Nasdaq, S&P 500 Jump To Record Highs; Broadcom, Analog Devices, ANET In Focus

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0:41Ken Shreve:good afternoon everyone and welcome to stock market today for wednesday april 15th it's alissa quorum here and yet another day of strength for the nasdaq composite now back in new high territory who would have thought just a week and a half ago we'd be at new highs joining me now to You discuss the market action and a couple of stocks to watch. Brought to us today by the letter A is my colleague, Ken Tread. Ken, what do you have for us? I just noticed that myself. Yeah, three tech stocks as well. Let's take a look at Broadcom. Another tech stock, Ali, is going to be Analog Devices, ADI. And the final A is going to be Arista Networks, A-N-E-T.

1:28Ken Shreve:There you go. All the tickers start with the letter A. I guess not all the company names, but all the tickers do start with the letter A. All right. We'll take a look at those stocks. But first, as we always do, let's check out the major indexes. Ken, how impressive is the NASDAQ composite here, right? Up 1.6 % today. The Dow was slightly lower on the day, but the S &P 500 also had a nice up day. So if we go to the S &P 500, up 0.8 % of a percent. It, too, powering into new high territory. So a very impressive day for the NASDAQ and the S &P. Yes, indeed. And I think this was some sort of, well, obviously a record high for the NASDAQ composite today.

2:19And I think 11 up days in a row is also a record, at least from our friends from Dow Jones market data. But it did touch a record high on an intraday basis and maybe even a record closing high as well. So just an incredible rally for the NASDAQ composite. Ironically, we did not get a follow through day for the NASDAQ composite. It was the S &P 500 was the only index that followed through recently. But just an incredible rally for the NASDAQ. Obviously, just recently, it's been software stocks that have powered off lows, and they rallied powerfully again today. So large-cap technology stocks, the Magnificent Seven stocks have been rallying very, very well today.

3:09Breath, not very good today. It was positive by less than 2 to 1, positive as well on the NYSE. But you could see a big gain for the S &P 500 today. But RSP could barely eke out just a fractional gain today. So breadth, not that great today. Pretty narrow rally on the NASDAQ. Again, it was just kind of large cap tech, a lot of beaten down software stocks, you know, did a lot of the heavy lifting today. But, hey, record highs for the Nasdaq and the S &P 500 today, all-time highs. This market rally is not going to be stopped. There's obviously optimism that this conflict with Iran is probably near an end and that there's going to be some kind of truce sooner rather than later.

4:05So we're waiting for some developments there. President Trump said today that there could be some developments over the next couple of days. So we're waiting to hear what developments will be seen there. But, you know, pretty impressive performance for the market, for sure. Right.

4:26Ken Shreve:You still have that uncertainty. We don't have a resolution. And I think that that underscores the importance of technical analysis in a market shift, right, Ken? and getting exposure, looking at technical signals like we do with a follow-through day on the S &P with that gap up or the NASDAQ here in spirit, perhaps for those who don't look at the volume component. But that big move on that follow-through day was notable. And then the strength that we've seen since the subsequent follow-through days, more gains of 1 % or greater. And leading up to that, some power off the bottom, some upside reversals, again, with this backdrop of uncertainty.

5:15Ken Shreve:So adding exposure along the way, the more bullish signals that we get in spite of the negativity on the headline front or the uncertainty, bull markets climb a wall of worry, right, Ken? Yeah, yeah, they certainly do. And, you know, follow through days tend to happen when they're least least expected. And, you know, the the sign of strength that we got for the S &P 500, again, that was when the NASDAQ gapped above the 50 day moving average. It's just a very, very, very incredible sign of strength. And it was a six six day follow through for the for the S &P 500. And it was, yeah, it was just that very bullish gap up for the S &P 500.

