Stocks Hit Highs On Nvidia Optimism. Quanta Services, CrowdStrike, Figure Technology In Focus.

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0:35Good afternoon, everyone, and welcome to Stock Market Today for Wednesday, October 8th. My name is Ken Shreve. I'm a senior markets writer for IBD. Looks like more all-time highs for the NASDAQ composite and S &P 500 today. NASDAQ ends with a 1.1 % gain. Before we talk about the market and this strong uptrend, Let me switch over to our news editor, Ed Carson, who has got three stocks to watch for today. Good afternoon, Ed. Good afternoon. Want to take a look at Qantas services, CrowdStrike, and Figure Technology. Okay, very good. Well, let's go ahead and just look at the market here to start. We'll take a look at the – well, let me relaunch my chart here.

1:27And I do think that one of the big movers of the day was that before the open, NVIDIA CEO Jensen Wong, as he has been for the past couple of years, was very bullish about AI and, you know, talked about demand being substantially higher than six months ago. So, you know, that seemed to be a positive. And really, you know, when you think about the market, the markets sold off a little bit yesterday on a negative Oracle report, but found support at the 10-day line. So it sort of shrugged off resilient to bad news and quickly rallies on good news. I mean, that's a pretty positive sign for – that's a sign of a healthy market.

2:07You don't have to be too bright to realize that market at record highs is a positive sign as well. But the NASDAQ and S &P both did that today. So, you know, if this were a bad market, you could have easily seen the market sell off really hard on the Oracle news and then not really bounce back much because like, ah, NVIDIA always says that. It's like, what did he say? So just a lot of strength in this market. I know the Dow was flat to slightly down, but advances led to climbers by a substantial amount. So it felt like a broad, strong rally today. No doubt about it. Another all-time closing high for the NASDAQ composite.

2:45I mentioned that index up 1.1%. And this was an accumulation day. Volume picked up the pace nicely from yesterday above average. Let's take a look at the S &P 500. And again, Ed, you mentioned sentiment was positive early. There was an interview with Jensen Wong on CNBC this morning. It was wide-ranging. He was on the air for quite some time, very polished and mentioned several AI companies also doing well. So that just fueled a nice rally for AI stocks today. S &P 500 not up as much as the Dow, up six tenths of a percent. Not nearly as much volume on the NYSE today as the NASDAQ. But again, just a lot of volume rolled into a lot of AI stocks today.

3:37Small caps. Let's check on IWM. Up close to what the NASDAQ was, not an all-time closing high, but still holding above short-term moving averages. And then the Dow lagged just a little bit, but holding strong near highs here. Gave back some early gains. Still holding the 10-day moving average. So, you know, Ed, looking at the NASDAQ, you'd think after such a strong price move after that breakout over$2 ,200, it's amazing to see the NASDAQ's, you know, 5.3 % above its 50 -day moving average. You know, not the time to be alarmed, but we do like to look at where the NASDAQ is in relation to the 50-day line.

4:23Still not looking extended yet. Yeah, it's probably right on the cusp of being extended, but you can definitely get more extended. And all it would take is like if it fell 0.5 % tomorrow, it would be significantly below 5 % because that 50 days trying to catch up. Yeah, it's like if it gets up to 7%, 8 % and you can go further than that. But if it goes that then the odds of a pullback start rising, the odds of the pullback would be larger rise. But that doesn't mean it has to, you know, it's just something to keep in mind. And there's always the possibility that, you know, all these circular AI deals, it all seems to be this virtuous circle, but that could turn vicious.

4:57I mean, I'm pretty heavily invested. I'm bullish on that things. I'm looking at the market. It's telling me good things. But if the market tells us something different, we have to react. But right now, everything looks really, really good. Yeah, yeah. No doubt about it. Big piece of data tomorrow morning. You've been talking about this on IBD Live. Ed, we've got monthly sales figures for Taiwan Semiconductor. This is the world's largest chip foundry, which counts all of the largest technology companies as customers, including NVIDIA, AMD, Broadcom. Do you think what they say about sales could be a market mover?

5:39I mean, it could be a market mover. I think the bigger deal will be, obviously, next week when they come out with earnings, because then we'll get more guidance. Because we know that AI demand is strong right now. Nobody dismisses that. OK, there's a lot of chips being made and chips being sold right now. So the question is, what will they say going forward? What will they say about, you know, you know, about capital spending? But yeah, Taiwan Semi is acting very well. You know, it's really been a strong performer over the past several weeks without any special news driving it up. Look at the last four quarters of bottom line and top line growth.

