Nasdaq Hits New High After U.S. Extends Iran Ceasefire; TSMC, Q, AXSM In Focus

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0:25Ken Shreve:good afternoon everyone and welcome to stock market today for wednesday april 22nd it's alissa corham here and another day of bullish gains for the stock market we are going to dig into that and take a look at some stocks to watch joining me now is my colleague ken shreve ken what do you have for us? Chip stocks. Allie, want to take a look at one chip stock that broke out today, Taiwan Semiconductor Manufacturing, TSM. Also want to take a look at a name that I don't think we've looked at on stock market today yet. A spinoff from DuPont late last year in the chip equipment group, ticker symbol Q, CUNITY Electronics.

1:09And then a biotech that looks interesting here, Axome, A-X-S-M.

1:15Ken Shreve:Yeah, the chip sector looking mighty fine and biotech's interesting as well. So looking forward to your thoughts on those stocks. First, let's take a closer look at the major indexes. So after Tuesday's downside reversal off highs, what do we get? we get a new high and a strong gain here for the Nasdaq, up 1.6%. Meanwhile, the S &P 500 was up 1 % on the day. The Dow was up some 0.6 % and the Russell 2000 up 0.7%. But a notable gain here, I think especially for the Nasdaq composite with IED's market school rules, that downside reversal off highs that we had yesterday, one might expect a little bit more of a pullback, more weakness after that.

2:08Ken Shreve:But with the news-driven nature of the market, Ken, and the extension of the ceasefire, we are back in action with a big gain and crossing above that downside reversal. So we have a downside reversal buyback rule, basically just underscoring the strength that we're seeing in this market and bullish signal after bullish signal, even getting a downside reversal off highs is not leading to more weakness, Ken. Yeah, it was a downside reversal yesterday in higher volume, and it ended up being the first distribution day for the market since the April 8th follow-through day for the S &P 500. But yeah, I mean, the NASDAQ responded quite well today.

2:54It ended up being a lower volume gain for the NASDAQ, but a close near highs, an all-time closing high for the NASDAQ. And another day of just great, great action in individual growth stocks. I could complain about the breadth. It was less than two to one positive. So I think we can complain about breadth a little bit, but would have liked to see breadth maybe better than 2 to 1, maybe 3 to 1, 4 to 1 positive today. So not great breadth, but still a lot of action in good action in growth stocks. We're going to take a look at another breakout in the chip space today. Semiconductor stocks continue to do very well.

3:44So looking at the RSP, the NYSE breadth was particularly weak today because the S &P had a nice percentage gain, not as good as the NASDAQ today. But, you know, still a 1 % gain for the S &P 500, yet advancing stocks on the NASDAQ only had just a very slight edge over decliners. And you can see that in the RSP equal weight ETF that was actually flat on the day, actually a little bit lower on the day. So, again, breadth on the NYSE, just barely, barely positive. So would have expected that to be a little better on the NYSE. But again, you know, there was a lot of good action underneath the surface in individual growth stocks.

4:35And we have seen that for, you know, ever. Basically, we were seeing that before the follow through day. We saw that, you know, on the follow through day, growth stocks have been just humming along here. And for growth investors and for IBD's methodology, it's just really been a great time for stock picking for sure.

4:56Ken Shreve:Exactly. On IBD Live this morning, you were saying that it's a special time in the market. Can you expand on that a little bit? This has been quite a move that we've seen. And there are a lot of stocks that are right up our alley, right? Right. Right in the thick of what we like to see from a fundamental and technical perspective that are performing pretty fabulously. Yeah, yeah. And, you know, we've all been working here a long time, and we've been through a lot of bull markets and bear markets, you know, 25 years plus. And, you know, again, we've been through all different types of markets. I started with IBD back in the mid to late 90s.

5:45So I was there when tech stocks were roaring in the mid to late 90s. and I saw the tech bubble burst in 2000. So I've seen a lot of different markets. But yeah, this follow-through day that we saw earlier in the month was particularly powerful. We've seen a lot of growth stocks really, really taking off. And it's common to see stocks breaking out on or around a follow-through day. And it's also common to see stocks breaking out after a follow-through day. And it's, you know, you can see stocks breaking out weeks after a follow through day. So it's encouraging to see, you know, strong action that we've seen post post follow through day.

