Stocks Rebound Off Lows; GE Aerospace, Nextpower, Five Below Flash Buy Signals

0:00Ed Carson:Model portfolios have evolved from a one-size-fits-all solution. In a recent roundtable conversation, Jeffrey Saif of BlackRock and Alessio DeLongis of Invesco break down what's driving the next model moment, discussing how a deeper level of customization is producing a better alignment with investor goals and creating a practice differentiator for financial advisors.

0:32Ed Carson:Good afternoon, everyone, and welcome to Stock Market Today for Tuesday, February 17th. My name is Ken Shreve. On today's show, we'll talk about today's stock market, where we saw very tiny gains for the major stock indexes today. Saw some selling in the gold and silver space, some select mining stocks. Before we get into all that, let me bring in our news editor, Ed Carson, who has got three stocks to watch as usual. Well, good afternoon, Ed.

1:00Ken Shreve:Good afternoon. I want to take a look at GE Aerospace, NextPower, and Five Below. They all flash buy signals, and they all have relative strength lines at record highs or 52-week highs.

1:11Ed Carson:Okay. Well, despite tiny gains for the stock market today, I did see some good action among individual stocks below the surface. So before we do that, let's take a look at the major stock indexes like we always do. And let me share my screen here and we'll take a look at the major stock indexes here. Start by taking a look at the NASDAQ composite here. And we've been talking about the NASDAQ that's been in a distribution phase here. Looking at the NASDAQ, you know, Ed, it has corrected about, well, through today, it did correct about seven and a half percent off its high. And, you know, we can see an index that has been suffering from some higher volume declines, but it has been holding up.

2:01Ed Carson:OK, we did have a rally attempt today, but the Nasdaq was up one tenth of one percent. We'll just kind of look through the rest of the major stock indexes here and just see mild gains throughout distribution. Not as intense in the S &P 500. That index has only corrected about three percent off its high. But same situation here. You can see lots of higher volume declines in the S &P 500 below its 50-day moving average, but again, has not pulled back nearly as much as the NASDAQ composite. Dow Jones industrial average, definitely seen money flow into blue chips lately. Maybe that safe haven trade, Dow Jones still holding above its 50-day moving average, just below that 50 ,000 level.

2:50Ed Carson:And then small caps, still a bastion of strength in the market here. IWM looking just like the Dow holding above that 50-day moving average. So, Ed, money flowing out of at least some technology names. NASDAQ still holding above that 22 ,000 level. We've got, well, it looks like the first day of a rally attempt here. Not much movement up one-tenth of 1%. But, yeah, I saw some good action in individual stocks today. But Techland still looks a little vulnerable here.

3:23Ken Shreve:A little vulnerable. I mean, yeah. I mean, if today's the start of a rally, then yes, you can look at today's bottom. And, oh, here, it was obvious. Here we go, you know, rebounding. But, I mean, this is just a tiny – it was a lot of effort to get, you know, 0.1 gain as well. It was down a percent or so, hitting three-month lows. The S &P was at two-month lows. It just wasn't – we were getting close. And, you know, we're getting close to that 22 ,000 level, which would be back toward the lows in November. It would be the 200-day line is coming into that area. So we really keep on. I mean, we say it, oh, the 21-day line, oh, the 50-day line.

3:57Ken Shreve:But we're really coming down to some key levels. So just there were some encouraging things, but we have to see a lot more than just a few hours getting us essentially to break even. You know, it's still very much divided, S &P and the NASDAQ and especially tech, especially the mega caps and software. There's definitely some areas of strength in tech. But for the most part, you want to look elsewhere. That's where more of the strength, the Dow, the Russell, the mid-caps, NISY listed stocks, that's where things have been working pretty well.

4:28Ed Carson:Yeah, we saw more software stocks under pressure today. Take a look at the NASDAQ 100. So NASDAQ composite up 0.1%. NASDAQ 100 was down 0.1%. Take a look at that equal weighted QQQE. The NASDAQ 100 down 0.1%. The equal weighted QQQE was down a little more than the NASDAQ 100 today, down 0.3%. And then, yeah, the S &P 500, again, a lot of money flowing into the NYSE listed stocks. And again, the S &P 500 has not corrected nearly as much as the NASDAQ composite. RSP, actually, breadth was positive. Last check, a little bit positive on the NYSE today. The equal-weighted RSP was down just a little bit, down two-tenths of 1%.

5:29Ed Carson:Taking a look at some ETFs today, JETS, JETS, nice day of outperformance. Still seeing airlines outperforming here, Ed. That's been a nice pocket of strength in the market today. Jets up almost 3 % today.

5:49Ken Shreve:Yeah, I mean, obviously, it's been some volatility in that area. But all in all, yeah, definitely one of the stronger areas once again here.

5:59Ed Carson:And aerospace and defense as well. This ITA has been a pillar of strength. This is the Aerospace and Defense ETF getting good support right at that 21-day moving average. Another good technical setup here for this ETF.

