S&P 500 Hits High, Nasdaq Leads Before Huge Earnings; BWX Tech, Vertiv, Ciena In Focus

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0:37Good afternoon, everyone, and welcome to Stock Market Today for Tuesday, January 27th, almost to the end of January. Can you believe it? But it is the Stock Market Today for Tuesday, January 27th. My name is Ken Shreve. On today's show, we're going to talk about yet another day of outperformance for fiber optic data storage and semiconductor equipment stocks that fueled another day of outperformance for the NASDAQ composite. Milder gains for the S &P 500 and the Russell 2000. Blue chips lagged quite a bit. Before we get into all that, let me bring in our news editor, Ed Carson, who, as usual, has got three stocks to watch.

1:20Good afternoon, Ed. Good afternoon, Ken. I want to take a look at BWX Technologies, Vertiv, and Sienna. Yeah. Very good. Three stocks to watch indeed. Before we do that, let's take a look at the index that outperformed by quite a bit today. The Nasdaq composite not to not to give short shrift to the S &P 500, which marked an all time closing high today. But let's start with the Nasdaq, because that's where all the action was today in tech land. And today, the NASDAQ composite ended with a gain of about nine-tenths of a percent today. Not an all-time closing high like the S &P 500, but five days of gains for the composite here.

2:06You can see nine-tenths of a percent. A nice day for the S &P 500, a much milder gain for the S &P 500. We'll take a look at the S &P right now. That was only up four-tenths of a percent, bumping right up against that 7 ,000 level. Only about 20 points to go to get to 7 ,000. That is an all-time closing high for the S &P 500. Russell, 2 ,000, milder gain. That was up just a little bit, two-tenths of a percent. That did halt a two-session slide. And then the Dow Jones Industrial Average, under pressure for most of the session, down eight-tenths of a percent. A big sell-off for United Health Group today, UNH.

2:51A lot of health insurers under pressure today. Lower reimbursement rates for a lot of these Medicare Advantage insurers. So a lot of these stocks sold off today. But, Ed, I'll tell you, it seems like every day the fiber optics data storage companies, chip equipment firms are selling off. We've got a lot of our earnings reports coming up, including tomorrow for a big one, GLW. That was a huge performer in the market surge at growth to 50 today. But another nice day for the NASDAQ composite, up five days in a row. It wasn't that long ago when the NASDAQ gapped below its 50-day moving average, but nice recovery here.

3:35Yeah, I mean, you know, for those who hold strong and maybe are reluctant to sell, that's worked out pretty well these last few times, because both times, you know, when we did this, you know, in December, one big drop through the 50-day line and then right back up again. It'd be great if we could finally clear all this area. And we did get the highest level since almost record highs. We're sort of clearing some of the short-term levels that really was having trouble getting through. It's just there's all these earnings coming up. I mean, tomorrow we have Meta and Microsoft. And while those companies aren't particularly doing great, their capital spending forecast, it's just going to be enormous.

4:11And you say like a lot of these memory names, including one that's tonight, memory plays are this week. We got some of the chip equipment leaders this week. A lot of the AI infrastructure names are this week. And those that don't report, they're going to get influenced by all these other names too. So that's the only downside. I mean, I think that there were definitely buying opportunities. It says how much do you want to take advantage of and be careful about how concentrated you are given the possibility of enormous moves in the next day or two. But nice action, nice action for sure to see the NASDAQ steadily climb and get above some key levels.

4:49Yeah, yeah. We're going to hear a lot about AI spending from Meta tomorrow. This one has really, really struggled up five days in a row, just like the NASDAQ. You can see that 200-day moving average. We'll see if that's going to be a resistance level or not. But Microsoft, a little more interesting. Microsoft is about ready to poke above some pretty serious resistance levels. It has moved above a lot of moving averages here, trying to get back above that 200-day moving average. It is still on a downtrend, just like Meta, but a big, big week of earnings. Like I said, the S &P 500 not up as much as the NASDAQ today, but that was an all-time closing high for the S &P 500 as well.

5:38Did see some interesting action in some of the growth ETFs that we follow. A nice day of outperformance for FFTY. That was up another – it did actually strengthen into the close here, up 2.3 % today. Ed, we've been seeing the IBD50 outperform quite a bit lately because it is heavily weighted in gold stocks, which have been outperforming quite a bit. ARKK has also been outperforming, but it lagged today. That was down actually one-tenth of 1%. But it was interesting to see FFTY. We've been used to seeing this thing go up because of its exposure to gold. But it was up 2.3 % today. But when you look at a lot of the big gainers in the IBD-50, it was nothing to do at all with gold today, which was kind of interesting.

