Stocks Jump On Iran Hopes; Kiniksa Pharma, Quanta Services, Sandisk In Focus

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0:39Ed Carson:Good afternoon, everyone, and welcome to Stock Market Today for Tuesday, March 31st. It's Alyssa Coram here. And some big moves in the market today with hopes at the Iran war. And that's always a good sign. We will take it. But there's more that we need to see in the market. And joining me now to discuss that and more is my colleague, Ed Carson. Ed, what do you have for us today? Yeah, good afternoon. I would like to take a look at Canixa Pharma, Quanta Services, and SanDisk. Okay, we'll take a look at those stocks. But first, let's take a closer look at the major indexes and the powerful gains from today's session, Ed.

1:19Ed Carson:We saw a lot of strength out there. The NASDAQ on the day up 3.8%. Meanwhile, the Russell 2000 with a gain of 3.4 percent on the day. The S &P 500 had a gain of about 2.9 percent in today's session and the Dow with a gain of two and a half percent. So tell us what was driving the gains today, Ed. Yeah, President Trump signaled that he's looking to get an off ramp from the Iran war, even if that means the Strait of Hormuz remains somewhat closed. I mean, that would cause its own issues. But I think all traders were looking ahead to, you know, the idea that you could end this without what could be a very bloody, you know, operation.

2:06You know, there's just a lot of excitement there. I mean, oil prices are mixed and we'll get to that in a little bit. But this is really nice to see. I mean, we've had some big gains, but this was the best gain in quite a while. Is this the start of something? Maybe it is the start of something. I think that's the question to have to see. If this really has legs, well, it's going to keep on building momentum. So investors should be sharpening their pencils on their watch list at the very least. Exactly.

2:31Ed Carson:Because I think the other big question is here, OK, well, this is a great first step, but what do I do about it in my portfolio? Right. I think when traders just see the headlines of Nasdaq up 3.8 percent or Dow up thousands, you know, over a thousand points. Right. It can be very exciting. but it's key to temper that enthusiasm, right, Ed? I mean, we know that in past corrections, you can have some of the biggest up days, but the correction can still worsen. Like you said, maybe we did find a bottom, but what should traders be doing in addition to making sure their watch lists are fresh? What should we be looking for in the market?

3:16Yeah, I mean, in a few days, and it wouldn't be until next week. I mean, the market that we shut down after Thursday, next week we could have something like a follow-through day. And that's when if a rally attempt continues for a few days, then you want to look for a day where one or more of the major indexes rises at least 1%, hopefully more, and on higher volume than the prior session. Now, again, with this headline-driven market, I think you'd really want to see that and you want to see even further confirmation. But that's the first clear sign, okay, maybe we really have that. And we really haven't had this for several months.

3:52And we've come close, but we haven't really gotten that. So that would be a few days away. And again, if this is going to be a real uptrend, you might say, I can't wait. I can't wait. It's like, you probably can. I mean, it's like if this is going to go on for six weeks, six months, there's going to be opportunities if you just wait a few sessions. So that's what people need to wait for. We'll see. I mean, just to be clarified, President Trump has given a lot of opinions about the Iran war and a lot of comments about the Strait of Hormuz specifically. So he could change his mind. So, I mean, I think that investors have to be ready for a lot of volatility.

4:30Again, really nice to see. I mean, it was a lot more fun today than just looking at that rather than all the red we've been seeing. But we haven't broken the downtrend. We haven't really changed anything.

4:42Ed Carson:So we're looking for that follow through day, a little bit of traction here in this rally attempt. And we want to see progress above the moving averages, right? That green line, that's the 21 day. Let's get a close above it. Let's get the lows above it. And that 200 day line as well. And eventually the 50 day. That could take some time, Ed. But traction above those moving averages, I think, is also key. And to your point about it being a news-driven market, what I can do with these charts is I can actually scroll back to a past market. Let's take a look at last year, kind of right around this time, Ed.

5:26Ed Carson:We saw a news-driven market, different circumstances, right? But we did have a big update in the market. Let me track price there. On 4.9, we had a huge gain in the NASDAQ, up 12 % on the day. But that wasn't the all-clear signal, right? We did have a little bit of a shakeout. And then it was after that that we had a follow-through day that we got above the 21-day line. So, you know, having a knee-jerk reaction on a big up day, maybe sometimes it can pay off. But I like the IBD strategy. Yeah, I do too. And I think it's a really good point about how, yeah, we had this powerful rally off the April bottom.

6:11But if you bought near the top on that day, you could be really down just a week later. And yes, it all worked out, but it was not at all clear when we went down to the bottom. That was giving up a lot of the gain, that huge gain. So we'll just see. And I guess another thing is that, look, if the rally starts moving up toward moving averages or stocks move up to moving averages and then the rally loses steam, this current one, that could be an opportunity to sell some stocks that if you just held on to them and it's like, I should have sold it, I should have sold it, it might be an opportunity to get out.