6:08And it closed just above that 50-day moving average. That was the six-day follow-through. And it was just really one down session since then, but just explosive gains since then and a powerful move through the 7 ,000 level today, all-time closing high. And, you know, we're at a point where, you know, we'll get a pullback at some point and probably overbought at some point. But we'll just watch and see what the pullback looks like. Obviously, we'd like to see it in lower volume. And so we get a low volume pullback. Hopefully, we see an uptrend resume in higher volume. So higher volume gains, lower volume declines.

6:53That's a picture perfect price action. But like I said this morning on IBD Live, we've passed that danger point where even if we do start to see some sporadic distribution in the market or higher volume declines, that's not going to be a deal breaker at this point. I think the market can handle some occasional distribution, but we certainly don't want to see clustering of distribution days at this point. We don't want to see the market leaders at this point, the leading growth stocks start to – we don't want to see higher volume. declines and technical damage start to pop up in some of the market leaders.

7:33So just kind of orderly declines at this point would be just what the doctor ordered. But, you know, really, really nice price action so far in the market. And, you know, the crop of growth stocks we did. It was interesting that I mentioned the breadth wasn't that great in the market today. Again, advancers beat the decliners on both exchanges, but the ratio was only, it was barely positive, less than 2 to 1 positive on both exchanges. And we did see quite a bit of selling in growth stocks underneath the surface today. Maybe not surprising to see some profit taking, but we did see some selling in some interest rate sensitive stocks.

8:12For example, in the Dow today, Caterpillar took a pretty big hit. CAT was a laggard in the Dow today. Now, up for several sessions in a row, came down and tested its 10-day moving average. But there were some comments from the Cleveland Fed president saying, you know, probably not going to see many interest rate cuts. Interest rates are probably going to stay right where they are. So a lot of these interest rate sensitive industrial stocks were under pressure today. If you look at some of the weakest performers in the S &P 500 today, a lot of them were interest rate sensitive stocks like a Caterpillar, IR, Ingersoll, Rand.

9:01Look at the decline that that one made today. That was down five, almost five and a half percent today with some volume. This is an interest rate sensitive stock. some of your HVAC companies Carrier was a CARR a bad performer in the S &P 500 today that fell in some volume today also LII Lennox in the same industry group one of the worst performers in the S &P 500 today so saw some selling in some of these names today and it wasn't like the 10 year yield spike today it was only up a couple of basis points but But again, saw some heavy volume selling in some of these industrial names. Wabtec, another one.

9:47So just interesting to see some selling underneath the surface. And then some top-rated growth stocks, MOD, another name that was down today, down 6%. But again, a lot of these stocks have been running higher. So some selling underneath the surface today, but I just can't look past the record highs for the NASDAQ and S &P 500 today. So maybe some profit taking in some of these winners, but I think the uptrend overall still looks pretty good here. It does.

10:20Ken Shreve:Yeah, great color on some of the rotation, where the money is flowing out of, where it's flowing to. Ken, quick thoughts on the Dow and the Russell before we move on. yeah i mean the dow was uh very orderly we had a lot of uh you know some weakness in the dow caterpillar was really the sore thumb had some financials uh weak uh in in the dow as well but plenty of strength as well so the dow was just a very orderly uh decline it uh you know holding above its 50-day moving average after two up days in a row really didn't move much russell russell 2000, you know, that was a powerful gap above the 50-day moving average as well.

10:59And that is right up near the top of its base here, just off that recent high of 271. So small caps still showing a bunch of strength at this point. So your blue chip index, the Dow is technically the lagging index at this point. But boy, that Russell is right on the verge of a breakout as well.

11:23Ken Shreve:It is. Let's take a look at the dollar really quickly. And the U.S. We've definitely seen a shift here. Yeah, friends from Dow Jones, U.S. dollar index here. This is kind of a notable move here. I mean, typically the stock market likes a weak dollar, but the U.S. dollar index today, This eight-day losing streak, the longest losing streak for DXY since April 29, 2011. And this is according to Dow Jones market data. So quite a losing streak here, longest in quite some time. So we'll see if this is going to bounce at some point, but below its moving averages here. So kind of a noteworthy losing streak for the dollar index.