6:30It does show you, like, again, there's still have to be, especially in tech world, there's things that can be looking great and others are not. And memory is doing great, the chip equipment, some other AI infrastructure. or a lot of those names are in the IBD50, including Vertiv, which we're going to take a look at. And then ARK, well, Tesla was down again today. That's its biggest holding. But then they have a lot of crypto stuff, which just hasn't done that well. And they don't have that much in the way of chips. I mean, I'm not saying they don't have any. But, you know, you can be in some areas that are growth areas.

6:59The NASDAQ can be doing well. And some days you outperform, sometimes you don't. And, yeah, so it's just interesting. Even among a couple of ETFs that you would sort of think are somewhat similar, They have very different makeups underneath. Yeah. Some of the big gainers in the IBD-50 today, outside of gold, applied digital, APLD. This is a data center operator, quite volatile. Yesterday did reverse lower below the 40 level. It did try to break out. That was up 14 % today. APLD, Rocket Lab, RKLB, another nice gainer in the IBD-50. I think this was up 8 % today, finding support at its 21-day moving average.

7:45ANAB in the biotech space. So a lot of nice cross-section of leadership in the IBD-50 today. This one's been getting support at its 50-day moving average. And then you mentioned data storage from Micron, which has been a big, big, big winner. So a nice cross-section of leadership in the IBD-50 today. Take a look at our equal-weighted ETFs. Breath, you know, not great on the NASDAQ today for a gain of close to 1%. We were positive by less than 2 to 1 on the NASDAQ today, and breath was barely positive on the NYSE. So here's the equal-weighted RSP. That was down just a little bit today. And then the equal-weighted NASDAQ 100 QQEW.

8:34And then I also wanted to take a look at IC. QQQE. Yeah. QQQE. Yeah, I think that's what you put up. Isn't that what I? Yeah, yeah. I think you said QQEW. Yeah. But yeah. Oh, sorry. And I also, I know some of the weakness in RSP and obviously the Dow, and one reason why the S &P wasn't up as much is because of those health insurers. I mean, the fact that the S &P was up at all, given that, and the fact that RSP really didn't give up much ground, there were some weaknesses, you know, some real negative things. Anyway, I'm sorry. I just want to make sure we said QQE. Yeah, yeah, yeah. Yeah, QQQE, equal weighted NASDAQ 100.

9:07And yeah, had a pretty good day as well, up 0.4%. And then also wanted to take a look at ICLN today. This was added to Swing Trader today. This is the iShares Global Clean Energy ETF, ICLN. Yeah, and they have a lot of solar stuff. And some of those things are plays that are like Chinese or even European. So there's some things in there that you may not be that familiar with. TAN is already extended. This one was still sort of in range. You know, I think at this time, if you really feel aggressive and you really want to play certain spaces, this is a way to play, you know, sectors that are hot without having that single stock risk, which is just so high right now.

9:54So it's just something to note. I will note that its number two holding is NextPower, which had earnings after the close. And that is working out, you know, working out right now. But you didn't know. You didn't know heading into it. That's just so this is that's another way to sort of hedge your bets. You know, when when so many stocks are coming out there, you don't want to be seeing everything go up 10 percent. But your stock is down 20 percent. That's no fun. And this is the second highest weighted holding of ICLN is NXT, correct? NXT. And number one is Bloom Energy, which is doing all right for itself as well.

10:32Gotcha. And NXT, they just changed their name, correct? NXT. Next Power. Next Power. Yeah, Next Power. Kayak gets my flight, hotel, and rental car right, so I can tune out travel advice that's just plain wrong. Bro, Skycoin, way better than points. Never fly during a Scorpio full moon. Just tell the manager you'll sue. Instant room upgrade. Stop taking bad travel advice. Start comparing hundreds of sites with Kayak and get your trip right. Bad advice? You talking to me? Kayak. Got that right.

11:11And they just reported earnings, and we see this stock is up nicely in after hours, up 9, 9.5%. Very good. All right. Well, we do have some stocks to look at right now. So let's start by taking a look at BWXT. This is tracked in the electric sector, electrical power equipment industry group that ranks fairly high in our 197 industry group rankings, number 33 out of 197. This looks like a pretty good technical setup, a cup base. It has started to drift lower above the 200-level BWX technologies. Talk to me about this setup, Ed. Yeah, nuclear components, you know, nuclear parts in there, and that's just here sort of like a little bit of the picks and shovels kind of thing in there.

