Nasdaq Hits New High As Growth Stocks Rebound; Raytheon, Rubrik, HLI In Focus

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0:25Ken Shreve:Good afternoon, everyone, and welcome to Stock Market Today for Wednesday, July 9th. It's Alyssa Coram here. And a strong gain for the Nasdaq today, up 1 % as growth stocks rebounded. And joining me now to discuss all the action in today's session is my colleague, Ken Shreve. Ken, what do you have for us? Well, looks like another all-time closing high for the NASDAQ. So this bull market continues to look quite strong. I have three stocks I want to talk about and a couple of ETS, but let's start with Raytheon. That aerospace and defense group is still ranked very high on our industry group rankings.

1:03So RTX. I want to revisit Rubrik, RBRK and the security software group. We talked about this one a couple weeks ago. And then Houlihan Loki, HLI, in the Investment Banking Group. All right.

1:17Ken Shreve:We'll check out those stocks. But first, let's take a closer look at those major indexes. Ken, it seems like we're in this can't-stop, won't-stop market. Just when you think we're going to get some sort of pause or digestion, the weakness has not really materialized other than just that one day, Monday, where we had that down day of nine-tenths of a percent, but back at highs, as you mentioned. Yeah, and let's kind of get a perspective as to where the NASDAQ is in relation to its 50-day line, because it's got to be getting up there again. I think it is. After a really strong uptrend, we always want to just pay attention.

1:59So 7.4%, not crazy. But yeah, Yeah, this is a bull market that continues to work, and we're right on the cusp of second quarter earnings season. So just imagine if we get some pretty decent reports and maybe some good outlooks, maybe that will give us another gear here. But I think a lot of companies are still a little bit uncertain, just like the Fed is. We had the release of the Fed minutes today from the meeting last month, and they showed a Fed that's still a little confused about what to do. I mean, they're kind of wait and see, but some think we should be cutting rates now. Others want to wait and see if inflation.

2:42So there's a little bit of uncertainty at the Fed, but the market does not seem to mind. I think it's comfortable with the way the economy is acting. And I'll tell you, we had a really rough day for growth stocks yesterday, but a lot of them bounced back today. And a big reason why the NASDAQ was able to mark that all-time closing high.

3:06Ken Shreve:Yeah, absolutely. One way to look at that is the FFTY ETF up 1.6 % today after Tuesday's decline of about 1.6%. Exactly the same amount. Yeah. So pretty amazing. But yeah, growth stocks did well today. That was good to see one day after some pretty heavy selling. Right. And I think it's also interesting, Ken, if you, you know, not only the Fed angle that you mentioned, but also the trade war. We're continuing to get more headlines on the trade war front. And it seems like some of those tariff rates that are being announced aren't terribly materially different than what the Trump administration had announced on Liberation Day that caused that sell off.

3:59Ken Shreve:So it seems like as of right now, the market either not worried about the tariff impact, I guess, especially if it's not materializing on the inflation front. Well, there were quite a few tariff headlines yesterday. President Trump said that tariffs on copper imports were going to be 50 percent. That was more than expected. He also said that he's going to put tariffs on pharmaceuticals coming into the U.S. That hasn't happened yet, but he's talking about 200 percent tariffs. Yet you look at the NASDAQ and look at what it did yesterday. It was just an inside day. It traded tight as a button. So price and volume looks about as good as it can look for the NASDAQ and really all of the major stock indexes at this point.

4:52So August 1st is sort of the drop dead deadline here. And I think there's maybe still some hope that some companies are going to come to the negotiating table and maybe work on some more details. But, you know, we've got three weeks for that to happen. But, yeah, the market is optimistic about a lot of different things right now.

