Nasdaq Leads Stock Market Rebound; Snowflake, Acuity Brands, TSMC In Focus

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0:39good afternoon everyone and welcome to stock market today for tuesday december 2nd it's rachel here and today we saw the major indexes recoup monday's modest losses with the nasdaq overtaking last friday's high leading the indexes we also saw a rebound in bitcoin as well so here to help me break down everything you need to know in today's market action is IBD senior markets writer Ken Shreve. So Ken, what do you have on tap for us today? Yeah, good afternoon, Rachel. I found three stocks to watch. Going to take a look at Snowflake benefiting today, at least in part by a strong earnings report from MongoDB.

1:22After that, Let's take a look at Acuity Brands. That's going to be ticker AYI. And then after that, how about Taiwan Semiconductor, TSM? Absolutely. We will take a look at those stocks. Some interesting action there, possible early entries. But before we get to that, let's go ahead and break down what happened with the major indexes today, starting with the NASDAQ kind of leading the indexes up, closing up 0.6%. We saw the S &P 500 close up around 0.2 % backing off from its earlier gains. We saw the Dow Jones close up 0.5%, picking up a little bit into the close. And we saw the Russell kind of fade gains into the close, very near break even.

2:16So yeah, lots of interesting action here. Ken, what do you make of this leadership that we're seeing right now? today in the NASDAQ? Well, it was definitely a nice day of outperformance by the NASDAQ, like you mentioned. I think tech stocks were definitely in a good mood early. We could maybe take a look at Credo, C-R-D-O. That was a nice earnings report in the AI space. Credo So, you know, ended with a gain of 10 percent. It was up a lot more earlier in the session, but still ended with a decent gain. And then we had a nice earnings report in the database software group from MDB, MongoDB. So sentiment was positive in the tech sector.

3:08So that fueled a pretty good day for the NASDAQ composite. So, you know, back to the NASDAQ, it was a day of outperformance. I like the close for the NASDAQ yesterday. You know, it was up for five straight sessions. And actually, even though it was a down session for the NASDAQ yesterday, it did close up near its session high. And it was sort of a different story for the S &P 500 yesterday because that was actually a close near the low for the S &P 500 yesterday. So it was sort of a tale of two indexes yesterday. And then today, yeah, the S &P 500 gave back some of those early gains and closed in the bottom half of its range.

3:55But, you know, overall, not too bad. Yeah, we saw a little bit of selling late in the day in the S &P 500. But I'll tell you what, that downdraft that we saw for the market all the way back on November 20th, that seems like a long time ago, but it's been a nice rally for the market. And certainly nice to see the indexes finding a new home above their moving averages here. And hard to believe that both the NASDAQ and the S &P 500 are not far from their all-time highs here. Yeah, it's great to see it again. You know, we saw both the S &P 500 and NASDAQ sort of breaking out of these prior downtrends late last week.

4:39And just been seeing some really nice leadership here in tech. I also want to point out the equal weighted NASDAQ 100 QTVW really held strong leadership today up 1%, closed 1.1 % higher, which is interesting. You know, we saw some divergence with growth stocks or the FFTY, which closed down 1.3%. So definitely lagging here getting away at its 21 day line. And I know that, you know, the innovator IBD50 does have a lot of gold names in it. We saw a bit of a pullback gold. So what do you make of all of this other context? Yeah, well, you're right. That was interesting to see the IBD50 lagging today.

5:29I think it was really, you know, a day of leadership in the semiconductor stocks for sure. I mean, just looking at SMH, that really extended gains for seven days in a row here. And what was interesting is you had semiconductor stocks acting very well, but there was some really strange action in the chip sector. Because you look at a name like Advanced Micro Devices, AMD, here was a stock that was up sharply, tried to regain its 50-day moving average, but it got pushed lower after trying to regain the 50-day moving average. So not such a great day for AMD. And then look at Broadcom, AVGO, which also actually reversed lower.