12:07Some pretty solid growth. It's supposed to be a little, you know, slow down a little bit, I think, in Q4, but then improve again somewhat. Yeah, it sort of, there was a big run-up. And you could have bought it, maybe went through and above the 50-day line. But, you know, I get nervous when a stock runs up and doesn't pause exactly for this reason, because the stock fell, say, about 8%, 9%, which was fine. It was due for a pullback, but it just wouldn't have been much fun if I bought it at 2.19 to see it come down to 2.02 or whatever it did. So now, yeah, it's getting above these very – the last few days of trading.

12:42You could argue that there's a downward-sloping trend line in this high handle. So I think this is a place where people could have entered today. And especially given that, look, if all the AI trade goes negative, I mean, because nuclear stuff is still AI, you can't say, oh, well, who cares what Meta does? I'm going to buy this nuclear. No, no, this one, that could have a negative impact, but it's not directly on point as some of them. So this was above volume most of the day, above average volume most of the day. It did fade off, but pretty solid performance here. So, yeah, I think this was just a nice pullback after a big run-up.

13:23And here's a weekly chart that gives a slightly different perspective. Every time we look at a weekly chart, we like to see a stock that has shown the ability to trend higher. We like to see stocks that have shown the ability to muster very, very good gains. And BWX has definitely shown that ability. It has shown the ability to go on nice uptrends. It has based and gone on nice uptrends. It has based here, and we'll see if it can go on another nice uptrend here. But we look at the recent quarterly earnings and sales and a pretty good track record of growth,$19.4 billion market cap setting up at another base here.

14:05And we're in a pretty healthy market here. We'll see if this one can muster another breakout here. So pretty good technical setup. Taking a look at Vertiv here, VRT. This has been a big winner in the past. Start with the daily chart first here. Take a look at Vertiv, which made a nice move today, up 4.4%. Volume picked up the pace from yesterday. This is what we would call a double bottom pattern, a stock that has taken a little while to get moving here, But it did start moving today. No volume yet, but it did, like I said, pick up the pace from yesterday. Yeah, so nice price gain. It's the highest close in quite a while, you know, for a couple of months.

14:53Almost at the buy point. Didn't quite get to the 189.66 intraday, you know, buy point there. Yeah, we've been waiting for this. Some of the names, a lot of the names have come out. And some of them have not, but a few of them are trying to now. But we don't know. a lot of AI infrastructure plays are coming out in the next couple of days. How will that influence it? Then you have Meta and Microsoft, what they have to say. You know, then, you know, in a couple of weeks, Vertiv reports along with NVIDIA. So there's a lot of things coming in. So just keep that in mind. I mean, things, you know, there's just a lot of potential headwinds back and forth.

15:29It may all work out great. It may work out great. And this one just keeps flying from here. But it's just something to know. But yeah, nice action here. The growth is strong. So, you know, it looks like that will continue to be strong. But yeah, AI spending from others is going to be really important. But we've been waiting for this one to move. It's right on the cusp. It's just unfortunate. It's right around earnings season. But, you know, the market doesn't always make it easy, you know, for that reason. Right. Another strong industry group here. Vertiv known for its cooling solutions for data centers that tend to run very, very hot.

16:09So a lot of companies out there providing the cooling solutions, as well as a lot of other services for data centers. But Vertiv, another stock on the weekly chart that has gone on some very, very nice runs, a very sharp pullback here that served to shake out sellers. It started moving higher again, catching its breath here, forming another base. So we'll see if it can muster another breakout here. That is Vertiv Holdings,$72 billion market cap here, another big company here. And then we mentioned the continuous outperformance of the fiber optic stocks, which are benefiting greatly from the AI data center expansion.

16:55Take a look at Ciena, C-I-E-N. And look at the move this stock made last year, still holding near highs, setting up bullishly. C-I-E-N trades on the New York Stock Exchange. Yeah. And this is like, you know, when you look at stocks like Sienna or Google, going back to a weekly, just get that sense of like there's a switch. It's like the market goes, OK, we're just going to treat you. You're doing something different now because Sienna just seemed as this constant thing where it would break out and flop and da-da-da. You know, just didn't seem to get moving. And the earnings would be choppy up and down on a quarterly or yearly basis.

17:34But now AI has such this huge demand, it took off and really went going. And you can see the growth rates that are expected. That's really impressive growth. And some of those, the growth is supposed to get really strong after the comparisons start getting tougher. I mean, it's just like, so there is enormous growth when you consider that way. Because this is the kind of place, and it sort of seems like that with memory chips and other things where it's just like, yeah, yeah, there's boom, bust. It's never lasts. Now the market sort of feels like that. And so that's where you have this huge run.

18:08And I missed it, and I wish I had been more cognizant. But that sometimes happens. It doesn't mean, you know, sometimes, though, you look at model book portfolios. It's amazing how many of those stocks where, you know, the model book will show actually had already run up before quite a bit. Now, maybe not this much, but it's like you can see how this could easily go on another run. And there's plenty of stocks like that. Going back to it, you know, so it bounced off the 10-week line this week. It's sort of been finding support there. It's got an ascending base on a daily and a weekly chart. You know, on a daily, I think it was actionable today.

