Small Caps Lead Up Session, Some Growth Names Hit; Lumentum, Newmont Mining, Vertiv In Focus

0:00Ken Shreve:This podcast is brought to you by MassMutual. For 175 years, MassMutual has stood for strength and stability, helping people secure their future and protect the ones they love. Learn more at MassMutual.com. That's MassMutual.com.

0:25Ken Shreve:Good afternoon, everyone, and welcome to Stock Market Today for Thursday, July 10th. It's Alyssa Coram here. And small caps leading the day with some growth stocks struggling. Here now with all the details is my colleague, Ken Shreve. Ken, what do you have for us today? Yeah, for as many growth stocks that struggled today, there seemed to be an equal amount that were trading pretty well. So we'll talk about that in just a little bit. But three stocks to talk about today, Allie. Let's take a look at Lumentum, L-I-T-E, a name that we don't talk about very often, but this is a data center adjacent play.

1:03Also in the gold space, Newmont Mining, N-E-M, and finally also data center related, VRT, Vertiv. All right.

1:12Ken Shreve:Sounds like a plan. Let's get right to it because you have a leaderboard scorecard webinar to get to, Ken. Yes, indeed. But first, let's take a look at the major indexes. The Nasdaq fractionally higher on the day, up about one tenth of a percent. Meanwhile, the S &P 500 up three tenths of a percent on the day. The Dow up four tenths of a percent. And stronger still was the Russell 2000, up about a half a percent heading into the final stretch of the day. So green across the board here, Ken, and seeing a lot of strength, maybe some pockets of weakness underneath the surface, as you mentioned. But overall, it still seems like we're in a healthy market here at highs.

1:52Ken Shreve:How can we complain? Can't complain at all. I totally, totally agree. NASDAQ closed up near its high. It wasn't a big gain for the NASDAQ today, but it did close up near its high. It looks like another all-time closing high for the NASDAQ. And the second day in a row where you had volume pick up the pace a little bit. So another constructive day for the NASDAQ. We did have some weakness below the surface. But overall, I think you'd have to call today another positive constructive session. All right. Let's quickly go through the other major indexes. Here's the S &P. Yeah. Another all-time closing high for the S &P 500 as well.

2:38has a very similar look to the NASDAQ here. Volume wasn't heavy yesterday when it moved higher and it fell again today. Not that big a deal. This is an index that is uptrend looks just as strong as the NASDAQ's at this point.

2:55Ken Shreve:And here's the Dow. The Dow holding above the 10-day moving average really, really came back to life. Nice bullish move above that 44 ,000 level, holding above short-term support levels in an uptrend as well. And the Russell starting to participate in a more meaningful way, perhaps. In a more meaningful way, no doubt. You can still see it's still far off its all-time high of 24.66. But when you look at that two-week move for small caps, there are a lot of different stocks participating at this point. So small caps definitely showing signs of life here. Yeah, perhaps getting their mojo back, recently outperforming the S &P here.

3:39Ken Shreve:And when you have a bull market, you want to see increasing participation. So we like to see this. Hopefully it'll continue. You mentioned growth stocks, a bit of a mixed bag, Ken, it sounds like. The FFTY ETF down 1.5 % today, still in a very strong uptrend. It's been outperforming the S &P since the lows in April, but it hasn't been a smooth ride. Some days have really tested traders. Yeah, I mean, still respecting the 21-day moving average. You can see a couple of weeks ago where it reversed higher off the 21-day line. That was a good show of support. But you've got three days out of the past seven trading sessions where you've seen this ETF really struggle.

4:29There was one day when it was down 2 % or 3%. That was maybe five or six days ago. Yeah, right in that day there. So 2.9 % decline in heavy volume. And then, you know, today and the day before yesterday, you also had a kind of a close near lows here. So growth stocks starting maybe to look a little bit vulnerable. But, you know, overall, looking at sell signals, Maybe we saw a few today, but all in all, growth stocks continue to look pretty good. Today, I mean, we did see some leaders break below their 50-day moving average. That wasn't a good sign, particularly in the security software group.

5:10You look at a name like Palo Alto Networks, P-A-N-W. This is the kind of action that we're looking for to just kind of gauge market health here. I don't think Palo Alto Networks is the big leader in the security software group, but it's a widely held name. Look at a name like Fortinet, FTNT. This was the worst performing industry group today, the security software group. This is a break of the 50-day moving average. And you had lots of other leaders that didn't break their 50-day lines. That came below their 21-day lines for the first time in a long time. So starting, you know, seeing a little weakness under the surface, but not time to head for the hills yet.

5:50We've been playing it pretty conservatively in terms of leaderboard. We took profits in one name today, but still holding strong with 15 stocks, just recognizing a little bit of increasing weakness underneath the surface here.

6:08Ken Shreve:Yeah, well, looking forward to all the details from you and the leaderboard team coming up on our leaderboard scorecard webinar at 4.30 p.m. Eastern. We're looking forward to getting, again, all the details on performance over the most recent quarter, some of the winners that you guys have had. Yeah, it's going to be a good one. They always go by quickly, always have nice attendance. So yeah, we'll be going over second quarter performance and taking a look at current holdings and of course, giving our thoughts on the current market. Okay, well, we'll hustle here through the rest of our agenda on today's show.