6:16Ken Shreve:Yeah, this may be one of the, you know, especially with the volatility going on, I think ETFs are a good way to go in many cases. Swing Trader has used ETFs quite a bit in the last few months because you get these big moves back and forth, but it's just nothing like individual stocks. I mean, obviously, this has made some decent moves, but we're going to look at one of the bigger names in that group. But this is definitely something that people could do as well.

6:40Ed Carson:And then one of the most curious things about this market, and just talking about this with colleagues for several days now, to see the NASDAQ 7.5 % off its high right now and to see it struggling below its 50-day moving average, Yet you see the VanEck semiconductor ETF, SMH, still a pillar of strength. We're used to seeing semiconductor stocks go as the NASDAQ goes. But even on a day like today where you see the NASDAQ was up just a little bit, saw some semiconductor stocks outperforming again today. I think Broadcom had a nice day. Now, it's been hit pretty hard, but Broadcom was up today, a nice 2.3 % gain for Broadcom.

7:27Ed Carson:NVIDIA had a nice day today. That was up 1%. So, you know, SMH continues to outperform in this market, even though the NASDAQ itself continues to struggle.

7:41Ken Shreve:Well, I mean, chips are beneficiaries of AI. And it's not just the AI chips, even a bunch of lower tech chips that are benefiting from various ways. And software is getting AI disruption trade. And then the mega caps, a number of them, not all of them, but including NVIDIA, that's not one of them. But a lot of the mega caps, obviously, are spending a crazy amount of money. So AI is such a factor on the plus and bottom side in tech and beyond, honestly. Yep, yep.

8:13Ed Carson:All right. Well, let's start with some individual stocks here. And why don't we take a look with GE? Big mega cap here. GE made an impressive move today. GE Aerospace, NYSE listed ticker GE. This looks kind of like a base-on-base pattern, a stock trying to break out here. What do you see with GE Aerospace, Ed?

8:37Ken Shreve:Every day, the people of Meta work to protect over 3 billion users around the world.

8:42Ed Carson:My name is Jackie. I have been at Meta almost eight years now. As a designer, you really do have to think through the end-to-end implications of everything that you're doing so we can innovate while risks are mitigated. My hope is that I am communicating really clearly the way that we're using your data and the way that we are delivering all of the products Meta offers.

9:03Ken Shreve:Get the facts at meta.me slash risk. Yeah, this is what our old colleague Arusha would call like a neighbor base, I think. and sort of right next to each other. Yeah, it's a flat base, so it's technically not a – it sort of had this handle-like situation. And, you know, you often talk about buying late in the day, and that's a strategy that would have worked pretty well with GE because you would have missed out on all these fake-outs a number of times in the last week or so. It moved and then fell off. But this time, you could have bought near the end of the day and wouldn't have really, you know, wouldn't have paid a higher price than you would have anyway, and it did stick.

9:42Ken Shreve:The relative strength line's at a new high. It's a blue dot. We marked that with a blue dot because when the RS line hits a new high as the stock is breaking out or before, that's a really bullish sign. It's just a way that you want to see that leadership in there. So it's above there, showing strong action. It had a nasty sell-off on earnings, but it was really just sort of like a disappointment that growth was slowing, even though it beat Fuse. And I think the guidance was solid. It's come back and showed strong action here today.

10:16Ed Carson:Yeah, no doubt, GE Aerospace. Here was the earnings sell-off when it broke below the 50-day moving average. It was able to rally back. Here was the initial breakout out of the first base for GE Aerospace right on this day here. It broke out and then reported earnings, and then it has rallied back. So this was a little mini breakout. The relative strength line here that Ed was pointing out, here's the blue dot. See, the GE Aerospace has not quite moved into a new high ground. So we would call this actually a breakout today, even though the stock did not move into new high ground. It did cross some of these recent highs.

10:55Ed Carson:And the relative strength line, as Ed said, it is a new high ground before the stock. So that is a sign of exceptional strength. So we put that relative strength line in the blue dot in the daily chart. We'll see if GE Aerospace can get going here. It does have a broad market that's a little bit skittish here. Sometimes that can get in the way of technical breakouts, but a good, good strong move for GE Aerospace today. All right, let's move on to the solar group and take a look at, well, some people would argue the institutional quality name in the solar group. Let's take a look at a company that used to be called NextTracker.

11:36Ed Carson:They did change their name to NextPower, NXT, listed on the NASDAQ.

11:43Ken Shreve:Yeah, so technically this is now out of a buy zone, but it's sort of been trading in that area. It didn't necessarily feel out of there, but there was sort of this shelf that was built up. It is now the closing high. You know, it actually, there's been all this whipsaw here, but it's a closing high. And if you drew a downward sloping trend line from the top of this recent action, it got above there as well. So I think today, you know, was a chance you could have bought it, you know, waiting for some signs. Obviously, the volatility can continue, but you probably wouldn't want it to go much higher before you do that.

