Techs Lead Broad Advance; Micron Technology, Cisco Systems, Datadog In Focus

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1:02Good afternoon, everyone, and welcome to Stock Market Today. Can't believe it. We're almost at the end of the week. It is Thursday, July 9th. My name is Ken Shreve, and joining me on today's show is going to be our news editor, Ed Carson. We are going to talk about another interesting day in the stock market. Nice day of outperformance for small caps and the NASDAQ composite. at better than 1 % gains for those two indexes today. Nice day for the S &P 500 as well. Dow, not too much participation today from the blue chip index, but we're going to talk about all of that with our news editor, Ed Carson, who, as usual, has got three stocks to watch.

1:44Good afternoon. Ed, what do you got for us today? Yeah, I'd like to take a look at Micron, Cisco, and Datadog. Micron, Cisco, Datadog, three tech stocks on a good day for the NASDAQ composite. So let's get right to it here. Take a look at a chart of the NASDAQ to start because that was our really, really strong index today. It opened strongly and really just held a strong gain all day. You can see here the NASDAQ really is trying to break out of a downtrend here across that 26 ,000 level, back above all of its moving averages. We are in the summer doldrums here after that series of heavy volume declines and break through the 50-day moving average.

2:28We've been rallying back in very, very light volume here, but nice reversal above the 50-day moving average yesterday and nice gain today. Let's take a look at that Russell 2000. Take a look at IWM. That was a nice percentage gain as well. That is also back above its 21-day moving average, still below the 10-day moving average, a little bit of resistance level to get through for the Russell 2000. S &P 500, also a good day. I think that was pretty much up at its session high, up, what was it, almost eight-tenths of a percent. That is also close to breaking out of a downtrend. And then the Dow Jones Industrial Average didn't move too much today after a sharp drop yesterday down to its 10-day moving average.

3:17Dow only up about two-tenths of a percent. But, Ed, I've got to say it was a pretty good performance for the composite today, closing up near its session high and pretty close to breaking out of a downtrend today. Low volume, but lots of big movers in that index today led by chip stocks. Yeah. Getting back above the 21 and 50-day line is really important. I think the short-term highs, it's very close to that. I think that would be a real positive signal that it's decisively above the 50-day line and clearing some of that level. There's always more hurdles. It's still in the middle of this range.

3:54If it gets above those highs from last week, it's still in a range. So that just makes me realize it's always a tough thing. In a choppy market, you have to be careful because strength often begets weakness. But at some point, you know, the market may keep on moving. So you don't want to wait until we get all the way to record highs, especially if you drew down your exposure. I mean, so, but if you want to add exposure, you have to take some risks. So I think today was a day you could have. Didn't necessarily have to. But, you know, tiptoe in there and just be ready to tiptoe back out. But nice move here.

4:30You know, just want to see more of that. I want to see that a trend really develop once again. Yeah, yeah. Interesting with the Russell 2000. I mean, this is in a similar setup. Well, closer to highs than the NASDAQ. I mentioned the Russell 2000, still below its 10-day moving average and below that 3 ,000 level. That 3 ,000 level, we'll see if the round number of 3 ,000 is going to be a resistance level or not for the small cap index. But the S &P 500, that is kind of also trying to get over these recent highs as well, Ed. So you have that high from earlier in the week for the NASDAQ. Monday's high, still trying to get over that.

5:19It's got this high here to conquer as well. But all in all, you know, a pretty good day. Not much in the way of economic data. Friday, as far as I know, pretty, pretty quiet tomorrow. So we're going to close out the week and see where we're at here with the index. Unless I'm missing anything. I don't think there's anything in the way of economic data. No, there's some other big news. We'll get to that later on. But, yeah, there's no more decisively above the 21-day and 50-day line. So, and again, yeah, looking pretty similar to the NASDAQ. I agree with everything you said. Yeah, yeah. And then really just the Dow Jones that we looked at, not much movement there today.