6:43Ken Shreve:IBIT, Bitcoin ETF here, breaking out, following Coming up on the setup day that we saw on Wednesday, Ken, full disclosure, I do own this. Yeah, we looked at that heavy volume move yesterday. It kind of crept over some recent highs. There was good volume and had the look of a setup day. This means that we just felt like the ETF here had a chance to follow through today in this healthy market. And so we actually took the opportunity to increase IBIT yesterday. We just increased it from a half up to a three-quarter size position. That move paid off today. You had a nice little breakout here. 63.70 is the pivot on this latest base and closed less than one point above that.

7:34So you can still see holding well in the 5 % buy zone here. All right.

7:38Ken Shreve:Let's talk about those stocks to watch that you mentioned, Ken. 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. Learn more at federatedhermes.com slash US. Investments are subject to risk and may lose value. Here's Lumentum, L-I-T-E, up 2.4 % today. A great uptrend off the lows. This is one of the stocks that's doubled off of its lows and now consolidating or at least starting to, Ken. Yeah, Tract and the Telecom Fiber Optic Group. So this company has optical photonic products that are very, very ubiquitous in data centers, just helping with the transmission speed.

8:25and data centers are known for moving data very, very quickly. Lumentum's products are used in data centers, really ubiquitous at this point. So not surprising to see the stock rallying along with other sort of data center adjacent stocks. This is a really nice handle forming here. You mentioned that strong move off lows, went from 45, more than doubled. And now it's just kind of drifting lower here, finding support at the 21-day moving average. And this is really a classic-looking handle. So it gets a little bit of sellers getting shaken out of the stock here. But this is potentially setting up for a nice breakout, possibly over the 100 level.

9:09So let's have this on the watch list, and we'll keep an eye on it.

9:13Ken Shreve:Next on the list, let's check out Newmont NEM. This is in the gold-silver gems mining. industry group can. Yeah, I want to, if we could just go back, I have one more thing I wanted to say about Lumentum real quick, IT and the weekly chart. Just wanted to take a look at the fundamentals here, because this is really what a turnaround looks like. You can see several quarters in a row of declining earnings and sales, but you can see revenue growth has really picked up the pace in recent quarters. And then looking forward to the second quarter, third quarter, fourth quarter, really seeing nice growth here.

9:49So you've got a pretty decent technical setup, nice handle forming, and what looks like a pretty compelling turnaround story in a company poised to take advantage of this growth in data centers.

10:00Ken Shreve:All right, let's get your quick thoughts on Newmont here. Newmont Mining. Yeah, well, we saw a lot of volatility in gold stocks earlier in the week. You have many leaders in the group that are still kind of trading around their 50-day moving averages. But Newmont is really, to me, acting as one of the best performers in the group and the stock that's acting the best right now. If we just look at the daily chart for Newmont, this one never really never came down to test the 50-day moving average. It's been kind of holding tight here, just below the 60 level, holding support at the 21-day line. And I think This brings a possibility of a breakout try over the 60 level into play.

10:43So again, Newmont at a time when a lot of leading gold stocks are kind of struggling near their 50-day lines. Newmont never paid a visit to its 50-day line. It's still holding strong near highs here.

10:55Ken Shreve:All right. And last on our list, let's check out Verti VRT today. What a wild day. finished down 6%, but well off of its lows, closing right around that 21-day line as well. This is a stock that's more than doubled off the lows. But what a test today. I think there was news for this AI play related to Amazon Web Services. And so creating some concern for investors, at least temporarily, Ken. Yeah, this is a company that specializes in basically cooling down data centers, which tend to run very, very hot. So this has a kind of liquid cooling technology that is in very, very strong demand. But this is just an example of the volatility that we saw in some growth stocks today.

11:43Vertiv did show a lot of strength today, though, because that was a sharp drop down through that 112 level, but it was able to rally back. And then you can see on the daily chart, it closed well off lows. So the message here today was that even though there were big sellers in the stock, there were buyers around that liked the stock price down near that 50-day moving average, lifted it off lows. So, you know, another name to watch here is good to see support hold and good to see buyers come in and support the stock today. Just kind of watch it for a bit longer, see if it can tighten up around here.

12:22but good to see it find support where it should have today.

12:25Ken Shreve:Absolutely. All right. Well, if you are a leaderboard member, go on over to leaderboard.investors.com. We have our quarterly scorecard webinar coming up very soon. And Ken and the crew are going to see you there. So thanks so much, Ken. And thanks everyone for tuning in. That's it from us for today. But again, we'll see you over at our leaderboard scorecard webinar, leaderboard.investors.com. click on the top banner message to join the quarterly scorecard webinar. And we'll see you in the morning on IBD Live. We're going to be joined by special guest, Eric Krull, co-author of The Lifecycle Trade.

13:04Ken Shreve:We'll see you there. And then as always, we'll see you back here tomorrow after the close.

13:47Ken Shreve:Thank you. at Medline.com.