6:43So I'm not saying that's what feels like. Maybe we'll just blow through everything. and you want to be buying, but it's possible if this rally, this bounce fades, that could be like a last chance to get out of some things. Again, so we'll just have to see. Hopefully things pick up steam, but it's just been one day.

7:03Ed Carson:That's such a great point because we could hit resistance and see another leg down or it could be that V-shaped recovery type situation. And I think that's what makes these market turns so tricky. So a gradual approach, I think, is the way to go versus that all or nothing type of mindset. And when you do go in gradually, have your stops, right? Not only for the individual stocks, but also the market. Is the market continuing to make progress or is it continuing to deteriorate? And I mean, that's what we've been seeing over the last couple of weeks, right, as we just haven't been able to hold any levels whatsoever.

7:46Ed Carson:So can we start to do that? I think that would be a really good thing to see the market, of course, Ed. And, you know, we have these continuing headlines. We don't have a clear cut resolution, but we do have some positive headlines that traders are definitely trading off of right now. Absolutely. Okay, moving on. Let's take a look at the S &P 500 because we're also very focused on what that index is doing, getting above that 6 ,500 level here, but still below the 200-day, still below the 21-day ed. Let's also check out RSP. This is the equal weighted S &P 500. So a notable level that this is getting back above today.

8:40Yeah, nice to see this back up with a 200-day line. Obviously, it has a lot of things to do, but nice to see that because I was like, oh boy, you know, because RSP was leading for so long. And to see that one break down over the last few weeks was really, really discouraging.

8:54Ed Carson:Okay. Let's also take a look at XBI. So underneath the surface, what's looking interesting? thematically. And that is definitely the biotech area, right, Ed? Up 7.5 % today. This has been on our radar, right? We are focused on that relative strength. That pointed us in this direction, among some others. But this is an area that had been holding up better than a lot. And today, definitely showing that outperformance in a big way. Yeah. If this had been a stronger market, I might have jumped on this. I was just I just don't know. And you can see, and it's something David Ryan, our special guest on IBD Live, was bringing up today, just about how many times we've had these moves and then it rolls over.

9:41Yes, over time, it's gone sideways. But if you're buying on strength, it would have been easy to have some sell-offs and a big whipsaw action, even though overall it's sideways, relative strength line doing well. It's still been tricky in this situation. So definitely one to watch. This is why you want to be looking for stocks and ETFs that are showing that relative strength. You know, I understand that some people want to make pilot buys and you can do that. You just have to be really nimble because you can see how quickly these gains along the way have vanished. But, yeah, you want to be looking at these things, even if you don't want to be pulling the trigger right now.

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10:56Ed Carson:This is Conexa Pharmaceuticals up 5.4 % on the day, Ed, and a very strong, solid uptrend here that goes back for about a year. Yeah, and this is, you know, really turning into things. It's becoming profitable. If you go on a weekly chart, so it's almost got a flat base. But, you know, so if you look, it needs the end of the week for a flat base. But it's also got, I believe, a four weeks tight already. So it sort of cleared that area already. It cleared the bulk of this. This might have been a closing high. I didn't see how it quite closed, but very strong. So again, I understand if somebody wanted to take advantage of this, okay?

11:40I mean, it's like because it's giving some buy signals. The relative strength line is high. It's in a hot area or a resilient area at the very least, turning profitable. So a lot of reasons to like. It doesn't have a ton of volume. So I think that may be one reason why it's so whipsaw. But it's just the only issue is just about, hey, if the market sours, this is just likely to have that volatility. It may hold up well. It may outperform. But you can outperform and still fall, especially after a big gain like today. If this one is flat for the week and you bought today, well, you're down 7 percent.

12:15You know, from a stepping back perspective, it looks fine, sort of, but not good for you. So, again, that just makes it tricky. But boy, this is this is the kind of things that medicals and biotechs are doing pretty well right now.

12:29Ed Carson:Yes. And just to underscore your point on the fundamentals, looking at the most recent couple of quarters, seeing some acceleration in top line growth from 44 percent to 61 percent to 65 percent. And then on the bottom line, we have a number of quarters here, Ed, with triple digit earnings growth. So not only does it have that outstanding relative strength that we want to see, hot area to your point there, but also the solid fundamentals. We like seeing all those boxes checked. And moving on, some power in PWR, perhaps. Well, we want to see a bounce off of that 50-day, 10-week line, perhaps the start of that here with a gain of 2.9 % on the day, Ed.

13:21Yeah, we saw a lot of AI infrastructure stocks and other stocks bounce off the 50-day line today. So, again, there are a lot of stocks that should be on watch lists, a lot of stocks finding support, showing relative strength. So, you know, your watch list can be pretty full, even if it's just, again, watching. I'd like to see it above the 21-day line and maybe even the 10-day lines, you know, because it got up to there. And it wasn't an inside day, but it didn't get above Monday's high. So even in a good market, I probably wouldn't have wanted to – personally wouldn't have wanted to buy it here, but just a little more strength.

13:56And, again, I guess that would be a place where if we continue to move and it's day two, day three of a rally and it goes above there, You can feel a little more confident about doing a pilot position on this or one of the many others that showed similar action today. But just be ready to back away because it's like everything else, even though it hasn't, you know, I've seen a lot bigger moves out there, but it doesn't take a whole lot to see this go down 4 % or 5%.