6:29But yeah, we've seen we've seen some great action in the leaderboard model portfolio. We've got, you know, 14 or 15 stocks on there. Many have been added during the month of April. And we're, you know, continuing to see some really, you know, strong action post, you know, post-breakout. So the percentage gains, you know, sometimes I think in our own individual portfolios, when you see, you know, just stratospheric moves. I mean, I'm looking at, you know, SMH, for example, when you see the move in semiconductors. Yeah. And, you know, you see gains like this. I think it's human nature to almost get defensive and you say, well, I made really easy money.

7:16And when you make easy money in the market, sometimes the market can take it away from you very, very quickly. But power trends or big gains in the market, if the market rally is very, very strong, it can often keep going. So you have to trust the uptrend. And I think we're in that situation now. And, you know, until we start to see meaningful signs of distribution, I think you can stick with the leaders, stick with the stocks that are working. And, you know, until you start to see sell signals or you start to see kind of chinks in the market's armor, there's no real reason to, you know, get nervous or get defensive here.

8:03You just have to respect the uptrend. All right, let's get quick thoughts on the Dow and the Russell.

8:10Ken Shreve:So we'll start with blue chips. Blue chips, you know, not rallying as strong as the NASDAQ, but this has been a really nice move off lows for the Dow as well. Still not in all-time high territory, but it moved nicely above the 50-day moving average. And it is, you know, holding really well. You know, a down session yesterday for the blue chip index, but it held tight today. And, you know, it's technically the lagging index at this point, but, you know, nice move off lows and holding strong here. And, you know, looks fine. Same with the Russell 2000. This is up near all-time highs and nice, nice rally here, holding firm up near all-time highs.

8:55Yeah.

8:55Ken Shreve:So even though breadth may have been lacking today, overall, in the last couple of weeks, it does seem like the participation has been pretty widespread. Let's also take a quick look, Ken, at oil. I know that this is a factor that a number of sectors are quite sensitive to. So give us an update on where we stand with oil's impact. I would say the market has, you know, you have USL. So, I mean, we clearly have had a three-day rally in oil. I mean, three up days for oil. And you have the indexes holding very strong here. So this is another way the market is kind of shrugging off what might seem to be bad news.

9:41I mean, when the market not that long ago was really freaking out when oil was rallying. So, USO came down close to its 50-day moving average four sessions ago, kind of rallied off lows. and it's rallied for three straight sessions, yet the stock market is at least, you know, the NASDAQ and Russell 2000, S &P 500 are up near all-time highs. So, so far, so good. I don't think the market is, you know, going to like volatile headlines out of Iran and spiking oil prices. And if oil starts to make a material move towards$100 a barrel again, that's probably going to keep the market honest again. So we're going to want to continue to see positive developments out of Iran.

10:24And we'll hope that this ceasefire and talks will continue and we'll continue to see positive developments. But that's still a wild card. And we'll just have to see how the headline flow continues to develop. But if oil can behave itself, you know, that should should be should be good for the for the for the stock market. But, you know, so far, so good. We're a three-day rally. The market's been able to kind of shake it off.

10:54Ken Shreve:Yeah.

11:18Ken Shreve:sponsored job credit at indeed.com slash podcast. Terms and conditions apply. All right. Well, you mentioned the strength in the chip sector. So let's take a look at a breakout from Taiwan Semiconductor today. Shares up 5.3 % volume behind the breakout and a clear cup with handle entry here, Ken. Yeah. And this is just, just goes to my point that several days after the follow through day, you're still seeing stocks. You're still seeing stocks moving here. Now, the issue with Taiwan Semiconductor is, you know, we talk about the relative strength line and, you know, really strong breakouts are going to have a relative strength line with a blue dot, either leading the stock into new high ground or a relative strength line in new highs.

12:03So you can see when this consolidation or when this cup with handle base started forming, when that stock hit a high of 390, you can see where the relative strength line was. It was up near highs. Now the stock is breaking out into new high ground and the relative strength line is lagging. Is it a 100 % deal breaker? It's not a total deal breaker, but this is an example of a stock that's breaking out with a lagging relative strength line. So you typically want to see the relative strength line confirming the stock's strength. So the fact that But TSM, even though this is a fundamental giant, it is a company with outstanding top line and bottom line growth.

