Nasdaq Hits High, But Note This Split; Google, Apple, AppLovin In Focus

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0:25Ed Carson:Good afternoon, everyone, and welcome to Stock Market Today for Friday, August 8th. It's Alyssa Coram here. And what a snapback this week, the Nasdaq back at new highs. We've got a lot to take a look at. And joining me now to discuss the action this week, and we've also got a lot of stocks to check in on, is my colleague Ed Carson. Ed, what do you have for us today? Yeah, we'll look at a number of stocks, but we'll take a look at Google, Apple, and AppleVen among them. Okay, sounds like a plan. And we will do that. But first, let's take a closer look at the major indexes and the action that unfolded this week.

1:00Ed Carson:So starting with Friday's action for the NASDAQ composite, the tech heavy index up 1 % by sessions closed. So a closing high here. Did we hit an all-time high again, Ed? I believe we did. All right. Good stuff there. So sorry, the S &P 500, meanwhile, up 0.8 % on Friday. Not quite there, but still a lot of progress after the damage that we saw late in the prior week. Meanwhile, the Dow up 0.5 % on the session. The Russell 2000 with a small gain up about 0.1%. So definitely a tech-led day, tech-led week here, Ed. Taking a look at the weekly action, again, what a snapback. With that downside reversal off highs last week, we were expecting potentially more weakness, but we know this is a very news-driven market and a lot of big earnings movers this week, but just a lot of big cap tech movers as well.

2:01Yeah, there were some positive earnings, like some big names like Palantir and AppLove and Shopify helping the NASDAQ. And then there was some tariff news and other news that lifted chips. I mean, you know, there was a lot of positive news for AI hardware. So those sectors are doing really well. And you look at this. Yes, just it was a steady bounce. On Monday, there was the market had a real broad advance on Monday. It's a snapback. It really bounced back. And the Nasdaq just kept on going. But S &P as well, to a lesser extent. So but again, that was it's somewhat concentrated. The Dow did OK.

2:36And keep in mind is that Apple had a huge week. NVIDIA also is in the Dow. So the Dow still has some pretty big names in there. This was probably Apple's best week in a year at least. I'm not sure. I didn't do the math, but I just was looking. Wait a second. It's a 13 % gain. That's a pretty big move for the Dow in there. So those things were going on. But underneath the surface, there was a little bit of after Monday, Tuesday, there was a little bit of sideways action, a little bit of resistance. I don't want to make too much of it. But, you know, RSP, it's like just it sort of popped. And then we sort of just went flat.

3:10And again, there's nothing wrong with this. You can build handles this way. So it's not like, oh, no, the sky's falling. It's just that maybe the market isn't quite as strong as the NASDAQ would tell you. QQEW is unusually because that was actually down for the last couple of days, hit resistance. It's really testing the 50-day line. And so, yeah, if it broke the 50-day line undercut the lows of last week, I think that would be concerning. Right now, it's not so much. It's just something to note that there's divergence going on. But look, obviously, a lot of things are going right with the NASDAQ at record highs, too.

3:48Ed Carson:Absolutely. And so RSP, QQE, W, those two equal-weighted ETFs, we like checking in on those as a signal for breadth in the market. But something I found interesting that Chris Gessel said on IBD Live this morning is if you look at past strong market rallies in the last couple of years, we sort of had the same issues. So it can be a matter of just finding where that strength is. Perhaps it does make active trading a little bit more difficult if you're not seeing a ton of stocks cooperating and looking as strong as the indexes look. But it does seem like when we're running our screens, there are plenty of stocks that are compelling out there.

4:31Ed Carson:It's not just isolated to your mega cap techs. Yeah, it is. It is a strange kind of there's a lot of positives to it. There are a lot of stocks that are still showing strength. A lot of the big movers, there's a lot of big earnings movers this week, too. So it feels like a unusually large number of stocks were up 10, 15, 20 percent or down 10, 15, 20 percent or stocks that jumped up 10, 15 percent and then wiped out the gains or vice versa. It did feel like earning. So it's definitely a lesson to investors not to jump into stocks at the first moment. But, yeah, there's still a lot of things that are still working well.

