moving average here, finding support, I think it looks pretty good.

10:01Ken Shreve:Yeah. So it's trading about 3.6 % above the 10-week just for added perspective there from a risk management standpoint. Moving on, let's take a look at ticker APP. This is app loving in the enterprise software space. Finished the day up 12%, a breakout on earnings, Ken. And full disclosure, I did pick up some shares here. We saw another quarter of triple digit bottom line growth, marking acceleration, and strong top line growth revenue up 77%. That also was an acceleration from the prior quarter. Yeah, they operate a software platform that basically helps these people developing apps, helps them monetize and market their apps.

10:46A very interesting business here. And the growth has been here for many quarters in a row. You mentioned the June-ended quarter growth accelerated from Q1, the bottom line up 153%, the top line up 77%. So you can see nice accelerating growth here. And I have to say, this is a breakout that held very well all day. You know, you look at the five-minute chart, again, you know, really, really strong move. And then it just kind of, you know, moved back and forth, but managed a pretty decent close in the top half of its range. This one's back on our radar. It had fallen off our radar because while a lot of stocks were moving, this one was just kind of, you know, flagging around its 50-day moving average.

11:33It had really been lagging the market despite top fundamentals. But good breakout today, and the breakout held very well.

11:42Ken Shreve:That it did. Closing range of 76%. So a finish high in the range there. And last but not least, let's go to Fix Comfort Systems. A great move on earnings a couple of weeks ago with the stock up 22 % on the day, 725. and it's gone really tight ever since then, Ken. That's definitely a signal of strength here. Yeah, provides, you can see the company description, heating, ventilation, air conditioning services, also known for cooling services, just like Vertiv, VRT. So Comfort Systems is also involved in these data centers that run very, very, very, very hot. They supply a cooling system. So another stock that is really in the sweet spot of growth here.

12:31You see that big earnings move and just love how the stock is really moving sideways and holding on to these gains. You can see what five days ago a stock tried to fall. It closed all the way up near its high on that day. And now it's just trading very, very tightly at the 10-day moving average. Check out the weekly chart and you see this explosive weekly gain on earnings. And, you know, we like it when a stock trades tightly after a breakout. So this has the look of possibly a three weeks tight pattern taking shape where the closes, the close for this week and the close for last week, very close to the prior week.

13:12So really holding gains well, showing strength and support here. Very bullish relative strength line. Another solid name here. People who think, well, I missed it when it surged a couple of weeks ago. So Comfort System is telling people that this is, you know, the buyers are really showing strength and support here. Could see an alternate entry sooner rather than later.

13:35Ken Shreve:Yeah, could offer another chance. Yep, indeed. We'll have to see. All right, Ken. Thank you so much. Anything else as we wrap? And we'll close out another week. Let's take a look at a couple of earnings reports. It's, you know, DraftKings had a really good number yesterday. Take a look at Flutter. This is the parent of FanDuel. Not sure if Flutter has reported yet, but they're going to take a look at earnings from them. Also, Pinterest is reporting after the close. Rocket Lab. So lots of earnings reports to take a look at. And let's go to Rocket Lab. I'm not seeing a ton of movement just yet. No, no.

14:19Nope. So they may not have reported yet. Sezzle, another interesting one, S-E-Z-L. This is buy now, pay later. Fell sharply yesterday when Dave sold off on earnings. So maybe these haven't reported results yet, but several other top rated growth stocks set to report. So we'll have plenty to talk about tomorrow.

14:42Ken Shreve:Absolutely. Pinterest was another one you mentioned. And then the first one was Flutter. Flutter. entertainment yeah not seeing a lot of action here just yet after hours how about carmen krmn in the aerospace and defense group that one's not moving uh either so lower we're seeing fractional gains and losses fractional gains and losses a little surprising report yeah so uh but these are some names uh we'll be watching and i'm sure we'll be getting discussion on ibd live in the morning. No doubt. All right. Thanks once again, Ken. We appreciate it. And speaking of IABD Live, that's where we'll see you in the morning starting 10 minutes before the opening bell.

15:26Ken Shreve:Investors.com slash IABD Live for all the details on our daily morning live stream. It's Friday, so we're going to be joined by another special guest. Mike Lamott returns to the show. He's with Minervini Private Access. So looking forward to getting his take on the market and stocks to watch. We'll see you there, everyone. And then we'll see you right back here on Friday after the close to wrap up the week.

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