Stocks Mixed As Oil, Yields Bounce; Caterpillar, Cloudflare, Curtiss-Wright In Focus

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0:39Ed Carson:Good afternoon, everyone, and welcome to Stock Market Today for Tuesday, March 24th. It's Alyssa Coram here. And with oil back on the rise and same for Treasury yield stocks mixed in today's session as the rally attempt is on a bit of a rocky footing. Joining me now to discuss that and some stocks for our radar is my colleague Ed Carson. Ed, great to see you. Great to see you. I want to take a look at Caterpillar, Cloudflare, and Curtis Wright. It's a sea market. It sounds like a plan. Let's go to the major indexes and take a closer look at the action there. The S &P 500 down four-tenths of a percent on the day.

1:23Ed Carson:Meanwhile, the NASDAQ Composite, zero in DQC. And market surge down eight-tenths of a percent on the day. The Dow down two-tenths of a percent. Small caps up on the day with the Russell 2000, up about a half a percent or so. So faring better than the other major indexes, Ed. But a little bit of shaky ground that we're on when it comes to this rally attempt. Yeah. And look, I mean, we've had all sorts of one or two day rallies that fizzle out. And so nothing really changing there. NASDAQ led the declines. A lot of software losers. Software was really hard hit today. And some of the mega caps weren't looking good either.

2:05So that's where a lot of the weakness. IGV really, really hard hit after. So some of that balance is really fading away. So we'll have to see how that goes. But yeah, we're below the tunity line. Crude oil and treasury yields rebounded. you know, quite a bit today. So it's, you know, that's what sort of, that was one reason why the market rallied was all that, you know, President Trump says talks are ongoing. We'll just have to see how things go. I mean, oil is up, but not back to where it was on Friday. So, you know, it's just one of those news driven markets. And we just don't know what's going to happen.

2:41Maybe by the time this meeting is done, futures will, you know, ETFs will be up or down 1%. I I don't know. I mean, something could happen that could drive it. Ten-year treasury yield, eight-month high. And there's people talking about that maybe if we get up to 4.5%, 4.6%, you really start becoming a problem for the stock market and the economy. I mean, it certainly doesn't help that oil is that high. If you go to a weekly, I mean, we've been higher than 4.5. I mean, even on that chart, you can see it. But there's 4.7, 4.8, but you're getting up to the highest levels in a year or so, getting into those areas.

3:15So it's just tough. I mean, in some ways you could argue that the market was somewhat resilient, especially with software having its woes. I think if you look at RSP, that actually rose. So the small caps rose, RSP rose. So actually did relatively well given what oil and yields did today. But, you know, that's sort of like, I mean, you know, there's this sort of like not the greatest, you know, like a moral victory, but we want victories is what we want. And I just think with the NASDAQ and S &P, we've got to get above the 200 day line. We've got to do a lot more than that. There's just, you know, maybe we bounce back quickly.

3:50But as you were mentioning on yesterday's stock market video, often it takes a long time. I mean, you know, there's just, if you've been damaged this much, it doesn't necessarily bounce right back. That 200-day line, very much in focus for not only us, but it's widely followed in the investing world.

4:13Ed Carson:So something to keep in mind there. And just to reiterate what you were saying, Ed, in terms of it taking a long time to play out, That's our historical research into what happens once you break below that 200-day line. And as of now, we are in a rally attempt, day zero of the rally. You have from Friday, so as long as we hold above that, this rally attempt is intact. And then Thursday at the earliest, but maybe later, we'll have to see, like you said, depending on the news, right, what the catalyst is, a gain of 1 % or more with volume heavier than the prior day. That would be what we would be looking for on the NASDAQ or the S &P 500 as a follow-through day.

5:05Ed Carson:Now, that is not a zero to 100 signal. That's a let's start dipping our toe in the water, putting some test buys to work because a follow through day is not a magic golden ticket guarantee, but just a signal that the market could be turning higher with a little bit more oomph behind it. But that has yet to be seen. Yeah. This episode is brought to you by Indeed. Stop waiting around for the perfect candidate. Instead, use Indeed Sponsored Jobs to find the right people with the right skills fast. It's a simple way to make sure your listing is the first candidate C. According to Indeed data, Sponsored Jobs have four times more applicants than non-sponsored jobs.