5:11and one issue is that you do try to avoid being too concentrated into just a few names because that could set up if the market has a sell-off in say AI names or the mega caps that could be an issue so do try to find that diversity of leadership even though the market rally is

5:27Ed Carson:somewhat concentrated right and two areas of interest two sectors that you mentioned software and chips. So let's take a closer look at those. Here's the IGV ETF representing software. If you take a look at the week's action, up about nine-tenths of a percent off highs. And it seems like for the last couple of weeks as a whole, this sector mostly keeping pace with the S &P 500. But Ed, it sounds like you're seeing some interesting names underneath the surface here. Well, I mean, Palantir is the biggest name in IGV now. And that one had a really strong move. That had earnings That's really extended.

6:03So that helped. AppLovin is in that ETF. Big move there. Oracle is one of the bigger names. Not a big move, but it rose. But there were definitely a lot of losers in this sector, too. I mean, especially in the way there was ServiceNow, Twilio, Salesforce, Fortinet. Fortinet had earnings. Twilio did, too. So there was a lot of weakness in this sector, too. So it's just something out there. So I think IGV maybe overstates the strength of the sector, given how well Palantir has been doing and a few other names. So that's just one area that's, for whatever reason, has just fallen a little bit out of favor.

6:47Again, boo-hoo. It's just a couple of percentage points off all-time highs. I don't want, again, I sometimes look at the glass half empty, but there's a lot of reasons to look at this half full. Yeah.

6:58Ed Carson:Well, as active investors, luckily, a lot of us do like having somewhat concentrated portfolios. And Ed, we do like to say how important it is to really try to find the leaders in the group. That's not going to prevent investors getting caught in every or any gap downs on earnings, right? It happens to the best of us. But if you are continually trying to adjust your portfolio and find those leaders in a sector versus, hey, I need software exposure. What's kind of near a buy point right now? If there's other stocks that are looking stronger, just trying to make that assessment and try to get in the leaders.

7:38Ed Carson:Of course, ideally at proper entries for those, but something to think about with the portfolio management there as well. Yeah, and I do think that you need to be into the market. like this is why you try to get into market rallies early. Like, you know, once we've had a follow through day and you see those stocks moving out, those early leaders can often be the big leaders of the rally. And the opportunities, you know, can sometimes, you know, there have been a follow on opportunities for Palantir and some of the other names, but it just can become a little trickier. So just make sure to be looking for those correct spots along the way and try to get in there.

8:10If you're aggressive, you know, in a sound way early on, that can make things a lot easier if things just keep on running.

8:18Ed Carson:Yeah, and leadership can shift in a group, right? And we'll take a look at a couple of names this week that presented some actionable opportunities. A couple more ETFs to check in on, though. First, here's a look at SMH representing the chip sector, up about 0.8 % on Friday for the week, up 3.4%. So that's a pretty good move here. Yeah, there's a lot of strength in chips, a lot of positive news for chips. And this is doing quite well. There's individual names, a few that flashed by signals, but you could have probably used, you know, this is probably one way to get into it. If some of the other names are too extended, this is one way to play the chip sector.

9:00Ed Carson:And XLI Industrials, let's check in there. What are you seeing here, Ed? It's just sort of like the Dow or the Russell. It's just some names are just pausing right here. I mean, this is fine. They're not. But after that gap pop up on Monday, it's just moving sideways. I think we're seeing something similar with XLF as well. XLF. We'll go over there. Yep. So, yeah, not as impressive of a recovery. And got hit a little harder last week. It did. And so there's definitely some names in there that, you know, it's, you know, and Berkshire didn't help this week. There are definitely some names that got hit this week that are in this group.

9:41but so a lot of sideways there was a lot of the areas where it went up monday and then we went

9:45Ed Carson:sort of sideways and one more to check in on which we haven't in a while and that's the home builders xhb still trying to recover off lows here but it looks like it was a pretty good week for the home builders up 4.2 percent so making some progress after a lot of time sitting out Yeah, we'll see if that goes. I mean, there's growing expectations for rate cuts, which might, and not necessarily, but might help on mortgage rates, longer term rates. And it's obviously been down so far, but it's just something to note. Is this a sector that might come up? A lot of stocks still need work. A lot of stocks in this group, they tend to follow, they tend to track each other pretty closely, honestly.

10:30So a lot of them have been coming up through their 200-day line. So that could be something that investors look at. is this a sector that comes on? But obviously it's been lagging for a while. But this is a group that can be the worst group out of 197 and then be the best the next year. It really can go. It did do that a few years ago, whereas the best and then the worst. So it's definitely something that investors should be just checking out to see if they want to take part in that.