5:15Ken Shreve:It sure is. And here's a look at the S &P, not back at new highs just yet, but close to highs, up 0.6 % on the day. Yeah, you had higher volume on the S &P 500 yesterday, but similar to the NASDAQ, it traded in a really, really tight range. So even though volume rose and the index declined, it was not a distribution today. Kind of a low-volume rally today. Didn't get to an all-time high like the NASDAQ composite, but still a picture of technical strength right along with the NASDAQ. Yeah, and here's a look at the Dow. We're still closing in on those all-time highs. Yeah, but a pretty incredible rally after that bounce off the 42 ,000 level.

6:03We were talking about this index was lagging the S &P 500 and the NASDAQ for some time, but you get that bounce off of the 42 ,000 level. We take out 44 ,000, holding above that level now and holding above the 10-day moving average. So this index has come back to life as well, right along with the Russell 2000, which had been lagging quite a bit. So Russell 2000, nice move above the 200-day moving average. Fell on Monday down close to that 2 ,200 level, found support. It's been rallying the past two days. So hard to find anything wrong with the four indexes that we're looking at that we just looked at.

6:47I think complacency is always something you want to pay attention to. I know a lot of people are looking at their portfolios, looking at their 401ks and seeing some good gains, especially those invested in growth stocks. So it doesn't mean you don't want to pay attention. like our leaderboard model portfolio, for example, that Dave Chung and I manage, we're seeing a lot of our stocks hitting that 20%, 25 % profit-taking level. We've taken some gains, but not all, where we really want to give our big leaders room to work. But nothing wrong with playing a little bit of defense, especially if you've got some big gainers.

7:29On the one hand, you want to let your winners run, but if you've got gains that are 20 % from a proper buy point, that is normally the time stocks tend to pause and digest gains. So nothing wrong with trimming some winners. You still want to maintain good exposure to this market because the uptrend is still looking very strong.

7:53Ken Shreve:Yeah, all great thoughts there, Ken. Okay, let's take a look at XLU. What are you seeing here in utilities? Well, I'm seeing an ETF that is close to breaking out of a downtrend here. Utilities had a nice day. This was S &P 500's best performing sector. Gain, not quite 1%, but one of the top holdings here is Vistra, which is a leaderboard stock, VST. This is an independent power producer like AES. AES is not in the top 10 holdings of XLU, but there was some takeover chatter for this independent power producer, so that lifted Vistra in XLU. But I think XLU looks quite strong here, support at the 50-day, and it could try to make a run at that recent high of 83.17.

8:51So we'll see. Of course, the utility sector these days is filled with, obviously, companies that are providing power to all these data centers. So it used to be kind of a very dry industry known for dividends. But, you know, there's some growth stories emerging here.

9:09Ken Shreve:Yeah, a lot of AI plays in the utility space. Okay, let's take a look at Bitcoin. Here's iBit. It looks like it had a lot of strength towards the end of the day here, Ken. Full disclosure, I do own it on the verge of a breakout. Yeah, we have this on the leaderboard portfolio as well. It's taken a little while to get going, but we actually took the opportunity to increase the position today because we just looked at today as a bullish technical move. Volume picked up the pace quite a bit from yesterday. You can see it was actually above average, closed near session highs. And this looks to me like it could try to break out.

9:57So we increased the position a little bit. It's now about, call it a 7%, 8 % weighting thereabouts. But today could have been a setup day. So we'll see if Bitcoin can get up and out of there tomorrow. Definitely looks like a setup day to me. So I thought it was worthwhile to just bump up the position size a little bit.

10:18Ken Shreve:Yeah, totally agree. You know, you had the early entries around the follow through day in mid to late April. That's where I was getting in. Also, the reversal right at the 50 day, a potential opportunity to either enter or add. And then today, clearing a trend line, a setup day just ahead of a potential breakout. Ken, definitely compelling action here in crypto land as of late. Yeah, we put this on June 9th, you know, so we put it on and then it just kind of stalled out, but it didn't really do anything wrong. It just wasn't going in the direction that it wanted to. So we're just now starting to make headway from our entry at 61, but we still acknowledged the ETF's strength today just by bumping up the position a little bit.

11:08And we'll see if this can get up and out of there. But good day today. Yeah.