14:24Ed Carson:Yeah. Yeah. And another reason why we like these pullbacks to the 50-day line, well, a couple of reasons. That's often a key level of support for leading stocks as they make their big run-ups. But it also gives you a level of risk, right, to place your stop. So if you're looking at that 50-day or even the reversal low, that's a good lower risk exit area versus something that is stretched far and away above the moving averages. Our team likes to point out it's hard to know when you're wrong in that type of scenario. So if this is that guardrail, well, you're lying close to the guardrail. Yeah, I think that's a good point.

15:12And I also think that in a downtrend like this, there are not too many bases because stocks are. So, I mean, OK, there's been some stocks. I mean, there are going to be some. But generally, you're seeing a lot of names that, you know, even the resilient names that came up. But in the last week or two, they've been falling back. So not long enough to get it. So the pullbacks are where the buying opportunities might be in a lot of these names. They just don't have bases, which is, you know, not the worst thing. You know, it shows that they actually held up for quite a while. So I think in this scenario, you want to really be looking for a lot of these 50-day, 10-week line pullbacks.

15:48Ed Carson:All right. Well, another stock that's in a similar scenario here is Sandisk SNDK. It did on the prior session have an outside day downside reversal. So this was, even though it was up at 11 % on the day, it was still an inside day. But if you take a look at the weekly chart here, a nice upside reversal taking shape for this name around that 600 level. So the 10-week line in play for this hot stock as well. Yeah. I mean, I suppose, again, if the rally keeps gaining steam, if it gets above yesterday's high, Monday's high, I can imagine somebody doing it. It is a pretty steep downtrend. So, I mean, it's not like this graceful decline.

16:36Ed Carson:This was pretty heavy. But part of it is just like, look, this is probably the hottest stock in the hottest group in the market for a while. I mean, it basically doubled, tripled, you know, in January. I mean, it was just great. Just January, let alone what it did last year. So massive move. Can it come back? It's sort of like this is also, can we see some of the old leaders? And this goes with other chip names beyond memory. some of the areas that were strong. And we don't know. We don't know. We'll see. I mean, there's things that have been hitting memory beyond the Iran war, just concerns that maybe the demand won't be so impressive as people thought just a few weeks ago.

17:20We'll see if that comes out to be true. I mean, I, you know, but I just, the market has been worried about it. So, but can this come back? And it'd be great if this could just consolidate for a week or two, then move out, even if It's not a full base, but then make some kind of impressive move because this is pretty steep. I mean, maybe we do get a V-shaped recovery and that. And so Sandisk goes up 10, 15 percent tomorrow. And you're already looking at a stock that's extended from the 50-day line. So I don't know where we go, but I think you just want to be watching some of the, what were the hottest things?

17:53Are they going to come back or are we going to switch to new leadership? Maybe it will be biotechs. Maybe it'll be something else. But I think you can still, at least for now, keep your eye on these names to see how they do.

18:05Ed Carson:And so speaking of the strength and the leadership, how did all the oil and gas stocks fare today with the changing tides, as it were, with the war headlines? You know, I think they did okay because, okay, USO, if you go to USO, that's a little bit of a misnomer because at the four o 'clock, it was a little higher. So this showed a decline, but I don't think it was actually down as much, you know, as like it was only down a fraction on USO. But Brent Oil, which is Brent crude, that was up almost 5 % today. And not only does that mean that, okay, oil sort of is up there high, but if you're a company like Exxon, that's probably good news for your refining margins because you're probably going to be using domestic oil.

18:46but you're competing against things. I know this was down a little bit, but it didn't tumble. You know, the risk was is that, oh, peace on earth comes out and things go. It is going to be weird. How much can stocks rally if oil doesn't really come down? I don't know. And, you know, maybe oil does come down a lot tomorrow or next week. So, but it did feel like, you know, XLE and all those things, they didn't do too badly, I think. But yeah, I think that's the big question. And a lot of things, fertilizer, aluminum, a lot of things that were, you know, have been being, that one took a bigger hit today, but it's gone on a huge run too.

19:25Ed Carson:This is CF Industries for our Spotify listeners. Sorry, yeah, Spotify. Alcoa AA is a name that was doing, you know, that one made a solid move today. You know, to what extent can aluminum come back if the straight is reopened? There's plants that are damaged. There's LNG that's damaged and that feeds into it. So it doesn't seem like the Iran war winners were that hard hit overall today. We'll see. It depends on what actually we get to see out of oil and out of the Strait of Hormuz in the coming days and weeks. Yeah, interesting stuff. And Ed, I know you're going to stay on top of it, and we really appreciate it.

20:05Thank you, Ellie.

20:06Ed Carson:All right. Thanks, everyone, for tuning in. that's it from us for today but we will be back with more tomorrow morning on iubd live investors dot com slash iubd live for all the details we'll see you there and then we'll also see you right back here tomorrow after the close

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