12:45You can see what they did when they reported first quarter earnings. Their bottom line was up 63%. Their top line was up 39%. NVIDIA is their biggest customer. Apple is number two. Broadcom, AMD, Qualcomm. they have all the the you know the biggest tech companies as uh as their uh as their customers as the world's largest chip foundry so fundamentals are outstanding this stock has been trending for for many many years uh but you know weekly chart has a has a pretty good looking relative strength line here so you know the market is still serving up uh breakouts here and uh this is a stock that broke out today and the buy point right around, we can go back to the daily chart here, 382.

13:34Around 382. Yeah, 382.16 was the handle buy point here. So, you know, still a stock that is early in the buy range here. And again, you know, the daily and the weekly chart, you know, two slightly different stories here in terms of the relative strength line, slightly lagging on the daily chart here, but the weekly chart does show that relative strength line up near high. So just something to keep in mind. But overall, a really nice move for TSM. And we still look at this stock as an institutional quality name. And good to see volume coming into the stock today. So solid move and encouraged to see a lot of stocks still working, even though we're several days past the follow-through day.

14:23Yeah.

14:25Ken Shreve:And in studying past market cycles, we do see in the days and weeks after the follow through day, in strong uptrends, you'll continue to see those breakouts. Let's pivot to Ticker Q. You mentioned this is a DuPont spinoff here. It's close to an all time high and a buy point from a cut base. this one has not really been appearing in our screens very often partly because of the fact it has a composite rating of of 85 and we don't have a whole lot of fundamentals to go on so it really i don't think it's been appearing in the market surge growth 250 or the ibd 50 but it is an interesting company here it's a tracked in the chip equipment group which is still a top-ranked group in our database, filled with leaders here.

15:18But you can see it's just setting up. They were spun off in November 2025 last year from DuPont. It was basically DuPont's electronics business. But like I said, tracked in the semiconductor equipment group now. And it's setting up in a nice base here right at the top of a little cup base. You can see the relative strength line. You can see the little blue dot there at the end of the relative strength line. So this is sort of the opposite of TSM. Here's a stock that's setting up, not quite in new high ground yet, yet the relative strength line is poking into new high ground. So here's a stock showing some strength.

15:57You can see the annual earnings up on the top left here starting to pick up into growth this year and next. We've got some missing blanks at the bottom and terms of the quarterly numbers here. That can happen with a new issue, but I think this is a company worth paying attention to. Just kind of a new issue, maybe in the early stages of a move here. So we're going to keep an eye on this one and see if it can break out of this little early stage cup base here. But again, DuPont spinoff, chip equipment company, really nice red hot industry group filled with tons of leaders and kind of a new name might be worth following here.

16:43Ken Shreve:Yeah, definitely red hot there. Okay, let's now shift our attention to AXSM, AXM Therapeutics. Also getting close to a cup by point here, Ken, taking a closer look at the daily chart, seeing an upside reversal today, shares up 1.9%. Looks to me like it could be starting to add a handle here, but just a classic example of a cup base setting up here. Stock is back up near highs. It has been losing money, but look at that big estimate for 2027. So this is going to be their last year of sort of red ink. They're going to be turning a big profit in 2027. So this is a company that's all about central nervous system disorders.

17:34They have three marketed drugs right now, one that treats major depressive disorder. They have another drug that treats narcolepsy, which is excessive daytime sleepiness. And they also have a drug that treats migraines. So they are going to be turning their first profit in 2027. and you can see down at the bottom, they've got some top line and bottom line growth here. So a nice base setting up. The relative strength line is still a little bit off highs here, but kind of an interesting company here, again, with three marketed drugs and like the top line growth. And with these new market surge charts, Ali, you can kind of scroll forward and look forward into coming quarters.