6:24So that tried to move above the 400 level. So it was really kind of a mixed bag in the chip sector. We've seen a lot of strength in the chip equipment group. LRCX is a name that has been doing well. A lot of chip stocks finding support at their 10-week moving average. If you look at the weekly chart for LRCX, you look at that great first test of the 10-week moving average. This is why we put it on leaderboard recently, just last week. It was really a nice breakout several weeks ago. But you've got a lot of names in the group, ASML, KKLA, just a lot of chip stocks acting well. But when you look inside the group, it's really a mixed bag.

7:17And there's a chip stock reporting after the close. We'll take a look and see what those numbers look like. In terms of QQEW, you're right. That was a great day for that equal-weighted NASDAQ 100 ETF. Definitely outperformed FFTY today. You know, the NASDAQ 100 definitely outperformed the composite today. I think the QQs were up 0.8%. So QQEW outperformed the Qs a little bit today. So overall, Rachel, I think the market is still looking good. Would sure like to see FFTY start to outperform. But just like yesterday, I saw a little bit of weakness underneath the surface in some gold stocks. But again, not seeing any damage in GLD.

8:13GLD, you can see GLD is up three days in a row, down seven-tenths of a percent today. Actually, it looks like it closed up near its high, still holding above all support levels here. So some selling in the gold space today, but just looking at the charts of some leading gold stocks, a lot of these names still holding above short-term support levels. So not a lot of damage in the gold group today, despite some selling. Yeah, and it was good to see gold, you know, sort of pick up, at least close off its intraday lows today. So making some progress through the end of the day. That was definitely a positive there.

8:55Yeah, yeah. And you look at, you know, you look at some big leaders in the group, and I'll be talking a little bit about it in the big picture today. But you look at a sector leader like a triple flag, Precious Metals, TFPM. this is an IBD sector leader. We have a lot of sector leaders, a lot of gold stocks in our sector leaders screen, but here's a triple flag, up for five sessions in a row. You look at the pullback today, yeah, I mean, a 2.9 % decline doesn't look great on the surface. It's a big percentage decline, but volume was lighter than the prior session. You can see the pullback just down, holding above short-term support levels, close off lows.

9:39It's just a little bit below that prior entry. So, you know, again, after five up days in a row, it seems like an orderly pullback that that buy point is still in play. So this is what a lot of the declines in the gold space look like today. Just kind of orderly, not much damage done to the charts. You got strong fundamentals throughout this group. And again, just great representation throughout a lot of our growth screens. So, you know, I don't think the gold trade is necessarily over just because you get some selling one day in the group. So we'll keep watching, but still seeing a lot of high quality names in this group.

10:20Yeah, absolutely. So just to recap, seeing gold closing down 0.7 % GDX, which is gold miners, if I can, if MarketServe will let me pull that up. Oh, we're dealing with site can't be reached. So just give me one moment so I can pull up this chart. But I was just going to show, you know, looking at, there we go, looking at gold versus looking at a GDX. So gold miners, which does tend to be a little bit more volatile on both the outside and downside. so closing down 1.5 % today. So just pointing that one out as well. Yeah. This podcast is brought to you by Federated Hermes. We put our investments through a ruthless vetting process because the market can be unpredictable and we don't think your investments should be.

11:13Learn more at federatedhermes.com slash US. Investments are subject to risk and may lose value. All right. Well, thank you for that overview. you um things seem overall positive moving in a good direction but you know i think uh still staying a little bit cautious uh you know not going 100 on exposure at this moment in time let's take a look at some of the stocks that you brought up so let's move over to snowflake first which uh earnings initially pushed this one higher it closed up about uh three percent so came in off highs, still in this buy zone here. Really nice to see it retake the 50-day and 21-day lines.

