Tech Still Top Dog As Nasdaq Extends Gains; BWX Tech, Emcor, Figure Tech In Focus

0:00Alexis Garcia:There's a lot of hype and a lot of good news already priced into the marketplace today. We're entering a period of so much more change that it could be a tailwind for active management. Women are now in the protagonist seat for the family's financial story. I'm Joe Davis. And I'm Christine Kashkari. And this is season two of Better Vantage by Vanguard, an eight-part video podcast series hosted by custom content from WSJ and Vanguard. All investing is subject to risk, including possible loss of principal. This content was created by Custom Content from WSJ, a unit of the Wall Street Journal Advertising Department.

0:41Good afternoon, everyone, and welcome to Stock Market Today for Monday, October 6th. It's Alexis Garcia here. And the Dow dipped, but the Nasdaq and S &P 500 moved higher today. The big headline for investors was AMD's partnership with OpenAI. That sparked a 25 % gain for the chip maker, but AMD finished well off those intraday highs today. And here with me to help break down all that action and everything else you need to know about the market today is IBD Market Research Director Justin Nielsen. Justin, what's on deck for us today? Another interesting day here in the market.

1:23Alexis Garcia:Yeah, there were so many big gains today. And so, yeah, it's going to be hard to cover them all. We just can't. But we will highlight a few that were looking very interesting in terms of their setups, including BWXT, that's BWX Technologies. technologies. We also will take a look at FIGR, which is a new issue. And I do have a position in both BWX Tech and Figure Tech. So FIGR, a new issue, and then also EME. And we've got EME, MCOR on leaderboard. We've got Figure Tech on leaderboard as well as a watchlist name. That was our stock of the day. And BWX Tech is on Swing Trader, and I have a position in that one as well.

2:07All right, Justin, sounds like a great plan. But let's check in on the major indexes first. Before we get to all that good stuff, the S &P 500 finishing the day up four tenths of a percent, the NASDAQ leading the way up seven tenths of a percent, the Dow, the lagger today down a tenth of a percent, and small caps seeing a gain of half a percent today. So Justin, I'm going to get my screen share up, but talk to me. It sounds like the market for the most part is shaking off this government shutdown news, but we're on the NASDAQ here. So give me your thoughts on the market action today and where we're at.

2:46Alexis Garcia:Yeah, the shutdown certainly does not seem to be quelling any of the enthusiasm for the stock market right now. Yeah, there's just a lot of stocks that are moving up quite a bit. we'll take a look at smh real quick just uh we're going to skip ahead because this was so strong in terms of the action uh the chips of course this is the vanek semiconductor um amd certainly a huge part of that um and yeah you can see there was off its lows uh i mean off its highs uh so if you consider that amd was off um its highs and actually closed like right at the bottom of its range you still have to consider that this was a huge gain, over 25 % of a gain.

3:30Alexis Garcia:And so this is where the true range does make a difference here. Because when we say the true range, what we're talking about is, okay, where was that high? And instead of using today's low, you would use the lower of the close of Friday or today's low. And in that case, this is a 63 % closing range for AMD today. So well, well in the upper half. It did keep a lot of its gains. It was up 50 % at one point, almost. So yeah, very strong action there. And look, AMD is not alone. There were a lot of jumps by, you know, some of the more speculative names, you know, in the market, whether it's nuclear, whether it's the quantum computing, whether it's, there's just a whole host of areas, data infrastructure, or, you know, there's just Bitcoin.

4:22Alexis Garcia:So many places where the market is showing strength. And there is broader participation too. It's not just like a few areas. There has been broader participation. If we take a look at RSP, for instance, you know, that was flat today. But you can see how every day this has been inching up. The S &P 500, just by comparison purposes, was up. What was that? two-tenths of a percent or so. I don't know where it finished. Okay, so up three-tenths of a percent. Three-tenths of a percent. QQEW, which is the NASDAQ 100, that was up four-tenths of a percent. So, you know, just looking at the comparison of RSP, which is the S &P 500 equal-weighted versus the NASDAQ 100 equal-weighted, which is that QQEW, you can really just see that tech leaning.

