Strong Start Loses Steam. Carvana, Roblox, Pulte Home In Focus.

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0:25Good afternoon, everyone, and welcome to Stock Market Today for Monday, September 29th. Apologies for the late start here. It's definitely one of those Mondays over here, but thank you for hanging with us through some technical difficulties. It's Alexis Garcia here. And in terms of the market, stocks did end up moving higher today, but a strong start for the indexes seemed to run out of gas by the closing bell. Investors also have their eye on potential government shutdown news. And it is a day that ends in Y, so there was more tariff news in the mix as well. And here with me to help break down all the market action is IBD Market Research Director, Justin Nielsen.

1:13So, Justin, quite a Monday right now.

1:15Alexis Garcia:It is. And you always say we're going to break down all the action. And it's like, what? Just quit overpromising, Alexis. Take it easy. You were talking about some cucumber mojitos before this. I was. That was just between you and me, Alexis. Well, I feel like. But now you could use it. Now you could use it. We could use it. I've got to say, I mean, I was I was passing the time while we were waiting for these technical issues to come through, just looking at the comments on YouTube. And I mean, what a great group in there. Just just fun. We appreciate all of them for hanging in and putting up with us, first of all, and then having to hang in through this.

1:51But what's on tap for us today, Justin?

1:53Alexis Garcia:You know what, we'll go through a few things because, again, as much as it was not a great close for the indexes, you know, it looks like the S &P 500 closed right at its midpoint. You know, the Dow Jones in its upper half, but not with much of a gain. There were still a lot of stocks that were moving and quite a bit, like not not just a little bit. And a lot of those, you know, were being talked about in the YouTube chat. So we'll talk about a few that just kind of caught my eye, including, well, we'll revisit some too, but we'll talk about Carvana, Roblox. I do have a position in Roblox and maybe housing, giving another shot with Pulte Home.

2:35Alexis Garcia:And then if we have some time, we'll cover a few revisits. Yeah, sounds good to me. Let's just check in on the major indexes before we head into all that. The S &P 500 finishing the day up almost three-tenths of a percent. The Dow up about two-tenths of a percent. The NASDAQ up about half a percent. And small caps squeaking up a positive gain here today, up fractionally today. But I'm going to go ahead and get my window up here, Justin. But talk to me about the overall market. I know you and Mike Webster have been talking a lot about this 1981 precedent. But where do you stand now? We can see what that S &P 500, you know, not too bad, but definitely coming off highs today.

3:22Alexis Garcia:Yeah. And really the precedent that we've been talking about with Mike Webster is 1980, you know, and basically it's still holding right now. So the idea was, and actually this is something that Mike talked about on IBD Live this morning, that it kind of came right up to the level that you would have expected it to. Now, this is where it's kind of rubber, rubber meeting the road time. If we do kind of cross into new high territory, that 1980 precedent is going to be pretty much thrown out. If it does break the 21 day moving average line here in a especially in a harsh way, that's really going to kind of make us lean towards that precedent a little bit more.

4:05Alexis Garcia:But right now, we're still kind of waiting and watching. You don't want to you want to use a precedent as a guide, but you don't want to hang your hat completely on it. You do want to look at those market signals. And we do have a market signal where the support that we got last week on Thursday, right at the 21 day moving afterline for both the S &P 500 and the NASDAQ composite. You had kind of the classic two and a half day correction or pullback where you get weakness on day one. You get weakness on day two. You start the day with weakness on day three, but then end up closing well off your lows.

4:40Alexis Garcia:And that was the reversal that we saw on Thursday, which just so happened to coincide with support at the 21 day moving average line. And then we got a nice follow up on Friday and to a degree today, too. Again, not quite stalling, a little bit too strong for stalling action here on the NASDAQ. But, you know, it was it was kind of a mediocre close. However, as I said at the outstart, there were a lot of stocks that were moving and looking very strong. A lot that closed in the lower part of their ranges and lost their gains. But there were a lot that were still very solid in terms of their growth potential today.

5:18Yeah, there's definitely a merchandise out there, as you would say. Let's take a quick look at the Dow here. Again, this one looking maybe a little bit better today, finishing in the upper part of that range. But any thoughts here before we jump to small caps?