5:52Ed Carson:So go build your dream team today with Indeed. Get a$75 Sponsored Job Credit at Indeed.com slash podcast. Terms and conditions apply. Okay, moving on. Let's take a look, Ed, at Caterpillar in the industrial sector. This setup caught my eye as well in recent days, Ed, and with today's action quite notable. Shares up 2.2 % right at a round number at 700. Also right at the 50-day line. It retook the 21-day, and it was an outside day, upside reversal, getting above the high from Monday, clearing a trend line. So this is a stock in an uptrend. And, you know, if we weren't in a downtrend in the broader market, I think that this does look potentially actionable with this move here today, Ed.

6:48Yeah. And one of the things that was really leading the market, and there's energy and certain things, but one of the big things was AI hardware. And to some extent, this is in that play. There's some generators that they sell, and I suppose that some of their equipment might be used in some various ways and some of the AI build out in other ways. you can see that sales growth has been picking up and a lot of that is AI related. You know, if you were to nibble on things, this is a place to do it just because it's close to the 50 day line. And it just seems like early entries are even more important around this in this kind of market where you have such short lived balances.

7:22I mean, some stocks do get escape velocity, but if the market keeps on rolling over, it's just, you don't have it, you know, it's hard to beat that headwind. So if you're going to have any chance, this might be where it is. But I agree, this market makes it very hard to pull the trigger on anything right now.

7:39Ed Carson:Yeah. But perhaps in a better market, the reason we like this setup is because it's a great way to manage your risk. You know, the day's low of a reversal. You have, again, a round number at 700 and you have the 50-day line. So that seems like a pretty clear, low-risk entry. But again, And do you want to stick your neck out there, right, is the question. Perhaps for traders out there who can't resist the temptation, Ed, what would you say in terms of managing risk? In addition to a clearly defined stop, how would you be treating something like this? Yeah, I mean, beyond like using today's low as maybe a place to get out or at least certainly lighten up, using a smaller position.

8:27Don't get too concentrated. Don't have, if you're making buys, don't make 30 pilot buys in AI hardware. That is not keeping yourself safe. And it's just in general, and know yourself. I mean, I'm not great at dipping my toe in and doing the, you know, the hokey pokey, put one foot in, one foot out. I'm not great at that. So I try not to do this kind of situation where I assume I'm over half the time, I'm going to have to yank out really quickly. So if you can't do that, then you probably don't want to be dipping your toe too much because you have to step out. So if you're going to be high on the risk, you have to be able to manage that risk.

9:08And part of the managing risk sometimes is like, this is not my personality. I'm staying away from it entirely.

9:13Ed Carson:No, that's such a great point because we know that in this type of market, when you're not in a confirmed uptrend or a power trend type market, the odds are kind of stacked against you. And we've seen that play out, it seems like, with even the strongest of stocks, a lot of them having a hard time holding up or maybe the ones that have just continued to power higher. Those are out of position, so there's high risk with that as well. But in weak markets, even the strongest stocks can tend to get dragged down as well. So that's just a look at the odds there for you, right? Absolutely. Okay, next on our list, let's check out Cloudflare because even though there's a lot of damage and destruction in the broader software sector, this is arguably holding up the best or one of the best looking names in the sector, Cloudflare.

10:12Ed Carson:and it was down on the day, but it's forming the right side of the base, forming a potential handle here, Ed. So tell us more about what's working for Cloudflare right now. Yeah, it keeps on trying to do this and arguably like a handle is nice, it'd risen quite a bit. And to do that in a bad market when software is getting killed, I mean, yeah, there's a bit of a balance at part of this, but still, this is really outperforming software for the most part. you could even argue you could sort of see a double bottom in the right hand side of this cup base so it's sort of forming a high handle to that i i mean we're not using it the handle works either way so it's not like oh you know i don't want to get into that but it does show you it just feels like there's a rapid rise it's pausing here so if it gets above that trend line that you drew or even just the just the handle itself i think that would be uh yeah because then it's like it would be at a good spot relatively.