12:14And we will see if it's going to bounce at some point. But like I said, the market typically doesn't mind a weak dollar. And that's given the major stock indexes reason to rally here. So noteworthy decline for the dollar index. Eight-day losing streak, longest since April 29th, 2011.

12:36Ken Shreve:Nice little factoid there for today. Thanks, Ken. We're the Hartford. with decades of experience insuring millions of unique small businesses. When it comes to your small business insurance, one size absolutely does not fit all. Get a quote or find an agent today at thehartford.com slash smallbusiness. Highlight the three stocks that we wanted to cover today, starting with Broadcom, ticker ABGO. A win streak that this stock has up 4.2 % on the day, but now up quite a few days in a row as it carves the right side of a base, Ken. Yeah, I really like the way the stock is setting up. We have it on the leaderboard watch list.

13:24We'd like to get this back on the leader's list at some point. We're not going to chase it after so many up days in a row, but we have it on the watch list just because we're going to wait for a more suitable entry point. So we're just going to wait, wait, wait for a new entry here. What we're going to do is just going to wait, wait for a little pullback here. So as it approaches that left side high, we'll wait for a little handle to form here. We think there's a pretty good chance of that happening. It's going to pause and digest gains here. So we'll just watch it here. But like how the stock has rallied off lows here, the accumulation distribution rating is solid.

14:06You can see the composite rating of 99 is fueled by several quarters in a row of great bottom line and top line growth. I think this company's fundamental picture is just as strong as NVIDIA's, which itself is in the same industry group and is delivering the growth just like Broadcom. Broadcom makes custom AI chips for Google. In fact, they make Google's tensor processing units. They're not CPUs. They're called TPUs, which are also made by Anthropic, which is an AI startup. So Broadcom is a big maker of custom chips. They announced this morning that they're also going to be supplying Meta with some of their custom AI chips as part of that deal.

15:01the Broadcom CEO, Hawk Tan, is going to be leaving Meta's board. So Broadcom is also a pretty big supplier to Meta platforms, but really great growth here. You can see the annual earnings estimates are huge for Broadcom. And I think it's encouraging to see names like NVIDIA and Broadcom still poised for great growth, setting up here for potential moves higher here. So they both might consolidate a little bit here after strong moves off lows. But, you know, they could be setting up here for potential moves higher. I think both growth stories are still quite compelling here.

15:40Ken Shreve:Compelling to see that strength from these mega cap chip names. All right, Ken, next on our list, let's head on over to ADI, Analog Devices. This is in the Semi Manufacturing Group, and it's working on the right side of a base as well. Hasn't quite shown the same kind of power in recent trading sessions aside from that gap up day last Wednesday. But a pause here, still constructive. Absolutely. And this is a stock that gapped up recently. This gapped up right during the S &P 500's follow through day. It's also a chip stock. It's not in the same industry group. They're not a chip designer. They actually make chips, integrated circuits.

16:29They mix signal devices, but they serve a variety of different industries, everything from industrial automation, automotive technology, healthcare, power management. I mean, they're in all different types of industries. Also, very strong growth prospects. So after the gap above the 50-day moving average, I wanted to just talk about analog devices. Not only is it a massive company, market cap close to 200 million, excuse me, market cap. Yeah, it's a big mega cap company. But the four down days here is a good example of what a handle looks like. So while we're going to wait for Broadcom and NVIDIA maybe to add a handle, analog devices is already doing it and it's forming in light volume.

17:24So you have this handle starting to drift lower here. It's doing it in light volume. So this is a classic, what looks like a cup with handle base setting up here. So another stock in the chip sector that is setting up great fundamentals here as well. Chip stocks continue to lead the market here. Nice uptrend from a prior breakout and just a great example of what a base building stock looks like. And I think it's another one worth watching because it's a high composite rating stock and setting up here. So analog devices, a good one to watch.