5:31Alexis Garcia:Yeah, I mean, it was a better close for this one, but again, it's the Dow and that can be easily just just a few stocks closing well can kind of make that look a little bit better. So not too much to not too much to say there, but the fact that all everything else was basically in the lower part, that's that's what more caught my caught my eye. And we should also look at RSP because if you if you do look at RSP, it was interesting to me that this was actually in the upper part of its range. So that kind of goes along with the Dow, right? You know that, you know, closing in the upper part of the range, except this is 500 stocks, the S &P 500 equally weighted instead of market cap weighted.

6:14Alexis Garcia:So the fact that this was, you know, closing in the upper part of the range, I thought that was interesting. Yeah, especially since RSP has been kind of, I don't know if struggling is the word, but just hasn't really been advancing. And, you know, something that we have been keeping an eye on in terms of market breadth. What about QQEW? Any thoughts here? This up about seven tenths of a percent today. So, I mean, it seems like tech is still perhaps OK. Yes. And again, if you compare this, you know, with a 0.65 percent gain here on QQEW, the equal weighted ETF versus QQQ, which was, you know, up.

6:56Alexis Garcia:What was that? That was only 0.46. So definitely a better look for the equal weighted. So, again, that kind of tells me if we just pull up FNGS, maybe, which kind of looks at the mega cap. You know, this is kind of your trillion dollar club. So maybe some of these were weighing things down. And again, there were a lot of NASDAQ 100 stocks that kind of were were a lot more powerful than your mega caps and what your indexes maybe said. And Alexis, I got to say, your analysis of RSP, when you said struggle, I'm going to go with you on that one, because if you just look at the relative strength line.

7:32Alexis Garcia:I know you didn't. You were trying to be kind. But, you know, if you look at the relative strength line, that has been struggling a little bit. You know, but again, sometimes you have to look at, you know, what's going on with the overall market. And I think the equal weight does a good job of that. There were certainly a lot of pockets of strength out there today. Let's also take a look at FFTY because growth was certainly looking strong. I mean, that was a gap up, almost a 2 % gain, again, off its highs. But it's hard to complain about it being off its highs when you're still up almost 2%. So growth doing really well.

8:09Alexis Garcia:And this is something that's hard to make sense of. But GLD, which is gold, you would normally expect not to be going in the same direction as growth. But hey, here they are. They're just correlated like nothing else. That had a 1.65 percent gain. So, you know, you had software, IGV. If we take a quick look at that, that was that was looking strong today. and IBIT, the Bitcoin ETF, a little bit back in favored graces after spending a lot of time below its 50-day moving average line. It's taking another run at that with almost a 5 % gain today. Might as well look at ETHA as well, which is the Ethereum.

8:52Alexis Garcia:That also got back up to its 50-day moving average line after struggling below it for a few days last week. Yeah, so as you mentioned, Justin, you know, not necessarily stalling action, but we are seeing some other areas moving here in this market. Did you want to take a look at the Treasury yield before we get to the meat of this? Sure, we might as well. We might as well. Again, the 10-year Treasury yield, we have been looking at that just because a lot of focus was on the Fed and what they were going to do. But at this point, not really telling us too much here. We're still below the 50-day moving average line unless we see some big movements here.

9:33Alexis Garcia:Not much to say about this. I mean, it certainly was a big move in the yield over the last couple weeks from about 4 % to almost 4.2%. But it seems like it's settling down here below 4.2%. Mississippi is breaking new ground for business at a historic pace. Amazon, XAI, Toyota, Milwaukee Tool, and GE Aerospace have all tapped into our deep talent pool, prime geographic location, and welcoming communities. This is bigger than mega sites. Mississippi offers a thriving business ecosystem with affordability, greater collaboration with energy partners, and record-breaking speed to market. Looking to expand?

10:15Break new ground at Mississippi.org. All right, Justin. Well, let's get to some individual stocks now. What everyone came for. Let's start with Carvana. That's ticker CVNA. This one having a really nice gain today of about 6.3%. So thoughts here on the charts.

10:36Alexis Garcia:Yeah. So first of all, let's go to the monthly chart. This is one, I'll be honest, I had a good move on this back in, you know, before 2020 and during COVID, you know, this was okay. But man, 2022, this, I thought this one was dead. And I can just be completely shocked. I actually did get a little piece of this up on the right hand side. And I'm just, again, stunned that this is in new high ground. We have this coming from a nice cup with handle. If you go back to the daily chart, you know, really looking strong there. We can see that this had a lot of losses on the annual side, if you look at those EPS numbers.

