Nasdaq Holds 25,000; Amazon, Baker Hughes And Bunge Global In Focus

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0:41Good afternoon and welcome to Stock Market Today for Monday, May 4th. It's Rachel Fox here. And today we saw the major indexes pull back on some geopolitical headlines, but still holding up here. Here to help me break everything down with you today is IBD's head of market research, Justin Nielsen. Justin, what do you have on tap for us to look at today?

1:05Rachel Fox:Well, in addition to the markets, we'll take a look at a few ETFs and some stocks, including Amazon, Baker Hughes and Bungie Global. All right. Amazon, Baker Hughes and Bungie Global. We will definitely get to those stocks. But before we do, let's go ahead and take a look at the major indexes. Just a little recap here for you. S &P 500, we saw close down about 0.5%. The Nasdaq was off by 0.2%. The Dow Jones struggled the most and fell about 1.1%. And the Russell lost 0.6%. So I'm going to go ahead and share some charts here and we can break this down together. But yeah, we saw the indexes pull back on some geopolitical events flaring up.

1:50NASDAQ did parse some of those losses into the close. You know, we've still got a lot of bullishness going on here. We're in a power trend. We saw outperformance from biotechs in different areas of the market. So, Justin, give me your thoughts on what we saw here today.

2:05Rachel Fox:Well, let's start with the NASDAQ because I think the NASDAQ is, again, showing how much this is a tech-led rally, AI and AI-adjacent things. I mean, even some of the areas where you're seeing, you know, non-tech, it's like building heavy construction, which is building infrastructure for data centers. And so it's AI related. Even utilities to some degree or, you know, power plays are kind of getting in on that. But, you know, NASDAQ, I think what is impressive to me here, like, you know, the gain at the start of the day was, you know, was fairly mild on the NASDAQ. It was only up like four tenths of a percent intraday, but it got down as much as eight tenths of a percent and really kind of finished well off the lows, just barely in the upper part of its trading range today.

2:56Rachel Fox:So it's nice to see when the market kind of hits that news, you see the selling, but then it just doesn't lose much ground. And that's one of those things where you just kind of see the buying support come in right there at 25 ,000. so it shows a resilient market. I mean, we've seen that time and time again where news comes out that in a worse market or in a more fragile market, let's say, it could really send stocks plummeting, but you typically get that buying support and a lot of these stocks just don't want to come down. And even, you know, though the market was only up four tenths of a percent, I mean, a lot of the stocks I was in were up, you know, three, four, five percent or more at the start of the day.

3:43Rachel Fox:So it was a little disappointing that you had this nice day in a lot of these stocks that didn't finish well. But still, I think the takeaway here is the resilience of this market. And now the S &P 500, you know, a little bit wider in terms of its move, you know, or at least where it finished, you know, and definitely undercutting the action of Friday, which was a reversal itself. But that's, again, this isn't unusual, right? After a reversal like we saw on Friday, you would expect a little bit more weakness. In fact, a lot of times we kind of look at a two and a half day element of weakness. So you would see weakness today, maybe weakness tomorrow, and then maybe one half day where it starts weak and then finishes in the upper part of the range would be a very normal thing.

4:33Rachel Fox:And the indexes are also very well above their 21-day moving average line. That's the green line on your chart. They're not even coming down. Is that a 10-day or an 8? Yeah, so a 10-day. I mean, they're holding the 10-day moving average line. So you want to make sure that on a down day, you're not making too much of it. This is really, as far as down days go, this is very mild. Going over to the Russell 2000, now that one was hit a little bit harder, down six tenths of a percent and definitely in the lower part of the range as opposed to the Nasdaq in the upper part of the range. But still not not too bad.

5:12Rachel Fox:Still above the 10 day moving average line. We will see how this handles itself around 2800. I think that's an area to watch. You know, you'd like to see it get above there and hold it like the Nasdaq did with 25000. It hasn't done it yet, but that's certainly something to watch. And then we'll just kind of give a final look at the Dow Jones Industrial Average down a full percent. You can sometimes have single stocks really kind of taking this down. This certainly looks weaker. Holding above Thursday's low, which you would expect it to do if that reversal there is, you know, truly kind of work for the Dow.