11:13Ken Shreve:Well, the patience paying off. And with Leaderboard, I know you guys are paying very close attention to entries where you can give a stock room to have support at the 50-day or the 10-week line. And that's exactly what happened here. And The audience can hear more about Leaderboard's trades over Q2 coming up on tomorrow's Scorecard webinar. Isn't that right, Ken? Yeah, we'll get to talk about some of the stocks that we put on or around the April 22nd follow-through day. That's why it ended up being a really good quarter for us. We recognized the follow-through day on April 22nd and started to increase our market exposure.

11:56So, you know, right now we're up around 85 percent invested and have a little room to add some new names, but still very encouraged, you know, by the underlying strength in a lot of stocks in the market here. Yes. I'm Steve Booth, CEO of Baird, an independent wealth, asset management and global capital markets firm. At Baird, our 5 ,000 plus employees are united by an unwavering commitment to excellence and a genuine passion for helping our clients and each other succeed. As a privately held, truly employee-owned company, we treasure our independence since we can focus on delivering results to clients and taking care of our people throughout the cycles in our serve markets.

12:41Learn more at rwbaird.com slash wsj.

12:44Ken Shreve:And if you are a Leaderboard member or trialist, you can check out that webinar tomorrow, as Ken mentioned. It's happening at 4.30 p.m. Eastern. Click on the banner at the top of leaderboard.investors.com to register for that. Looking forward to it, Ken. Yes, indeed. Okay, let's go to some stocks. In the Aerospace Defense Group, let's check out RTX. Yeah, I really like the way that this is setting up here, frankly. I mean, it's obviously a large cap name. You've got smaller stocks in the aerospace defense group that are acting well and probably growing at a faster rate than Raytheon. But this is just a good blue chip liquid stock.

13:26You know, you had a recent breakout. And I particularly like how this is just kind of move sideways, trading very, very tight. It's almost like, you know, hasn't quite tested the 10 week moving average, but it almost How's the look on the daily chart of a little shelf where a stock just pauses? And good support right at that 21-day moving average. We know that top-performing stocks tend to find support at that 21-day line. And RTX, formerly known as Raytheon, I still call it Raytheon, but it's acting very well here. So I like the support at the 21-day line and going to see if this one can make a move over 149.26.

14:10It's setting up like it wants to do it. And you do have a really, really strong industry group here up on the top left of the chart. You can see the Aerospace Defense Group. Six out of 197 just tells you that there's a lot of really strong stocks in this group. And Raytheon, not the fastest grower these days, but still in a good technical setup here.

14:32Ken Shreve:Yeah, I think underscoring the strength, Ken, if you look at the ITA, Aerospace Defense ETFs, I feel like this was one of the first groups to make it to new high territory. And it's been smooth sailing ever since. So a lot of strength out of this group. Yeah, and it's what you expect. I mean, you saw this ETF really started to move right around the time the NASDAQ and S &P 500 were following through again on April 22nd. So if you're there, if you recognize the signs of strength in the market, I mean, you can really make some good money. So, yeah, ITA was a great buy right around that follow-through day, and it's been a great performer ever since.

15:15Ken Shreve:All right, let's check back in on Rubric in the leaderboard portfolio. A nice day of our performance here, up 5.4%, clearing the highs from the prior two sessions. And Ken, it seems to me as of now, this action is playing out exactly how you would hope a stock pulls back after a breakout. You had the double bottom entry. Leaderboard took advantage of that. And now support at the 50-day, and we're starting to bounce. Yeah, we actually started selling this on strength as it was moving up towards the 100 level. I mean, it got to a full position. And then we started trimming it back once it hit that high of 103 and started showing some signs of weakness.

16:03So coming into today, it was only a quarter position. It had been a 10 % weighting in the portfolio. We did take the opportunity to increase it back to a half position today because of the strength that it showed. Volume picked up the pace nicely from yesterday. What's interesting is, and we talked about this a little bit on IBD Live this morning, is that the accumulation distribution rating of E sort of sticks out like a sore thumb. That's the worst possible. And, you know, you've got a lot of a lot of heavy volume declines as it came down to the 50 day moving average. But it's holding support and made a nice technical move today.