11:17Alexis Garcia:But if you can see 2023, we got to 75 cents EPS, buck 59 for 2024. And estimates for this year, you know, 227 % gain, those are rising and a decent 24 % gain from some, you know, very, very solid numbers. So again, this is kind of really turned around, they did change their business model. And this has, you know, the last earnings report this had, it was a nice gap up and it really hasn't done anything since then except do this base. But man, you've got an opportunity here with a cross below or a cross above a downtrend in the handle, giving you kind of an early entry. And then we've also got this 400 level, you know, Jesse Livermore kind of noticed, hey, psychological levels, sometimes those round numbers.

12:02Alexis Garcia:Once you get through it, you kind of have blue skies ahead. And that's something that Carvana is potentially looking at here with 400. So a very interesting look here. Volume, 43 % above average. So you got that kind of checked off on this potential entry, early entry here. Absolutely. And, you know, RS rating pretty good. You know, it looks like it's kind of been in a range over the last few months here, Justin. And, you know, not a bad accumulation distribution rating in terms of, you know, bigger names out there that might be having this. Yeah. Composite rating, 98. Yeah, there's a lot to like about this.

12:45Alexis Garcia:So, you know, the relative strength rating, remember, this is kind of comparing a stock to all stocks, whereas the relative strength line is comparing it to the S &P 500. So you can see that the relative strength line has been in a range here, but that's kind of to be expected since this has been basing while the market has been going. So I'm not too concerned about that flat action in the relative strength lately. But again, if this if this does kind of follow through on the relative strength line here as well, I think that's going to tell you, hey, maybe this is ready to take the leadership mantle.

13:19All right, let's hop on over to Roblox, Justin. this up about 4.8 % today, breaking above this 139.97 buy point on the cup with handle base.

13:32Alexis Garcia:Yeah, so this is one that I do have a position in. I actually started this position back in the breakout of May. I started scaling back after the last earnings report. And then, you know, I started building it back up. And I've been kind of trading around it. But today seemed like an An interesting day to add to my position on this potential breakout. Now, look, there is some news out there with some lawsuit stuff. Definitely do your due diligence. That is a risk. But and look, the fundamentals are not nearly as strong as what we just saw for Carvana. This does still have losses, but there's certainly a lot of interest with the kids these days.

14:13Alexis Garcia:And this base is something that did intrigue me. And look, you know, if it doesn't work, I can really kind of scale back pretty quickly on those. I don't have to wait for a 7 % or 8 % loss before I know I'm wrong on this. If this starts filling in that gap or coming back down to the 21 day moving average line, I might be getting out of this a little bit early, at least for the shares that I bought recently. So it, you know, anytime you can kind of get into something with an easy and logical place where you can be cutting your losses, that really helps out. So right now we're 6.6 % above the 21-day moving average line.

14:52Alexis Garcia:So it seems like that 21-day moving average line is a great place to kind of use as a spot to potentially cut a loss. Or if you need to give it a little bit of extra room, you could even use the low of Friday, you know, to kind of say, hey, you know, can it hold that or can it hold the low of Thursday, either case? And this is where sometimes getting these earlier entries before the breakout can let you reduce that risk just a little bit. And, you know, you don't have to go with the full position. You can kind of increase that position once the breakout happens. That's right, Justin. And just for everyone listening out there, the low of Friday was 130.66.

15:31Low of Thursday was 128.75. So potential lines in the sand for those interested in roadblocks. Let's head to a Pulte Home, Justin. That's ticker PHM. This up 1.5 % today. You know, homebuilders were looking really good, but then also struggling, if I could say that word again. You can. This one reclaiming that 21-day line.

15:57Alexis Garcia:Yeah. So this was interesting that I saw a number of homebuilders. Pulte just happens to be the one we're talking about, but you can take your pick, whether it's a DHI or a KBH. There were a few to choose from here today, but Pulte was one of the stronger looking ones, kind of breaking a downtrend, if you will. And yeah, just as you said, this was looking kind of interesting as a rotation play. We've been talking about the Russell 2000 and small caps. You saw that kind of move in the 10-year treasury yield down, and that does help your mortgage rates. Now, a lot of that mortgage rate kind of decline happened in anticipation of this latest Fed cut.