10:59Ed Carson:Yeah, some rotation percolating here potentially. So we'll keep an eye on that. If your organization isn't managing its data with Everpure, then it's likely scattered all over the place. My lord, for three days have I ridden to bring thee warning. The records thy great AI machine requires are strewn across five kingdoms. Yeah. The Everpure data management platform unifies data so you can always find it. No messenger needed. No more running around. Get out of the data dark ages with Everpure, a new era in data management. All right, let's take a look at some stocks, Ed, starting with Google breaking out over the 200 level, a handle entry, which you've been great about pointing out.

11:47Ed Carson:We do have an official handle on the weekly chart here. So Google starting to outperform the S &P in recent weeks, it looks like. Yeah, when it cleared the daily handle, which looks like a three weeks out on the weekly, but it's like the world strength line really hadn't made any progress. Let's be clear. It was pretty laggard. And so, you know, that can sometimes, you know, it's not slow growing, but not as fast growing. And sometimes that can happen and that sometimes, you know, goes, but it's picked up and the relative strength line has definitely made progress since there. strong growth, you know, strong growth still continues on the earning side.

12:25Just it was just nice action. This is also one that's not as volatile as a lower ATR. It's just something, you know, this is probably not going to be probably the number one stock in the S &P 500, but it's making a nice move here. It was joined leaderboard swing trader and it was our stock of the day. So definitely, definitely worth looking at here. Again, I think people get worried about it more than the other hyperscalers. Will AI and chatbots destroy their business? Even though people like their AI chatbots, but they still think it's at risk. But to be honest, it hasn't happened yet. Let's just put it that way.

13:02Their search business is doing well, and their cloud business, helped by AI, is doing well, too. So I think that's one reason there's been some skittishness about that. Maybe that's fading a little.

13:12Ed Carson:Yeah, all good things to point out. So a lower average true range, which you mentioned, a little less volatility there. All the big volume spikes we are seeing on the weekly since the April timeframe are to the upside. So seeing some signs of accumulation there. And if there are concerns about breadth and if QQQ versus QQEW, hey, this is one of those mega cap names, Ed. Yeah, and most other names are out of position. Let's be clear. And if you're not doing like some kind of ETF for the, you know, like either doing the Qs or something even more concentrated, this is one of the names that's actually in range.

13:52Ed Carson:Okay. Well, we'll have to see if the momentum can continue. Prior high from February is$2.07.05. Shares closed this week at$2.0144. Let's check out another mega cap name, which you mentioned earlier. Apple. best week in quite a while here, Ed, up 13%, retaking a key long-term moving average. So is Apple back? Yeah, I mean, look, it was a game-changing week. Now, is it just resetting things and like, and now things will normalize? But essentially, it seems like Apple is going to be able to avoid tariffs or at least significant tariffs on the iPhone. And, you know, for a while was looking like, boy, wherever they went, China, India, it was going to be huge tariffs.

14:41And so that is a huge headwind taken off. Earnings estimates are creeping up a little bit. They had a pretty strong report. They did pretty well in China this last quarter. It's not stellar. When I talked about Google slowing down a little bit, Apple's even more so. And so there's a lot of things here. Not only did it cross the 200-day line today, but it also, you could say you could draw a trend line. So I just sort of feel more like this would be if you were interested in getting into something like this, this might be the kind of place to do it either here or wait for a few days, see if it forms some kind of handle or pauses around here rather than wait till it gets to the high because it's sort of like me running at my age.

15:19It's like if I run up to the top of that hill, I'm not running any further.

15:23Ed Carson:So this can be a bit of a sleepy stock. So looking at a longer-term moving average does seem like a compelling strategy for something. That would be the thing. Again, it doesn't have to be, and it may not work, but that would be something. I just wanted to bring this one because it was such a big mover. It was clearly the biggest mover on the Dow, I think, and a big factor in the market. Yeah, a big factor in the market this week, no doubt. We'll definitely keep tabs on it. So the tariff issue, at least for now, resolved, it seems like next, what investors are going to be focused on, usually in the September timeframe, right?

15:59Ed Carson:right, Ed, is when we get some product announcements for Apple. And so I think one of the issues that investors and analysts alike have been questioning is Apple's AI strategy. Can they pick up the pace with that? Because it seems like they're a little bit behind versus some of their mega cap peers. Yeah, I think that's definitely a big, big issue. And, you know, because it's like they really need to provide that driver because everybody else is doing it and their competitors, especially in China are doing a lot. And just more like the relative strength. The relative strength actually undercut.