12:15Ken Shreve:The RS line also at a new high. It's not a blue dot because it already broke out, but it's essentially, you know, an RS line new high, you know, when the stock is becoming actionable. One issue is that the growth is supposed to slow. It already has slowed. You look at the EPS growth. And so that is one thing to give pause. It's supposed to fall in some of the, you know, if you look on a, you know, on a weekly chart and scroll down to the earnings, you'll see that it's supposed to decline year over year. So that is something that investors should be aware of. That is something. But clearly, markets see good things further ahead for this stock.

12:54Ken Shreve:And this clearly does seem to be the leader in the group.

12:58Ed Carson:That is next tracker in the solar group here. And yeah, you can see this is a nice, what we would call kind of a U-shaped cup base here, breakout several weeks ago. And it's been kind of moving sideways and holding on to those gains. So technically a good looking stock here. You see these green arrows here means that estimates have been rising, annual earnings estimates, single digit growth here after a few years here of exceptional growth. So growth rates expected to slow a little bit, but we will keep our eye on next tracker or excuse me, next power because of its its technical health here and a good a good bullish move today for next power.

13:43Ed Carson:All right, let's move on to the retail sector and take a look at a strong performer here. This is five below.

13:55Ed Carson:FIVE listed on the NASDAQ, another stock that made a nice bullish move today. Looks like a move into all-time high ground and another stock with a relative strength line that went into new high ground. And fundamentals look exceptional here. Five below, Ed.

14:13Ken Shreve:Yeah, strong growth. The growth is supposed to slow, but still continue. Yeah, it got above these various levels. I mean, it was sort of a messy short consolidation. You could sort of treat this whole range as sort of a flat base. Wasn't really there, but it bounced off the 21-day line last few days. Bounced off close to the 10-week line. Wasn't quite there. So I think today was a play, you know, you could do this. This was actionable. Just showing some positive action here. The discount group is doing pretty well. We'll get Walmart. We'll get a number of others. Five Below is a little different on there.

14:45Ken Shreve:But, you know, one of this is, you know, even though the group is 95 out of 197, there is a fair amount of discounters that are acting well. And definitely this is one of them. And yeah, so solid, solid growth, you know, solid technical action here. So definitely one investor should be looking at.

15:05Ed Carson:Yeah, definitely. Five below has got some pretty good annual earnings estimates as well. And then on the weekly charts for these charts here, again, we list the last eight quarters of earnings and sales. So you really get an idea of how quickly a company is growing. And then you see some forward estimates as well for five below. So a longtime strong performer in the retail sector and a nice technical move today for five below and a company with a great long-term track record of fundamentals. And again, you see a good, strong composite rating of 97, and that's just a result of excellent price performance in the industry group and a good track record of earnings and sales growth as well.

15:53Ed Carson:Well, we are still in the middle of our earnings season and have several companies to look at after the close today. Ed, where did you want to start? I know we've got a couple of interesting things. Let's take a look at Palo Alto, P-A-N-W.

16:09Ken Shreve:Obviously, software is terrible. This stock has not been doing well, so it's not anything. But you wanted to see if it was going to bounce up. Well, I mean, they beat views, but their guidance seemed poor or at least mixed on somewhat. So that stock is falling. And again, even if they had had positive numbers, what can you say that in a year from now that AI won't disrupt you? It's hard to convince people about that. So that's something out there. But guiding lower on earnings for the quarter and the year ahead. So that's not great.

16:43Ed Carson:maybe a lot of people thinking a lot of people thinking bad news already priced in here that is that is not the case palo alto down another five and a half percent yeah halo is another name i don't know quite what happened they had they had um how was announced yeah halazime had uh

17:04Ken Shreve:pre-announced a few weeks ago and that's sort of really what triggered the move up a few weeks ago, breaking out of maybe this handle in the double bottom base. It came out and it lost money on an adjusted basis way below views. Maybe there's some special factor in there. And so it's not that bad. The guidance beat by a little bit. It reiterated guidance on earnings and revenue for 2026. So it's down a little bit, not as bad as it was initially, but probably would need to look and see how the market really wants to deal with that. And one more is ACLS, XLS, or I'm not sure how to pronounce that one, but

17:50Ken Shreve:and not doing great here. Beat views, I believe, but guidance was, was below, I mean, on revenue and earnings. And so this name that you're thinking, aha, and this one makes big moves. I know people get excited about it at times. Maybe people thought, hey, this is a chip equipment maker that could go on another run, but that does not look like it's going to happen here. Down 12%. It looks like now it's going to gap down toward the 200-day line, not gap. It's certainly below the 50-day line. So ugly action there.

18:21Ed Carson:Well, I was hoping you were going to have some good news on the earnings front. We're 0 for 3, Ed. That's not what I was hoping for. But I guess she can't help us out there. Sorry about that. That's okay. I was also looking at MKSI. They were supposed to have earnings as well. This was another chip equipment leader, MKSI. They were supposed to have earnings after the close today, I thought, but that is not.

18:54Ken Shreve:I don't think they are supposed to report today. They haven't done so. They haven't come out yet. Yeah, so I don't know anything about that. Obviously, that one's been doing very well.