18:23You can see there's a pretty good growth runway for this company. So I like the future earnings power here and a stock that is kind of setting up. And in this market, if this uptrend has got more legs, I think this one has a good chance of working based on their future growth prospects here. Also, if you look at the owners and the mutual fund sponsorship, something that we pay attention to, especially in the biotech space, This fund sponsorship has been steadily rising here. You can see it's been increasing in recent quarters. And then in the IBD Mutual Fund Index, we've got three heavy hitter funds in here with a good track record of performance.

19:12So it's got the fund sponsorship. It's got the fundamentals that we like to see. So pretty interesting biotech here. I like the look of the base so far here. So another one that's on breakout watch.

19:27Ken Shreve:Great analysis there, Ken. We appreciate it. Okay, before we go, we do have some stocks to just very quickly rapid fire check in on with earnings out after the closing bell. Let's start with LAM Research in the Chip Equipment Group seeing shares up 3%. This is a stock that has performed very nicely since the follow-through day, Ken. Yeah, beautiful, beautiful breakout for LAM Research. Again, we just looked at ticker Q in the chip equipment group. So we'll see. This is a nice breakout and beautiful, beautiful action post breakout testing that 10-day line. A little, looks like a little shelf here, right?

20:08A little shelf just kind of pausing after the breakout. So we'll see if this is going to try to re-break out again over that recent high here. So nice pre-market or nice post-aftermarket move on earnings for LRCX. And here's Texas Instruments, Chipmaker. Wow.

20:28Ken Shreve:Yeah, up 7.5%. Also up nicely in the after hours on earnings. Here's another stock that recently cleared a cut base, was still in the 5 % buy zone ahead of the report. But it looks like this is going to, well, up 7 % in the aftermarket. We'll see where it opens tomorrow, but it looks like a positive reaction so far. Yeah, so far, a lot of strength, just underscoring the strength in the chip sector here. Let's go to IBM now. this one down over 7%. The relative strength on this has been lagging for a number of months here and below a declining 50-day line. Let's also take a look at Tesla. We know a lot of eyeballs on this one.

21:17Ken Shreve:As of right now, seeing shares up 3.5%, Ken. Yeah, yeah, Tesla had been lagging like IBM, but we'll see. You know, Tesla could try to break out of a downtrend here. Let's look at the daily chart for Tesla because this one had been trying to break out of a downtrend ahead of the report. So we'll see. Yeah, it's been trying to clear that 200-day moving average and trying to break out over that 400 level. So it could be an interesting day for Tesla tomorrow, depending on where it opens. So you can see it trading over 400 again. So it could be an interesting move for Tesla. I think just getting over that ceiling, that 200-day moving average on the 400 level, would be enough to break it out of the downtrend, but still has work to do.

22:04So we'll see how the stock can trade tomorrow.

22:07Ken Shreve:Agreed on all fronts there. Let's round things out with a look at OII. This is Oceaneering in the Oil and Gas Field Services Group shares up a little less than 2 % at the moment. Yeah, stock tried to get going today, closed a little bit off highs. We talked about this one on IBD Live this morning. Kind of a whippy stock prone to volatile swings, but it has been a longtime strong performer in the field services group in the oil and gas sector. So tends not to be very liquid in the after hours session. So it looks like it's trying to move a little bit. So still a breakout candidate. So we'll be watching this one in the morning and wouldn't be surprised to see a trade heavy volume tomorrow.

22:56So will it break out or not? We'll have to keep an eye on it. But again, long-time leader in this group. So we'll see what tomorrow brings.

23:06Ken Shreve:Sounds like a plan. Thanks so much, Ken. Always appreciate chatting with you. My pleasure. And thanks, everyone, for tuning in. That is it from us for today. But we will be back with more tomorrow morning on IEBD Live. Investors.com slash IABD Live for all the details. And in the meantime, make sure you check out this week's Investing with IABD podcast live at 5 p.m. Eastern today with host Justin Nielsen. He's going to be joined by Leif Sarada, a former U.S. investing champion and swing trader, a frequent guest on IABD Live as well. It'll be a great discussion with those two about how to catch a market turn early.

23:49Ken Shreve:So check that out 5 p.m. Eastern on our YouTube channel and wherever you get your podcasts. Also, the episode will be available on demand at investors.com slash videos. See you tomorrow morning on IBD Live, everyone. And then we'll also see you right back here tomorrow after the close.