18:42It broke the downtrend of this sort of like the top, this top part of this ascending base. It's above the 21-day line. It's still relatively close to the 50-day line. The only issue is that, you know, Corning reports tomorrow, you know, like there's a lot of other names, Celestica, Amphenol, and not necessarily all the fiber optics, but, you know, there's a lot of names. Viav, you know, reports tomorrow. So there's just a lot of names that are in there and Microsoft and Meta. So that's the difficulty. Yeah, that's the difficulty. And the Fed meeting. I haven't even brought up the Fed. I mean, it's like, yeah.

19:20Normally, that'd be like, hey, watch out for the Fed. but it just seems like so down the list of things, especially for these other things. It really is kind of at the bottom of the totem ball at this point. Yeah, but that tells you something. That's like when you talk about the greatest players of all time, and it's like, well, I don't know if Shaq can be on the team. It's like, well, geez, you know, it's like kind of situation. So, I mean, Corning had some good news from Meta, but that, as reports, maybe the guidance won't be great for them. Who knows? And that could sink the sector, even though this is not as a fiber optic.

19:49So there's just a lot going on. Just keep that in mind. Just makes it really difficult because this was such a – the indexes were nice and the NASDAQ was nice and the S &P going up was nice. But there was a lot of bullish action. But it's like, boy, it's right ahead of so much news. So I think investors could have maybe, maybe should have added some exposure. But it is also very tricky in right now given all the news that's about to hit. Yes, yes. In the news on Corning today, they inked a big deal with Meta, multi-billions. Was it$5 billion,$6 billion? Something like that,$5 billion, I think, yeah.

20:26For fiber optic cable, for Meta's data center build-out, this is a deal that's going to be good through 2030. So Corning, big earnings report tomorrow morning. I believe that's going to be before the open. Amphenol APH is not tracked in the fiber optic. group, but APH is big into fiber optic connectors. So they are definitely fiber optic adjacent. They're going to be reporting before the open as well. And this is a stock that just broke out from a double bottom base. And look at the move this stock made today, 6.87, almost up 7 % today. And then we had a couple of earnings reports after the close.

21:12We had Texas Instruments. You First, Texas Instruments in the semiconductor group. TXN is making a nice move. This has been a laggard in the chipmaking group relative strength rating of 70. It has moved nicely off lows. That's making a nice move in the after hours, although you said the earnings report, not so great. There was a miss. Was it on the bottom line or the top line? It was on both. I mean, and their guidance was strong for the next quarter. But a lot of these analog chip makers have been doing better. Not necessarily. This hasn't even been the best one. So I don't want to get too excited.

21:49But that is part of it. One is that it feels like everything in chips is doing pretty well right now. So it's just something to note. And there may be some other names in the analog space that are doing better that also benefit from this. And then another big industry group that's very noteworthy this week. We mentioned the data storage firms. We had an important earnings report after the close, and that is from Seagate Technologies, STX. Let's see what Seagate is doing. That is moving a little bit. Looks like it's down 2.5 % in the early going. Seagate Technology, STX. What do we got here? Yeah, and they beat views pretty solidly, and they guided higher.

22:35Maybe it wasn't blowout. I mean, and the thing is, this has gone up so much. at some point. That may be what people are demanding at this point. And who knows? Who knows where this will end up? The numbers look strong. And so there wasn't anything on the surface, but obviously this has run up so much. It's had a solid week already, you know, just this week, let alone this year, let alone the past, you know, eight, nine months or so. Very good. All right. Well, busy, busy day of earnings tomorrow and Thursday. So a lot to look forward to. Ed, thank you as usual for your insight. We appreciate it very much.

23:17Thank you very much, Ken. All right. That'll do it for today. We've got a big show for tomorrow on IBD Live. I will be in the host share and we will be welcoming Mark Minervini back. Mark Minervini is a very popular guest from Minervini Private Access. He has won the U.S. Investing Championships a couple of times. He is an author and just a very popular and successful trader. So he'll be on IBD Live tomorrow. We'll be going on the air around 6.20 a.m. Pacific time, 9.20 a.m. Eastern time. If you haven't checked out the show, you can go to investors.com slash IBD Live and check us out for two weeks, and we hope you do that.

24:10So we look forward to seeing you there. Ed and I will be back same time tomorrow for another Stock Market Today video, so be sure to join us then. In the meantime, have a great afternoon, everyone. We will see you back here tomorrow. Take care, everyone.

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