5:47You want it to hold that level, but given the strength in the other indexes and

5:52Rachel Fox:where they're at. I'm not going to let the close below the 10-day moving average line on the Dow really sway me from my plan with everything else. Again, I am very heavy in tech. I do maybe want to spread that out a little bit more, you know, because I'm very concentrated in AI right now. But the Dow Jones is not where I'm, the Dow Jones Industrials is not where I'm looking to put my investments in. That's right now the weakest of the indexes. Yeah, absolutely. And we've got Thursday's low to look at. We've got the 21-day line here. And we've got some areas up ahead to look out for, for the Dow and the Russell.

6:32So, you know, areas to clear for sure. So I guess we'll be watching those. And you're right, things have been very concentrated in the AI space. That's what's working. That's where the strength is. But we did also see some strength come back here in biotechs today. We saw XBI, biotech ETF, retake the 21-day line where it had kind of been stuck in between 21-day and 50-day for a couple days there. This is nice to see.

7:02Rachel Fox:Yeah, it's nice to see that things are still setting up. Now, the problem with a lot of the setups that we're seeing right now is that the relative strength lines have been a little bit poor on these. If it's basically had a handle or any type of base recently when everything has been skyrocketing, well, guess what? The relative strength is going to look a little poor. But it's nice to see that, again, maybe there's some rotation here. You know, this is definitely something that was on our radar. It got, it's been on leaderboard for quite a while. A really nice move for leaderboard, you know, I think in the 80s is where they initially picked it up.

7:38Rachel Fox:So that got an ad for leaderboard. Swing Trader also added it. I have it in my portfolio as well. So yeah, this is something, one of the areas, again, to get a little bit outside of that AI space, you know, the biotech seemed like a good place. So not only did you get above the 21-day moving average line today, but you also had that bounce last week where it got support at the 50-day moving average line. And yeah, just a very mild pullback, not doing anything particularly wrong. Yeah, volume looks to be lighter than average on the pullback as well. We're now back above the$1.3209 buy point here, so definitely one worth keeping an eye on.

8:21Another one that caught my radar today was IGV. Software stocks have been struggling for quite a while, but we appear to be coming up to a ceiling here around$88.58. Made a strong move today, up over 2%. Yeah.

8:38Rachel Fox:So for tech, it's been amazing that the NASDAQ has been as strong as it has been, despite how weak IGV in the software industry has. And it kind of speaks to even the Magnificent Seven. You've got names like Microsoft and Meta that are really dragging things down. And the indexes are strong despite the weakness there. But getting back to IGV, I absolutely agree with you, Rachel. You know, you just look at that. If you just look to the left, a lot of times you'll see, hey, there's an area here of importance. It's an inflection point right around that 88.58 that you brought up. So, yeah, I don't know that I'd want to do anything ahead of that because so far that's been an area where it's hit its head.

9:25Rachel Fox:So to me, it's kind of guilty till proven innocent at this point. And it really has to kind of get above that level. But it is interesting that, you know, again, a lot of people looking at this hasn't made a bottom. Maybe. It's not my style to be buying things underneath the 200-day moving average line. But if you do get this, you know, kind of, I guess, support in the software space, that hopefully will be better for tech overall. Yeah, absolutely. So key level to be watching here. Can it move above this level in high volume? That's what we'll want to see. Let's take a look at one more area that's been outperforming at least today.

10:06Not outperforming over the long term, but had a nice talk today. This would be Bitcoin, iBit. Tell me what you're seeing here.

10:14Rachel Fox:Yeah, so kind of similar to IGV, right? The software, you know, getting hit and iBit, the Bitcoin has been getting hit quite a bit as well. below its 200-day moving average line. But now this has made it back above its 50-day moving average line. So, you know, that's pretty key, just like the software. And, you know, I would kind of equate that 88-58 area that we were looking at on IGV to this 42-50 area. We really did kind of test that and actually come above it. And we tested it. Now it got support at that level. So if you drew a line just kind of straight from that 42-50 and took that to the left, it got support there.

10:52Rachel Fox:So Bitcoin is looking a little bit better to me. Still, I'm not a big fan of buying things underneath a 200-day moving average line. That's not my style. I know it works for a lot of people to buy on the weakness. I just, not the way I was brought up, you know, type thing. But certainly this is worth keeping an eye on, especially since you just had this last pullback to the 21-day moving average line where it got that support at 42.50, bounced, and And now here we are getting to recent highs. Still has a lot of overhead supply to get through, but it's got to start somewhere, right? So this is, you know, just starting to tick off certain obstacles that it's hurtling over right now.