16:46But when you look at the weekly chart, you know, it really does look like an orderly pullback. I mean, this is this is just as as classic a test of the 10 week line as you'd like to as you'd like to see. You had two big down weeks in heavy volume, and then you did have an up week in higher volume there, but it kind of closed near its low. So I think the pullback still looks fine. We wouldn't have increased the position today if we didn't think this has an opportunity to be a big stock market leader. So we were comfortable with the increase today. But it is interesting to see that accumulation distribution rating as low as it is.

17:27Hopefully, we'll see signs of accumulation from here. But I think it still looks quite good technically, despite some heavy volume on the way down recently.

17:39Ken Shreve:Yeah, great call out there. I also like that this has accelerating growth over a number of quarters now, Ken, for both the top and bottom line. So a compelling move here. And I think what you're talking about, Ken, also is the beauty of active investing, buying on a breakout, taking profits into strength as a stock is pulling back, adding on a bounce. So really being able to trade around that core position as an active trader. Absolutely. Absolutely. And yeah, I just think this is, you know, great, great stocks. It was multiple up weeks when it initially was breaking out, and it's only pulled back, what, 11 % off its all-time high right now.

18:26So, yeah, this one looks great. Fund ownership is still relatively light, you know, 400 funds in the stock at the end of the second quarter. But it has been materially rising in recent quarters, and that's good to see. I mean, some of your huge mega cap tech stocks have 2 ,000, 3 ,000, 4 ,000 funds owning shares. So Rubrik at 400, I think there's a lot of room for fund sponsorship to increase here as long as they can continue to deliver that really nice top line growth.

19:00Ken Shreve:Yeah, in the early stages. Okay, let's round things out with a name from the financial sector, and that's HLI, Houlihan Loki. Yeah, these charts that we're looking at are just a good representation of how healthy the market is, because here's a stock that's still in the early stages of breaking out of a really long base here. So, yeah, I mean, the market's been running for two and a half months, almost three months, and there are a lot of extended stocks out there. But, you know, we're getting ready for financial earnings season, really picking up the pace starting next week. Um, Houlihan Loki is still a ways out, but we're going to hear from Goldman and JP Morgan Citigroup, uh, next week.

19:45So, uh, investment bank, uh, group is still, uh, you know, very, very highly ranked, uh, 35th out of, uh, 197. Uh, let's go to the daily chart for Houlihan Loki. Um, fundamentals are, uh, outstanding here. Um, for, for starters, you can look, uh, just the last four quarters of, uh, earnings and, And revenue growth accelerated in the first quarter. So did earnings growth. And then based off of this 183.05 pivot, this 5 % buy zone goes all the way up to 192.193. So even though it made a nice move today, it's still in that 5 % buy zone. So I think this is a really high-quality name among investment bankers.

20:34And again, not a name that might not be familiar to a lot of people, but like the fundamentals here and the technicals look strong as well.

20:44Ken Shreve:All right. Well, thanks so much for flagging that one for us as well, Ken. We always appreciate getting your take. And thanks, everyone, for tuning in. That is it from us for today, but it's Wednesday. So be sure to tune back in to our YouTube channel live at 5 p.m. Eastern for our weekly investing with IABD podcast hosted by our very own Justin Nielsen. And he's going to be joined this week by Mish Schneider of Market Gauge. She's going to be talking about indicators that she's watching in the current market. It's going to be a great show. So we'll see you there live. And you can also watch the recording at investors.com slash videos or wherever you get your podcasts.

21:26Ken Shreve:So the team will see you then. And then we'll see you in the morning on IBD live investors.com slash IBD live for all the details. And then we'll see you back here tomorrow after the close.

22:15Ken Shreve:Thank you. throughout healthcare and learn more at medline.com.