11:55Earnings right around the corner here. So tell us what you see. Yeah, well, this is a stock that initially rallied on the MongoDB earnings. And they don't directly compete with MongoDB. They do deal with data. Snowflake is more sort of a cloud-based data warehousing company. And MongoDB is not cloud-based. They're referred to as sort of a no SQL document database company. So kind of different business models, but they both deal with data. So Snowflake definitely moved on the MongoDB earnings. So we'll see what Snowflake has to say tomorrow. We're considering an option trade for Snowflake based on earnings tomorrow.

12:54It looks like a relatively cheap trade. So we're considering that for the leaderboard model portfolio. You can see Snowflake gave back some early gains today. Still ended with a gain of 3%. Volume picked up the pace. You look at the earnings for Snowflake over the past couple of quarters, you can see 71 % earnings growth, 94 % earnings growth over the past two quarters. Revenue growth accelerated in the latest quarter that they reported for the July ended quarter. If we look at the weekly chart, Rachel, this is really just a nice little technical setup here. back above the 10-week moving average this week.

13:39So there's some pretty good optimism that Snowflake is going to have good numbers here. If we scroll down and just look at the fundamentals here and see what the numbers for the October ended quarter are expected to be. Earnings expected to be up 56 % year on year and revenue up 26%. So you can see the top line growth. with Snowflake is a pretty compelling growth story. And as you know, Rachel, at IBD, we like to see the fundamentals in place. We like to see the price performance. We like to watch the leading price performers in an industry group. So Snowflake checks the boxes on both counts. It's got a pretty healthy relative strength line.

14:26So we think there's a chance of a pretty good quarter here. And with the NASDAQ back above its moving averages, Snowflake looking pretty well here, pretty strong. We'll watch the earnings report. And again, we'll consider a call option trade at some point tomorrow. We'll see what the premiums look like at probably that 260, 261 strike price in that area. But we're thinking there's a chance for a good quarter here. Very good. Well, we'll definitely have to keep an eye out for that options trade in the options column. To anyone who's looking at this EPS rating of 79 thinking, well, that doesn't look super great.

15:08You know, we like to see that above 80, above 90. It did have some difficult years of, you know, losses and then year over year declines. But as you pointed out, it looks like going forward, we're going to see some growth pick up there. So that's definitely a positive. And I would say, you know, just on a technical basis, there could be a downward sloping trend line to be watching here to see if the stock can break out of this mini, you know, downtrend. And yeah, definitely we'll be watching to see what happens with earnings. All right. Well, thank you for that. Let's move on to AYI Acuity, which is holding up nicely at its conjoined 50-day and 21-day lines.

15:55Earnings out of the way, not a problem for this one, but it's setting up in a flat base, very close to a buy point. So what's your analysis here on this? Yeah, not growing nearly as fast as Snowflake, but a pretty compelling stock here with a composite rating of 95 and an entirely different business, of course, than Snowflake. This is a company that's made its mark as a provider of industrial lighting solutions. And they've started to see some business in data centers as a provider of specialty lighting solutions for the expansion of these data centers. Not a big part of their business, but it is a new growth market for them.

16:43So we're seeing the stock starting to perform, and it's really forming a nice base here. Recently moved above its 50-day moving average. I like the tight sideways consolidation here. I think that definitely qualifies as a flat base, a pullback of only 11 % from its high to low. So that qualifies as a flat base. I mentioned that composite rating of 95. That's helped by some pretty steady growth, at least over the past three quarters, double-digit earnings and revenue. And then the weekly chart here is looking pretty strong and really nice prior uptrend that moved from 230 up over 340. And, yeah, really, really strong here.

17:33So I like the look of the flat base. It's, again, earnings still not that long ago since it reported. So we'll have to wait a while for its next earnings report. Market cap of$11 billion. So it's just a nice, solid mid-cap company here right at the top of a base. And in a healthy market that we seem to be in right now with major indexes up near highs, I think this one has a chance of possibly trying to break out. So we'll need the market to continue to act well here. Money continues to come in from the sidelines. I think this one has a shot. So good technical setup. Seems to be percolating here.