11:30Yeah, yeah. Worth watching as it continues to tick off those obstacles and overcome them. Got some volume as well, just to point out behind today's 2.1 % move today. So good to see that. another one to be watching here.

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12:23So let's first take a look at Amazon, which has had a nice move over the past few days. Closed off highs, but still up 1.4 % here. Some nice volume behind the move, trading just above this buy zone here. Why is this one notable today?

12:43Rachel Fox:Yeah, well, certainly one of the things is over the weekend, they were kind of announcing that they're getting into a little bit more of the, you know, logistics, expanding their logistics network. Now you saw stocks like FedEx, FDX, for instance, which was looking just fine. I mean, this was looking like a nice setup and just got clobbered because no one wants Amazon to start coming into your business. but again it was it was a positive for Amazon and just taking a look at Amazon it this has been one of the you know big big big movers of the mag 7 the magnificent 7 it recently got above that 256 60 area it's kind of crossed around number of 260 it's held it it's getting support the the the 10 10 day moving average line it had that big wide spread on earnings but was able to finish off its lows.

13:38Rachel Fox:The next two days were kind of inside, but then it actually crossed Thursday's high today. Didn't close above it, but I think that's an area that I'm watching very closely. I do have a position in this, but I was looking to add to my position if it can cross that Thursday high and stay above it. I was going to do it earlier, but we actually increased our position on Swing Trader, so I was doing that instead of my own portfolio. But that's what I'm looking at for an ad on this one. Yeah, that definitely makes sense. I will point out we are over 20 % extended above the 50-day line. So getting up there, I think the major indexes are also kind of getting a little bit extended from those moving averages.

14:22So just point that out.

14:23Rachel Fox:And just so you know, for my particular style, a lot of these are starting out as swing trades for me. So there is no way I'm letting this get all the way back down to its 50-day moving average line before I take action. But, you know, I'm really looking at Thursday's low. If it undercuts that, I'm probably out. And so, you know, it can come to the 10-day moving average line. But I might even be scaling back if it hits, you know, that 10-day moving average line or the 260 level. But, yeah, I think I'm ultimately out at the Thursday low. But I might start selling ahead of that. Yeah, that makes sense for a swing trading perspective for sure.

15:02Okay, well, let's go ahead and move on to the next ticker, which is Baker Hughes, BKR. So this one here, trading, holding up inside of the 5 % buy zone, a nice consolidation here with a 67 buy point. Tell me what is interesting here.

15:20Rachel Fox:Yeah, and I was actually looking at this at 64.92. When it kind of popped its head above there, I was thinking, oh, this looks like a buy to me. But it was right ahead of earnings. I didn't want to step in front of that earnings train, you know, so I skipped it, but it's looking good. And after the earnings announcement, it really popped up very well, and it's just holding. So I feel like a lot of times if you're not comfortable buying gap ups, this is kind of a sometimes a second chance saloon for you where you can just watch it kind of consolidate and get those. it consolidates the gains and it kind of makes you feel like, look, these these people are comfortable with it at this higher valuation and they're not wanting to sell shares.

16:05Rachel Fox:In fact, a lot of times it means that they're absorbing any selling that's happening. So the fact that it's holding up so high in that range is a positive to me. And yes, there's a lot of, you know, oil oil prices have been very strong. It's actually surprising that for as much as the oil stocks have been going up, and you can just take a look at USO, for instance, or XLE, either one of those, you know, that the market has still been able to do as well as it has, because that's usually a major headwind. But yeah, for, you know, for Baker Hughes, it does have that infrastructure component. So that's a positive to me, you know, not necessarily tied only to the price of oil.

16:49Rachel Fox:You know, some of the infrastructure, I was looking at that all the way back in January with the Venezuela situation. So I've been looking for another opportunity to get into these. I did play it in January. Some of these field services and things for that rally. It's been basing this whole time. And now this might be another setup to take advantage of. Yep, absolutely. Tight action here. Looking bullish. So another good one to keep an eye on. Less extended. For those that do like the ETF route, OIH is kind of a way to play some of these field services. That one looks pretty strong to me as well.