5:13Alexis Garcia:Looking at the sector spider ETFs, XLK, of course, was way up on top. And the XLP, the staples, and these things that are usually looked at as being very defensive, those were at the bottom, exactly as you would expect in a thriving market with growth stocks taking the lead. And speaking of growth stocks, we should also just give a shout out to FFTY, the innovator IBD 50 ETF, that was also up considerably, two and a half. This has been just showing a lot of strength since that April 22nd follow-through day, and it continues to do so, really holding well above that 21-day moving average line with just that one test at the 50-day moving average line along the way.

5:58And then, Justin, we know the Dow lagging today, but what about small caps also showing a gain here? You know, this has been looking pretty good after testing that short-term moving average at the 10-day line.

6:10Alexis Garcia:Yeah, and it was actually kind of starting off a little bit stronger today, even relative to the NASDAQ. It was actually leading, but the NASDAQ did overtake it. You got a few things that can sometimes hold the Russell 2000 back. If we'd like to take a look at 0TNX, there was selling in bonds to put that money into stocks. And what that means is whenever you get selling in bonds, that does raise the yield for the 10-year treasury yield. And so that does kind of affect your small cap indexes. Some of the financials make up about 20 % of the Russell 2000. So if you, you know, let's take a look real quick at XLF.

6:55Alexis Garcia:You can see that that didn't have a great day today. It certainly wasn't participating like tech was. I mean, it wasn't bad, but it was flat. And then also home builders was an area, XLRE or XHB, ITB, this was an area that was starting to show some green shoots and that got slammed down pretty hard in a lot of areas. Because again, when you get that 10-year treasury yield rising, that's going to affect those a little bit more. And small cap companies themselves have a lot of debt that they use in order to grow their companies. They're not sitting on these big piles of cash like Apple and a lot of the trillion dollar club.

7:33Alexis Garcia:So when the price or cost of their debt goes up, that is going to affect the small cap companies more. But they're still, you go back to IWM, this is still looking pretty good. And if we take that step back to the weekly or even the monthly, we can see that this is really just, you know, it looks like it's just started a move. So I certainly wouldn't count this out yet. And Justin, we covered a couple sectors of it. We also wanted to take a look at GLD. That's the SPDR Gold Shares ETF. I'll switch back to the daily here, but this one seen a nice gain of 1.9 % today. Incredible, because you usually don't think of growth, you know, taking center stage and gold participating as well.

8:18Alexis Garcia:But between the XLK, The technology sector ETF, GLD was up almost as much in IBIT. The Bitcoin, I do have a position in IBIT myself. These were kind of your top areas in terms of ETFs and all of them, you know, right around 2%. It's so funny to see gold. That's certainly not what you would expect. But, hey, that's the market for you. Yeah, that's been the story here, you know, the last few weeks, which is not what you expect. But, hey, we're going to go with it. Let's look at one more NLR. That's the uranium and nuclear ETF. This one up about 2.8 % today. Yeah. So again, this has been a very strong area.

9:03Alexis Garcia:With all this AI talk, of course, they're going to need energy and nuclear is one way of providing that. I do have a position in NLR. Oclo, one that we've been watching for a while, that one has been very, very strong. NNE, nanonuclear energy today, that had quite a move, up 17.7%. And even though that was off its highs, it was just a very powerful move. And you just keep on seeing these nuclear stocks going nuclear, if you will. This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. They can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks.

9:50Alexis Garcia:Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required compatibility and availability varies 18+. Well, those were some of the big sector moves, Justin. But let's take a look at some individual stocks, starting with BWXT. That is BWX Technologies. This went up 2.6 % today, breaking out of this cut base with a 189.25 buy point. But thoughts here on the technical action. Yeah, so it's tough, right? Because there's so many of these stocks that we're looking at that have been moving for a while. And so you might be throwing your hands in the air saying, well, gosh, there's nothing left to buy.