6:01But, you know, sharp drop down to that 10-day moving average yesterday, still up near all-time highs. And, yeah, so that's where we're at. Good day of outperformance for semiconductor stocks. A lot of A-rated groups in the market did well today. So, you know, good day of outperformance for the chip stocks. Like we said, we'll take a look at SMH, which rebounded very well today. But you can see here, Ed, the SMH did gap up and ended 2.5 % higher, but kind of ran into those short-term moving averages you can see right here and got turned away, closed near its low, still a 2.5 % gain, pretty decent, but maybe a little bit of resistance here at the 10-day and the 21-day moving average.

6:46There was some weakness, and we'll see that with Micron as well, fading off from highs, you know. You know, the other thing is one reason why the NASDAQ and the S &P closed at highs is because a lot of other groups, software did fine. I mean, biotechs did fine. All of these, you know, there's a lot of positives out there beyond chips. It would have been nice to see chips at highs, but what are you going to do? I'm sorry, I do have a position in SMH still. But, yeah, that's just one factor there. All right. Well, big week of financial earnings reports coming up. Let's take a look at KRE. This is the regional banking ETF that had a tough day yesterday.

7:26It came down to that 21-day moving average. This is a current holding in the leaderboard model portfolio that I co-managed, but good to see a recovery in the regional banks today, Ed, and nice recovery up almost 1.8 % today. Yeah, I agree. I don't know if there's much you can do with these names in terms of new buys, given all the bank earnings, including some super regionals that are probably in this ETF. But nice action, you know, finding support. The banks generally did well today. Yeah, fifth third. We're going to be hearing from fifth third next week. PNC Financial and U.S. Bank Corp as well all reporting next week.

8:08So regional banks outperforming a little bit today. Also, IYT ETF, IYT, the transportation ETF. I know the trucking stocks had a good day today. Trucking stocks outperformed. But IYT, after a test of the 21-day moving average, that outperformed as well. I don't know if it was anything outside of trucking stocks that outperformed. But overall, good day of outperformance for IYT today. I mean, really strong. I mean, oil prices fell today and oil prices came off, but it was really resilient. Yeah, oil prices came off their worst, their highest levels yesterday. But IYT didn't fall that badly yesterday when that's such a huge factor there.

8:52And then clearly a bubble that's basically at a closing high. And oil has not given up all its gains from the last few days. So that was really impressive performance. Jets is another one that's obviously energy related. uh that one found support yesterday and it's bouncing higher today it's in the buy zone i mean delta i think is the biggest holding so we'll have to see how that goes but yeah it seemed like a lot of the travel stocks had solid days in the states for obvious reasons um yes yeah and delta of course reporting earnings uh tomorrow tomorrow morning and again the jets probably benefiting from, you mentioned, oil prices lower today.

9:37So take a look at USO. Up four sessions in a row and down almost 3 % today. I didn't get a final settle on crude oil futures, but I assume they were down pretty good today. Yeah, I mean, a similar amount. And it's just nice to see that come off. The market, again, remains very confident that things will work out. It'll all work out OK. It's sort of like when a friend or family is a little annoying sometimes, they'll say, oh, everything's going to work out just fine. But, you know, often things work out just fine. And that's the way the market's been with this whole situation with oil and mid-East stuff, to be honest.

10:16It really has been. Yeah, it sure has been. So oil up four days in a row. Get a little reprieve today. And I'm sure we're going to continue to see volatile headlines between the U.S. and Iran. But the market is, as you said, confident that the ceasefire is going to hold, even as both countries exchange military strikes with one another. So, all right. Well, that's a look at some of the ETFs on the move today. Let's get into some individual stocks here. This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It 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.

11:06Gemini 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+. three three tech stocks to take a look at again a lot of big percentage gainers in the nasdaq 100 today a nice gain for the nasdaq today but out of all the four to five percent movers in the nasdaq 100 including micron a lot of the memory and storage stocks outperformed today Micron gapped up, did close off highs today and got turned away at one of its short-term moving averages here, but still up 4.5 % today. Low-volume rally.