6:14I mean, this is called acceleration, right? End of 2024, their earnings were 47 percent. Three months later, 54 percent growth. End of the second quarter this year, up 79 percent. Revenue growth accelerating as well. So, yeah, monthly sales tomorrow morning for TSM. And then along with financial stocks, they're going to be kicking off third quarter earnings season next week. You mentioned the breadth in the market, Ed. Breath was strong all day. This is the equal weighted version of the S &P 500, up three-tenths of a percent, a little less than what the S &P 500 gained today. Take a look at QQEW on a strong day for tech stocks.

7:05That rose mostly in line with the NASDAQ composite here. We've been talking about the outperformance of growth stocks for some time now. Another great day for the innovator IBD50 ETF. This is just a really, really strong move today, up more than 3%. So just growth stocks really, really doing well here. Let's see. We also have semiconductor stocks mentioned, the NVIDIAs and the Broadcoms and the AMDs, all moving on AI prospects. The VanEck semiconductor ETF also outperformed the NASDAQ by a wide margin today, up 2.7%. IGV, which is sort of the software ETF, has a lot of enterprise software names in here.

8:01This is still kind of floating in a buy area here. That blue shaded area is the 5 % buy zone from the handle buy point right here. So this is not too extended, still holding firm in a buy zone. cybersecurity stocks. Talk about CIBR for a little bit here. Yeah, we're going to talk about one of them later on, but there were a number that made strong gains. And some of them did not have good days yesterday, but they found support. And this was strong. And just with IGV, there's some laggards or stocks that aren't that moving as well. And so it can be a little diluted, but there were definitely software names, including cybersecurity, strong.

8:46And this was right in the buys area. So if you're not sure which one to buy. This was a nice move here, and I believe that Swing Trader added CIBR late in the day today because of its strong performance. CrowdStrike, a big name in the cybersecurity group. Here's a stock trying to break out of a cup with handle base here, 50720. Entry point closed almost three points, not quite three points above that buy point. You can see volume higher than the prior session. So CrowdStrike looking pretty good in the security software group. Gold stocks were very, very strong early. Here's a look at GLD. It has been on a monster move.

9:30Very, very extended. This green shaded area up here is just pointing to the 20 % profit zone from this last breakout area here. So getting to a point, a lot of our research shows that when an ETF or stock rallies 20 % over a period of time after a base breakout, that's usually the time they start to pull back and consolidate. So GLD almost hitting that 20 % profit-taking zone. And Bitcoin has been on a tear as well. Strong move for Ibit off of the 50-day moving average. It is still holding very close to a 69.89 entry point here. WSJ's Take on the Week gives you a leg up on the world of money and investing.

10:17We cut through the noise and dive into markets, the economy and finance. I'm Telus Demos. And I'm Miriam Gottfried. We break down the big trades, speak with the key players. And find out what's important for investors in the week ahead. Subscribe to WSJ's Take on the Week wherever you listen to podcasts. All right, let's take a look at Power, PWR. This is a name that the leaderboard model portfolio is very familiar with. Qantas Services, provider of construction services, electrical infrastructure for data centers. Beautiful, beautiful breakout here. Yeah, and I think there was an early entry around 400.

10:56Just sort of steadily rose there. But today was, I like the volume. I actually like the action it had around the buy point because it gave a little bit of time for at least the 21-day line to catch up. The 50-day line didn't make a whole lot of progress over the past week. But it just sort of like that. I like that pause because I like pauses. I like handles, you know, just to get that kind of situation rather than straight up cup bases. Though cup bases without handles can work just fine. But just came down to the 10-day line, like a lot like the indexes, you know, bad news, no big deal, good news.

11:29That's great. And, you know, NVIDIA talking up that AI demand is there. Well, the Qantas services helps build power plants, which help power the data center. So it all is part of that. Definitely an AI play, the relative strength line. Moving back toward highs, it's not quite there. But basically anything that's basing is not going to be at a high, which is, you know, I'm not going to get too upset. It had a prior uptrend. It's pretty close. It's right there. It's right there. It's right. Yeah, it's right there. I mean, it's, you know, so maybe it didn't quite get there, but it's really strong.

12:00And, you know, it's like so a lot to like that. The numbers are like solid growth. You know, it's not going to be it's not going to be these triple digit gains, but it's a really solid performance has been for quite a while. Sometimes with the really strongest breakouts, you'll see this relative strength line leading a stock into new high ground. In other words, there are there are S line, which compares the stock's price performance against the S &P 500. It hits a new high before the stock does. And that sometimes can alert you to a technical breakout that could have, you know, even very, very good strength.

12:33So, Qantas Services didn't lead it into the new high ground, the relative strength line, but still up near highs. And, you know, solid breakout today. Volume nicely higher from Tuesday. And again, just a company with a compelling growth story. You can see last two quarters of 20 % plus bottom line and top line growth. So, Qantaservices, a good name. Take a look at CrowdStrike, which I mentioned prematurely, but nice early breakout here. Now, this is interesting because this is a breakout where the relative strength line is really kind of lagging here. It's not a deal breaker, but you can see compared to Qantaservices, relative strength line isn't as healthy.