18:16We'll see if volume comes in and this one can try to break out to new highs. Absolutely. And I believe this was, I don't know if you mentioned, I believe this was a recent stock of the day. So there's a good story on that one on investors.com. And finally, moving over to our last ticker, TSM, which on a daily chart, I think I'm seeing definitely potential for early entry, another flat base setting up a stage three flat base. So this one has had some successful breakouts leading up to this consolidation. So what do you see going on here? Yeah, this one is kind of on the same reporting cycle as Acuity or not, or yeah, Acuity Brands and kind of a similar setup as well here, just trading nice and tight.

19:07This is as much an AI stock as any company out there. They count basically every major tech company as a customer, as the world's largest chip foundry. Foundry, so Taiwan Semiconductor, they make chips for some of the largest chip companies out there, Broadcom, AMD. So this is a company that just does a lot of business. And you can see the earnings are just exploding and just the fundamentals are quite impressive here. and the growth just continues unabated. So they make AI chips for a lot of customers. And again, swinging over to the weekly chart that provides a longer term perspective, a stock that has trended well for quite some time.

20:11It goes up, it bases, it goes up, it bases, it goes up in bases. It just does the same thing over and over again. Still a strong industry group and it is forming another base after a prior uptrend here. So it's setting up again and just has a great track record of earnings and revenue and that growth story is still intact and it's still a relatively cheap stock valuation-wise when you look at its growth and how much it's expected to grow going forward. You're not dealing with a super expensive stock here. So another good technical setup. And, you know, amid all of this, all of these AI stocks that get a lot of a lot of attention, this one sometimes goes under the radar.

21:01And, you know, and yet it just continues to set up here and could be on the verge of another breakout. It's got a really healthy relative strength line as it's been basing. The relative strength line is still holding up near highs here. So it's still looking strong, and I think it still has potential here. So another one to keep an eye on. Yeah, a lot of really strong ratings. I will note accumulation distribution rating of D, not necessarily the strongest. Also up-down volume ratio of 0.8. So those are two measures of institutional support that we do look at. But I would say, you know, there are some blue volume bar spikes down here.

21:44So that shows stock there is some healthy accumulation there. And number of funds has also been going up. So they're definitely, I would say, overall on this one, definitely more positives than negatives. And I don't know, Ken, I think there might be a possibility for an early entry here above the November 20th high. I don't know if you would consider that possibility as well. Yeah, I think with TSM, what the stock really needs, you can see just there really hasn't been a whole lot of upside volume in the stock for quite some time. There hasn't been a lot of heavy volume selling in the stock, but you can see there hasn't been much volume.

22:25And so that's kind of weighed on the accumulation distribution rating. Again, you've seen some higher volume declines, but it hasn't been just massive waves of heavy volume selling. Still, it has weighed on the accumulation distribution rating. So if this stock eventually gets moving and gets going over the 300 level, you'd like to see some volume start to expand to the upside. So even though the accumulation distribution rating is D and maybe a little subpar, that's just because there hasn't been a lot of upside volume lately. But the base still looks good. And as it starts or if it starts getting its mojo and starts to move above the 300, you want to start to see volume expand.

23:09So we'll see. But the setup looks looks looks good so far. And if, you know, the S &P 500 and Nasdaq start start moving and TSM continues to get its mojo back, we'll see if we'll see if volume starts to roll into this name as well. Yeah, absolutely. All good things to watch for. And well, thank you for those three stocks and for your analysis on the overall market as well today, Ken. I think that'll do it for our Stock Market Today video today. We'll be back, everyone, with more market analysis tomorrow morning, starting with IBD Live. You can head on over to investors.com slash IBD Live for all the details there.

23:57So, yeah, thank you so much for watching here today, and we will see you right back tomorrow after the close.

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