11:09You know, the growth has been pretty strong. I think part of it, there's so much cybersecurity. They're also doing networking stuff. You know, you go to a lot of sites, Cloudflare is running them. So Fastly is probably the hottest software maker out there, but that is way out there now. But you can understand that a network speedy, you know, AI type of, you know, that, you know, this is benefiting from the need for fast networks. Maybe Cloudflare is getting some of that. That's just me just supposing. It's sort of almost working on a three weeks tight in addition to maybe handles there. So it's doing a lot of fairly good action here.

11:45The action hasn't been that violent lately. So there's a lot of things to like about it. Again, very difficult to pull the trigger. So I know it's just a broken record, but it's just hard to say this is better than cash. but you know this is one you definitely want to be looking at this name because it's you know if software is going to have a rebound one could imagine you want to be looking for names that are already above a lot of overhead you know this it really doesn't have much overhead at all i mean yeah there's more to the left side of that base but it's only a couple of days most of it is right there that yeah that line you get above that area and all of a sudden almost everybody's happy so So it's just much different than almost any other software maker out there.

12:29Ed Carson:Yeah, such a great point there, Ed. So even though right now isn't the time to be buying, what we're doing at Team IBD is we are keeping our watch list fresh and up to date, really scanning the stocks that are setting up and, of course, keeping the leaders in mind, right, the ones that are extended. So to your point, maybe Cloudflare is the best looking setup in the software sector, but the leader here, Fastly for sure, up and out of there. But in terms of potential setups to watch, maybe this is still forming the flagpole of a high tight flag. We'll have to see what happens. But absolutely, no doubt, the momentum is with this one.

13:17Ed Carson:So we'll be keeping an eye out if there's a new setup here in the coming weeks. So a little honorable mention there today. Let's go to Tigger CW. Curtis Wright in the Aerospace Defense Group. Here is another stock with an uptrend, pullback to the 50-day line, and now a move above a trend line after the pullback. Yeah. And so you could argue that it's actionable because it's above that trend line, though. You might want to use Monday's high. It's finding support at the 50-day, 10-week line. Relative strength at a new high. You know, it's a short consolidation, but this is, you know, I'm not sure on a weekly.

13:57I can't remember. It may have tested the 10-week line, but that was sort of right at the buy point, too. So this sort of feels like the first real test of the 10-week. So definitely could be playing here. It's outside of the AI space. some solid growth it just it's just been a solid performer here uh you know it hasn't been hit that hard there's been some aerospace names that has been that have been hit hard and a few that have moved out this one again showing relatively you know tame action uh the atr the 21 atr is four percent plus which especially given in this kind of market uh you know you're seeing some not too A lot of stocks are showing some big swings, 10%, 12%.

14:37This one's relatively tame. Again, it's just showing some pretty good action. The earnings and revenue growth are not amazing, but they're solid. They're in the double-digit range. So another one that should be on people's watch lists that's outside of AI, that's outside of energy. You know, you want to be looking around making sure that you have a really diverse watch list because you're not sure what's going to come out of this. When the market does turn around, it's not clear what's going to be leading the market. And this could be one of them.

15:11Ed Carson:Yeah, I really like this year long uptrend that the stock has had and an orderly pullback here. We will take it. All right, Ed. Thank you so much as always. We appreciate your take. Thank you, Ali. And thanks, everyone, for tuning in. That is it from us for today. But we will be back with more tomorrow morning on IABD Live. Investors.com slash IABD Live for all the details. And then coming up tomorrow after Stock Market Today, we have our weekly Investing with IABD podcast. Host Justin Nielsen is out this week. So you're stuck with me, whether you like it or not. I'll be filling in for Justin and joined by Arnie Gutierrez on our Market Surge product coaching team and also one of our IBD Live panelists.

16:05Ed Carson:Always enjoy getting to collaborate with Arnie and hearing his perspective on things. We're going to be talking to you all about the new Market Surge platform. So I can't wait. We will see you there tomorrow at 5 p.m. Eastern. That's it for today. See you then, everyone.

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