13:21But again, you know, a deal breaker, maybe some people would pass, but this still looked like a good heavy volume breakout today. Yeah, and it's tough. Yeah, a little bit deeper, a little bit longer consolidation. So it's just, you know, in a market that's been rallying so strongly, rising with a 10-day, 21-day line, it's hard not to. So we're, you know, that's what's going on there. CrowdStrike's fundamentals aren't as good, but that's probably because of the year ago comparisons are still dealing with that year earlier power outage. So the outlook is for stronger growth, you know, in fiscal 2027, which starts in February.

13:56So it's supposed to turn around. I liked yesterday's move. And ultimately, I mean, didn't necessarily like it when it was at the lows. But, you know, it came down to the 21-day line, found support. So there was a little bit of a shakeout because this handle, I mean, it was definitely down for a while. But then it was sort of wedging up. But that provided one last shakeout. So I like that. But it didn't, you know, so there was that. And so nice move today, higher volume after sort of drying up in the handle. And I guess I would also add if you're not – yeah, go ahead. No, go ahead. Just I know you finished your thought.

14:29I was going to say, and if you're not, and if you do, and I understand why somebody's like, well, the relative strength line isn't strong, or the fundamentals, yeah, maybe they'll improve, but I'm not that sold right now. You can look to other names like Zscaler, which also showed real strength today. and or just or as we looked before i mean that one's sort of an early entry sort of a quasi it's not a handle but you could have used that as that an entry real strength line isn't great on that one either or cibr i mean cibr is as we looked at earlier i mean that would be another way to play it uh so you know you don't have to you know which is also a positive sign just the fact that there's these other opportunities that's not just one stock in the group that's doing well there's a number that are showing some strength.

15:10Very good. Very good. Take a look at FIGR Volatile. It's a new issue. They priced several weeks ago at$25. That was well above the proposed range of$20 to$22. Stock trading at$49.17 right now. Stock tried to break out yesterday, gave back those gains, but a really solid close near highs today, Ed. Yeah, this is classic IPO action. I mean, full disclosure, I've got into this probably around 41. I didn't add to it yesterday, and I didn't add to it today. I mean, I'm happy I didn't add to it yesterday. I'm sad I didn't add to it today. But there's this nature that can happen. When it goes up traditional buy point, there's often this kind of action.

15:54And sometimes it'll go up in reverse, and then it'll go really down. It doesn't have to come right back up. If it didn't, then there'd be no reason to worry. But really powerful. We still haven't gotten an earnings report. But yeah, I think this is just something to watch for. It's sort of the rule, not the exception, that you have this kind of real volatile behavior around a buy point. And honestly, it's tough. I like getting at least starting a position early, you know, to try to do that. But it's IPOs can be really powerful, but obviously they are really they're tough to handle. And I've been shaken out of plenty of them.

16:30Pretty, pretty compelling growth story here, too. even though they haven't had their first report as a publicly traded company. We can go back and now that they're public, just take a look at recent results. First quarter earnings up 93 percent. In the second quarter, they doubled profit with revenue up 31 percent to 106.1. And this is a company that apparently leverages blockchain technology. and one of their bailiwicks is home equity loans that they offer lending via the blockchain. So interesting company that is showing pretty good fundamentals here. Talked to a trader this morning on IBD Live that nibbled at a figure when it crossed the 40 level.

17:19That's probably the early entry when it moved above its short-term moving average there. So nice entry. leaderboard model portfolio nibbled yesterday when it broke out of this IPO base. Disappointing price action by the close. It was up, you know, after we added it, it was up 7 % from the entry, and then it gave most of that gain back by the close. But, you know, good to see the stock bounce back up 11 % today and a close near session highs. All right. Well, that's going to do it for today's show. And again, a reminder, Taiwan Semiconductor, monthly sales tomorrow morning that could could move AI stocks.

18:06They've been, I know in July, I was just checking their revenue was up 26%. In August, the last time they reported that growth accelerated to 33.8%. So pretty much since the start of the year, Taiwan Semi has been reporting very, very strong monthly revenues. And we talked about their strong growth as well. So we'll see what they have to say tomorrow. Ed, as always, thanks very much for the insight. Appreciate it. All right. That'll do it for today. Tomorrow, it's going to be Ed and Alexis Garcia in the chair for the SMT video. So we appreciate you watching and be sure to join us on IBD Live. Had a great show this morning.

18:52We talk about the market, actionable stocks for about an hour and a half from a little before 6.30 a.m. Pacific time. And we go to about 8 o 'clock in the morning Pacific time. So if you haven't joined us, go to investors.com slash IBD live. That'll do it for today's show. Thanks a lot for watching and we'll see you tomorrow. Bye bye.

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