18:03Ken Shreve:Absolutely. And that acceleration in top line and bottom line growth, we like to see it. All right. Moving on to a little bit. And the turnaround story, too, because you can see the – yeah, I was just going to say the turnaround story. You can see the declining along the bottom of the chart, the declining earnings and sales in 23 and 24, and then growth picking up starting in the second half of last year and really, really starting to pick up the pace. So nice turnaround story going on at ADI, growth picking back up, building a nice base here. So, yeah, definitely one to watch. All right. Well, shifting gears here, a little bit of a different industry group.

18:49Ken Shreve:Arista Networks clearing a trend line last week, adding to the gains this week, another alternative entry as well that is clearing from the highs within the base, taking a closer look. That level within, you know, that 150, 152 area can. So a lot of momentum here as of late, and it's starting to pause. Starting to pause. The one knock against Arista here is it's in an industry group that's not nearly as strong as the chip group. However, so 111 out of 197 is sort of in the bottom half of our 197 industry group rankings. However, Arista Networks is another fundamental giant. It's just got a great track record of annual earnings.

19:40Nice move off lows here with some volume. So I like the way the stock is consolidating here. After so many up days in a row, look at what the stock did today. Instead of coming down, it tried to come down, and it closed all the way up near its highs and basically was down four cents on the day, basically unchanged. So if it can just kind of pause here, buy it some time. I mean, probably the stock is sitting near a buy area right now, but if it could just pause, catch its breath, maybe form a handle, just buy it some time, I think this could set up a nice entry here. Arista is, you know, they're going to be coming out with earnings pretty soon.

20:27And they're going to be reporting first quarter results probably over the next few weeks or so. But in a nice technical setup here, could be a candidate for a call option trade. We may take a look at it, but definitely a leader in AI networking and a name that we're watching on leaderboard as well. Nice gap above the 200-day moving average. And just like the way all three of these stocks are setting up. So I like the potential of all three. And again, the industry group isn't as strong, but I think we look at Arista as an institutional quality name with great fund sponsorship and really nice move off lows.

21:16And I like the way it's consolidating here. Yeah.

21:19Ken Shreve:All right, Ken. And, well, we have our Leaderboard Quarterly Scorecard webinar coming up tomorrow. Give us a quick little sneak peek, a little preview of what the team said. Yeah, well, we have been increasing exposure. We got that follow-through day, and we were lightly invested. So we're going to be talking about how we increased exposure. We're a little less than 70 % invested right now. We've been putting some names on the watch list. So we'll be talking about how we're handling this market. We'll be giving some color on how we went about filling out the watch list today. We'll probably be putting a couple names on tomorrow.

22:08We'll be giving some color on the current market and how we're looking at things. And if we plan on increasing exposure a little bit more. So it's just basically going to be a rundown on the first quarter performance, which was a solid first quarter for Leaderboard. It doesn't always go that way, but we'll go over first quarter performance, provide some color on the current market, and go over the watch list. So it'll be me, Justin, and Dave tomorrow, 1.30 p.m. Pacific time. And people can go to leaderboard.investors.com. And there's a banner right at the top of the homepage where they can register for free.

22:48We'll see you tomorrow afternoon, 1.30 p.m. Pacific time live.

22:54Ken Shreve:Great. Thank you so much for that. And a little shout out as we typically do on Wednesdays to this week's podcast episode happening at 5 p.m. Eastern today with Justin Nielsen. We've got Jack Kosar of Asbury Research, which looks at where the money is flowing. And right now at the beginning of this powerful market rally, I think that's the perfect time to be taking a look at exactly that. So thanks to Ken and thanks everyone for tuning in. We will see you right back here tomorrow.

23:53Ken Shreve:gives listeners a leg up in the world of markets and investing. From the Fed's moves to market bubbles, we dive into the biggest deals, key players, and business news ahead. If you're looking for more news and tools that you can use to help navigate the markets, consider becoming a subscriber to The Wall Street Journal. Visit subscribe.wsj.com slash takeontheweek to subscribe now.