10:35Alexis Garcia:But that just isn't the case, right? You still have some of these that are setting up. And what I like about BWXT, again, I do have a position in this. We did add it to Swing Trader this morning. What I do like about this is it does have that nuclear exposure. It feels a little bit calmer than something like an Oclo. The ATR, the 21-day ATR on this is only about 3.15 % as opposed to, you know, some of these very high octane names. names. You know, I'm trying to think of, yeah, Oclo is all the way up at 10 % for its ATR. So this is a little bit calmer in terms of its movement. So a little bit easier to handle.

11:16Alexis Garcia:And what I really like is how strong this was on its earnings gap up. Okay. But then what it did is it carved out this base for you. Not bad at all. The depth was only 17%. Really kind of shows that it was consolidating those massive gains it had on its last earnings report and just came a little bit below the 21-day moving average line, didn't even cross underneath the 50-day moving average line, and here we are breaking out to new highs from this cut base. So again, there are still some of these areas that are setting up. Now, you do have to wonder, well, gosh, with some of these areas moving for so long and being extended.

11:59Alexis Garcia:Are these the laggards? Yeah, to a degree. But that relative strength line is telling me, hey, this is, you know, this is still very powerful and so worth my attention here. And Justin, let's take a look at MCOR, that's ticker E-M-E. This is another one that's in the construction for utility commercial, probably AI adjacent play here, a 2.4 % gain today. Again, another one breaking out of a buy point here, 667.64, the official buy point for this one, Justin. So thoughts here. Yeah. So another one where you are looking at a really strong gap up that happened basically July 25th. So yeah, very strong gap up, almost 10 % up that day.

12:50Alexis Garcia:And it really just held most of that gain. Carved out a flat base. You had support right there at the 50-day moving average line just a couple weeks ago. Very tight action, only a 12 % depth for this base. So not bad at all. And then here we have a breakout. This was actually added to leaderboard earlier, and it was increased today. So sometimes if you get these early entries, for instance, if you just kind of looked, you know, maybe at the 22nd of September, now this would have been a tough one because, yeah, right before that, yeah, on this very strong blue day. It was crossing this area of resistance and was certainly viable there, but then you immediately had this pullback to the 50-day moving average line.

13:36Alexis Garcia:So if you did get shaken out, well, gosh, maybe this is something you're looking at increasing now. That's what happened with leaderboard. They went down to a quarter position as this started coming in, but then today was a good opportunity to increase that back, buy a little bit more, and raise it to a three-fourths position. So yeah, again, there's still stocks out there. It is worth noting, we've got earnings season that's gonna be coming right around the corner before you know it. So this has earnings coming out in 17 days and we're gonna be definitely pointing it out a little bit more often in the upcoming SMTs as earnings season comes upon us.

14:13And Justin, it is good to see, we have a really strong EPS rating here and the accumulation distribution rating at an A, which means, you know, there's big buyers out there that are scooping this one up.

14:24Alexis Garcia:Yeah, you can see that the volume pattern, you know, and I like to look at the weekly chart a lot of times, especially when I'm trying to analyze volume. But if you look, there are a lot of blue skyscrapers on the weekly chart here. And that does tell me, hey, that's where that accumulation is. Usually the institutions are behind that. And there is just overwhelming more blue spikes than red spikes here. We can also see on the weekly the RS line hitting new highs as that breakout's happening. Another bullish sign here for EME stock. Let's take a look at FIGR, that's figure technology. This is a recent IPO, Justin.

15:05This went up over 8 % today.