17:26Rachel Fox:Sorry, I didn't mean to interrupt. Nope. Yep. A great one to bring up. Another one kind of holding up tightly here, sideways a little bit. But yeah, looking strong. Good one to bring up. All right. We will move on to your final stock here. Bungie Agricultural Operations. kind of been a sideways mover here, holding up nicely at the 50-day line and at the moving averages, which are coming closer together. RS line has really taken a hit as it's been, you know, underperforming the S &P 500, but still worth watching. What say you about this one? So this of the three, I think this is on the weaker side.

18:08Rachel Fox:You know, there's been a little bit more volatility on the price action. It just, it really hasn't formed a base. It's just been kind of meandering a little bit. It's held above the 50-day moving average line for the most part, you know, dipped below it a little bit, but not in a big way. And on the fundamental side, yes, you know, you've got a lot of things on the agriculture side that are seeing higher prices, supply chain disruptions because of straight of Hormuz stuff that's going on. So I don't know if that's exactly what's happening here with Bungie. But, you know, the sport on the 50 day moving average line, while compelling, there's a lot of things that are a little bit weaker on this.

18:51Rachel Fox:You know, the fundamentals aren't great. You know, it's there's not really a base to work off of. But it's still if I'm looking to be outside of tech, I want to be aware of some of these areas. Now, it still, again, has probably that exposure to global or geopolitical headlines like a lot of things do right now. But still, I want to make sure that I'm not ignoring these groups. And look, this group has been very strong. It's number 39 out of 145. That's, you know, been one of those impressive things about the agricultural operations and a lot of the chemical spaces that have been kind of going up here with the Iran conflict.

19:31Rachel Fox:So just something to be watching and be aware of. You don't want to just, again, stick all with tech. That's why I like the XBI position that I have and a few of these others in the oil space to maybe just, again, have a piece of these other things. So you're spread out a little bit more than beyond just AI. Yeah, absolutely. It's a good idea to broaden out, especially as things are beginning to broaden out here. So thank you so much for your insights here. Justin, any final thoughts before we close this out? Well, you know, one of the things that we talked a lot about on IBD Live today was that, you know, you, you know, last Tuesday was a kind of a rough day, right?

20:12Rachel Fox:You know, a lot of these AI stocks were getting hit. So you do have to have your plan in place, you know, because we've gotten a market that's been going strong. You should have cushion on a lot of stocks if you've been incrementally buying since the April 8th follow through day. But, you know, you got to expect that even though we're in a power trend, even though we've been trending nicely, you can have these days where you're kind of shaken a little bit. And rather than getting completely shaken out of your positions, you want to kind of decide what what are my strongest stocks? What are the ones that I have the best cushion on?

20:47Rachel Fox:What are the ones that I how am I going to react if these pull back? Because a lot of times a pullback doesn't happen just with a single stock. It happens with multiple and that puts some extra pressure because your portfolio is taking such a large hit. So, you know, have some have some ideas of where you would want to have your stocks, which stocks you would want to, you know, toss out first. I always think of it as a boat. You know, if you get some holes in your boat, you got to know what you're going to throw off that boat first. So just have your stocks lined up in that way so that you do have some exit strategies in place.

21:19Rachel Fox:But also, when you're in a powertrain, you want to kind of lean more bullish. So, you know, trying to have some rules in terms of, OK, I'm not going to do panic selling. I'm going to wait five, 10 minutes if there's a really harsh day to see if things, you know, start getting support. it's really important to kind of do this scenario analysis. If this happens, what would I do? If this happens, what would I do? So that if that scenario does come to pass, you're kind of prepared and not trying to think about it on the fly. You've already got a plan in action, action plan in place. Yeah, absolutely.

21:54It's not just about buying anything that you buy. You have to know moment by moment what you're gonna do. If this happens, if that happens, that's all part of the game, part of the investing challenge. So great thought.

22:07Rachel Fox:Survivability, you know, just surviving. I mean, that's half the game right there. And that really comes down to risk management. Absolutely. All right. Well, we will wrap this up here, Justin. Thank you so much for joining me to talk about these stocks today. And that's going to be it for our show today. We'll be back with more market analysis tomorrow, starting with IBD Live. So you can head over to investors.com slash IBD Live for all the details there. Thanks so much for watching. stock market today and we will see you right back here tomorrow after the close