16:33It was like a three or four year low up until this last week. So it's really, really was getting down there. So on the ropes, on the ropes, it's bouncing back. But yes, I think AI is a huge issue. And will they have to buy somebody do that? Some people are saying they should buy Perplexity or one of these other AI startups, because they haven't been able to do it on their own, or they haven't made the partnerships to make it work. So yeah, that's a that's a big, big factor going forward.

16:59Ed Carson:And Meta is poaching their talent, right? Well, when you provide those kind of salaries,$100 million salaries, it's hard not to be poached. Yeah, exactly. All right. Let's move on. You also mentioned App, which is App 11, a standout in the software sector this week with an impressive earnings reaction, full disclosure, I do own this one as of yesterday, crossed the 400 level and then broke out above the 428, 429 area. Lots of volume coming into this one. Acceleration of growth and triple digit growth, another quarter of triple digit growth on the bottom line. Yeah. So really strong growth. And I think there's some discrepancy on the numbers just because of but that earnings growth is basically in line.

17:49The sales worth might not be as much because they've done some sales. And so there's certain things that are messing with a bit strong. If you look on a weekly, yeah, it's not at all time highs, but except for that one last spike, we're at sort of there. So there's not too much overhead resistance anymore. I mean, I just sort of like there's some, there's some people who bought up there who might still want it, but most people are there. I think this one is on an intraday chart was really important. This is why you want to have watchlist ready and you want to be engaged because, okay, It started off and up, and actually the prior night, it was down at 1.67%.

18:23And it was like, but it opened higher, sold off. So I was like, oh, this is not so great. Not so great. So that would not be. But then it picked up, and it's right at that 400 level. And that's when it's very quickly. So if you had alerts set, if you were paying attention, there were opportunities to buy it 400, 405, 4010. And believe me, it was moving very quickly to do that. And even when you bought it, that high is there. It was still fine. because it was in the buy zone. But this is why you want to try to be paying attention. Wait a few minutes. You know, in this case, it worked out no matter what.

18:59But you just, you want to be engaged and ready so you can pounce and get the best entry possible because you didn't know, like, this one easily could have fallen 5 % today. And if you bought it 400, you're much safer than some of the other, than buying at the traditional buy point.

19:14Ed Carson:Exactly. And in terms of being ready, IABD Live, of course, we're covering the action in real time. But also, Ed, I know in your coverage, you're really great about pointing out stocks that are setting up with earnings due, along with the rest of the staff. But I always like how you help us get prepared for the trading day ahead. So that's another thing. Whether you're screening for stocks, looking for setups, or looking at our coverage at investors.com, we're trying to stay in step with the market and help you keep your eyes peeled. Because, I mean, there are a lot of earnings reports in a very short time, right?

19:56Ed Carson:And it felt like, well, last week was supposed to be the really big high-profile week. But this week, there was just as much, if not more, that was really interesting and moving big. I think there's more for like growth investors because there's so many of these names, individual names. And so maybe some of the mega caps are out of the way. Right. But yeah, and I will say, yeah, this happened on IBD Live when I was hosting IBD Live on Thursday. And I noticed that it was just going so quickly. But even if I hadn't seen it, the audience was paying attention. The audience often gives us a lot of great thing.

20:28No, no, it's like this is moving. It's like this is breaking out. I saw people saying that Google's breaking out. It's like, oh, yeah, I guess it is today. And so that audience is really helpful as well.

20:38Ed Carson:They sure are. Okay. We've got a lot of other stocks to get to. So how about sort of a lightning type moded? Is that what you're envisioning here? That's really it. Okay. Just to give us a little bit more color of what we saw go down as the week progressed, here's a look at chip equipment maker Lamb Research, which had earnings a little while Goat, July 30th, and now bouncing back this week up almost 6%. So a strong comeback. Yeah. So it bounced off the note. So the earnest reaction wasn't great, but there were pretty good numbers. It was pretty good guidance. There were some reasons why it fell, but it rebounded.

21:18It cleared most of this little consolidation. You could treat that consolidation as a handle to like a 13-month consolidation as well. Either way, there's lots of little reasons and lots of reasons why you could have bought a 10-week trend line or just within the handle. So again, you could have bought SMH, but this is a chip name that was actually in range. It is involved in AI like almost every other chip play, but strong accelerating growth. So that's another thing that's really nice to see.