15:09Alexis Garcia:Yeah, so the IPO market, it was kind of dead for a little while, right? 2021, we had all of these special purpose acquisition companies coming out. It was, I think, the most IPOs and SPACs that came out in a year since 2000 when the dot-com bubble kind of burst right before that top there. So very, very strong IPO market in 2021. And then, of course, as rates were getting hiked up, 2022, it was dismal for IPOs. But we're really seeing that kind of come back. A lot of very interesting IPOs coming out. This one is in the lending space, but it also is in blockchain. So it's using the digital assets, tokenization, stablecoin.

15:54Alexis Garcia:All of these things are the buzzwords that people are talking about with the blockchain and cryptocurrency. And figure technology is right in there. So I did get a position in this. It was something that we were talking about at the Founders Club over the weekend. And we've been talking about this regularly as looking very interesting, especially a couple days ago in what we kind of call this hook pattern that was talked about by some of our friends over at the Lifecycle Trade. The authors there, Eric Krull, Eve Bobak, Kathy Donnelly, and Kurt Dale. So that did give you an early entry and you kind of had this level of resistance based on the activity over, you know, a period of like just above like maybe 42, an area of resistance right there.

16:41Alexis Garcia:And it started trying to get above it Friday, got turned away, but really closed well today and cleared that area of resistance. So certainly something that is worth looking into, what they're doing on the lending space, and to help you decipher that, Juan Carlos Arancibia, one of our long-term markets editors, he was head in that department for a long time, retired, but he still writes for us. So we're lucky in that regard. He wrote the stock of the day today. So that's definitely worth checking out. Yeah, IBDers that tend to retire tend to do more work for us. So it's a great retirement. They try to get out.

17:20We try to get rid of them, but it's really hard. Well, Justin, thank you so much for your analysis today. And I know, again, you're the host with the most here. What do you have coming up this week?

17:32Alexis Garcia:Oh, man, there's so much. So, of course, in just about 40 minutes, we're going to be on with Jim Ropel for the monthly market report. It's always great talking with Jim because he is, you know, he's got so much knowledge, so much history in the markets. And he really likes to hold on to these and get some big gains. He is always talking about those six to eight beat and raise quarters. So with earnings season coming up and things just really rocking, he's really looking forward to the end of this year. So can't wait to get his thoughts. We also have Tom Sosnoff. He is the founder of Tasty Trade.

18:11Alexis Garcia:He was the founder of Thinkorswim, and he is actually on his way to founding another company. So we're going to talk to him about some of the stuff that he's doing now that he's moving away from TastyTrade, what his next venture is. And of course, we're going to talk options with him because he is just an options expert. That's actually how I learned options myself by watching a lot of those TastyTrade videos. We also have the leaderboard scorecard. That's going to be on Thursday. So, you know, leaderboard subscribers that want to kind of see, hey, how did this whole quarter, you know, play out?

18:46Alexis Garcia:We're going to go over that, the performance, some of the highlights and some of the things that didn't work out so great. And then, of course, we're going to have the SMT video at the end of the of the week. So that'll be a lot of fun. We got Dan Fitzpatrick coming on as our guest on IBT Live. He was one of the speakers at the Founders Club. He's certainly an IBT Live favorite. So there's just a lot going on, as there usually is. It's a busy week for all of us here, but a lot of good content coming your way. So again, if you want to check out Monthly Market Report with Jim Ropel, that will go live here in about half an hour on YouTube.

19:21You can join in the chat there. We always love hearing from our audience and reading those comments there. But Justin, again, thank you so much for your time today. And that wraps it up for us for this episode of Stock Market Today. If you want more market analysis, you can tune in tomorrow morning, starting with IBD Live. You can head on to investors.com slash IBD Live for all the details there. And of course, we'll see you right back here tomorrow after the close.

20:18Alexis Garcia:Transcription by CastingWords players and business news ahead. If you're looking for more news and tools that you can use to help navigate the markets, consider becoming a subscriber to The Wall Street Journal. Visit subscribe.wsj.com slash take on the week to subscribe now.