16:37Alexis Garcia:And you saw that in the 10-year Treasury. So, look, you know, it was a little disappointing that this didn't take off from this cup with handle base that it broke out of earlier. But it's not broken yet. We've got support here potentially at the 50-day moving average line, a potential break of the downtrend. So if there is a rotation, you know, just because the NASDAQ, you know, kind of gets into that 1980 precedent doesn't mean that the Russell 2000 might not be able to take up the mantle. And if that is the case, then some of these plays that are maybe a little bit more interest rate sensitive, you know, and are reacting to a lower potential interest rate environment might do a little bit better.

17:19Alexis Garcia:And, you know, that that does lead me to believe that maybe the housing stocks aren't quite dead yet. So this is an area that I'm watching. I don't have a position yet, but I'm looking to watch this very closely. All right, Justin, why don't we do some bonus ones just for everyone stuck with us? Yeah, because if you stuck around for this this long, yeah. You wanted to maybe look in on DoorDash. I know you and Webby talked about this one on Friday. This up 3.8 % today, charging above this cup with handle buy point of$269.06. today. Yeah, so we were talking about the setup on Friday. This is exactly what you wanted to see happen.

18:00Alexis Garcia:A nice breakout. We did put this on Swing Trader. I do have a position myself, but yeah, this is exactly what you want to see. And look, we've got some very strong fundamentals. Again, this is a composite rating of 98. It's got an EPS rating of 80, relative strength. Not struggling here. You know, we've got that relative strength line kind of poking out, you know, ahead. And you You can see it also above its moving average lines. That's the orange line and the blue line that Alexis has on our charts. So that's a positive as well. So you've got a lot of things going for this base. And look at where it closed today.

18:34Alexis Garcia:Very different from the market indexes. This closed right at the top of its range. 98 % closing range. A very different look. So yeah, we talked about this on Friday and it basically did exactly what we wanted today. We love when that happens. What about Etsy? This one, a big winner today, up almost 16%. Now that's a breakout. We've got the RS Blue Dot as well. So Justin, thoughts here? Yeah, this was news related. So if you go to the intraday chart, you can pretty much see when this news came out. And I don't know the details exactly, but it was basically like where you can do an instant checkout on Etsy through ChatGPT.

19:14Alexis Garcia:So hello shopping, make it easier for you to spend your money. and Etsy definitely took off with that. Shopify, I do have a position in Shopify. That actually also was in that news piece. You saw that moving not quite as well as Etsy, but that was still moving as well. So that was another one, you know, not up quite as much, but 6%, hey, that's no slouch and a bounce off the 50-day moving average line. And then let's wrap up. You wanted to look at Hood, Robin Hood as well. That's ticker H-O-O-D. This went up 12.3 % today. Yeah. And this one, unfortunately, I have a much smaller position in than what I had.

19:55Alexis Garcia:You know, I was I was taking some off here earlier. And now I'm like, why? You know, why? You know, because Hood just just looks phenomenal. And again, we had the chief brokerage officer, you know, on the podcast a little while ago, this definitely has been one of the leading stocks. And again, you just had this, you know, strong day closing at the top of the range. So again, as much as there were, maybe the index is not looking great, you did have a lot of these individual stocks that were just looking phenomenal. And that's one of the things that probably was making FFTY look better, making RSP look better.

20:33Alexis Garcia:You just had plenty of stocks that we're kind of in this camp of very strong days, closing much better than the indexes. Well, Justin, thank you so much for your insights today. And, you know, as we all know, you're everywhere here for IBD. So what do you have coming up this week? Well, we've got on Wednesday, we've got Chris Gessel, our chief content officer, my boss, and I have to say my friend, too, because, you know, he made sure that at my 50th birthday party as I introduced him as my boss. He's like, and your friend. So he's going to be on the podcast again. We're going to talk a lot about regression channel lines, the art and the science of it.

21:11Alexis Garcia:So that's going to be a lot of fun. We also have the Founders Club coming up in Las Vegas. So for those that like to meet up in person, we're really looking forward to that. You know, it's not only exclusively to our Founders Club members anymore. If that is something that you're interested in joining us for, seeing some of us in person, including myself, Chris Gessel, Mike Webster. Mark Minervini is going to join us via remotely. But, you know, we've got some, you know, Scott Sinclair will be there. Dan Fitzpatrick, who's been on IBD Live. So we've got some Charles Harris. We've got some great guests.

21:45Alexis Garcia:And that's going to be a lot of fun. All the heavy hitters will be there. So check that out. And that's it for us today. We'll be back with more market analysis tomorrow morning, starting with IBD Live. You can head on over to investors.com slash IBD live for all the details there. And thanks so much for watching. And we'll see you right back here.

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