11:51Again, summer doldrums. We're in kind of a low-volume period of time in the market right now. But what do you see in Micron here, Ed? Yeah, I mean, there's a lot of stocks like this that, man, they're interesting. But where do you exactly get them? I mean, we're going to look at another one that I think is a better setup. Obviously, one of the strongest stocks. So maybe you just take the risk and say, I got to get on board this somehow. And I get it. You could have done it yesterday. You could have done it today. You could wait to see it get above the 21-day line. It's just tough because yesterday it hadn't really broken a trend line when it bounced from around the 50-day, 10-week line.

12:25So you could have done it, but it wasn't perfect. Today it's up, but not quite above the 21-day line. While being more than 10 % above the 50-day line, it just makes it tricky. The 50 billion is rising quite fast. So you could imagine if Micron could just hold steady for like a week, it would actually not be that extended. And then the break of the downtrend wouldn't be so steep. So if you could just get even just a few days, I think it'd be better. I mean, but Micron, it moves a lot. Good chance it will not pause if the market does anything. But yeah, it just shows there's a lot of names like this.

13:00And some of them are worse, where there was some pretty violent sell-offs. You're balancing. Maybe there's something, but it's just hard to really find that right spot, at least in my view. Yeah, no, it's a very good, very good point. We're very particular about entry points with our methodology, and we're very careful not to buy extended stocks. And that's the tricky part in this market when you're following a rules-based system. You don't want to bend the rules and just kind of try to find ways into stocks and bend the rules. So Micron already looking a little bit extended from the 50-day moving average, a little bit extended from the 10-week line.

13:44But, you know, it's finding support and holding above that 50-day line. We'll just look at the weekly chart here and see where it is. because you look at the weekly chart, and this is a good, solid test of the 10-week moving average for the first time after a breakout, but we can see, you know, we could just take a look and see where it is in relation to the 10-week moving average here, and it is probably already, yeah, it's about 6.9%, so it's not crazy extended from the 10-week line, but, you know, getting there. But again, that was a pretty sharp pullback. Initially came in very, very heavy volume.

14:30So I've seen stocks much more extended than this. So we'll see. Micron is looking pretty good as it makes that first test of the 10-week moving average. All right, moving on, let's take a look at networking stocks. There's a lot of strong performers in the networking group here. This was another top performer in the market today. So let's take a look at one of the bigwigs here. This is Cisco Systems. Now, this is an interesting move, a test of the 50-day moving average recently. And this is a move that looks a little better here, closes up in the top half of its range in a gap above all of its short-term moving averages.

15:13Above all those moving averages, but not extended from them. It's clearly breaking a downtrend. You know, it's a more graceful pullback. I was talking about on IBD Live. I like pullbacks where it's like you're walking down a hill, not jumping off a cliff. It's much easier to walk back up that hill than to try to climb up that cliff. And, you know, this was a gradual thing. You know, it held the bulk of this gap up, and that's after a run. So it showed a lot of relative strength. Like, yeah, there's a little bit of drop in the last couple of weeks, but any stock that's pulled back, you know, sort of had some of that.

15:48So, again, this is, is this going to fly 300 percent? Probably not. The growth is just way too much, not nearly as there and it's already gone to good run. But in terms of technicals here, I just like that. It's, I like it when you have three or four things are telling me to buy it, you know, like I'm saying it's like, and, you know, and there was an opportunity. It's still actionable. So we'll see how that goes. But, yeah, nice action. There's been a little bit of acceleration on the revenue side. They're doing pretty well in crypto. That's one reason why they're doing well in addition to networking.

16:20So, yeah, I just think this is one that's a little safer. I have an ATR of 3%. That's something, one other thing. And that's when, you know, when we're looking at stocks that are like 8%, 10%, 12 % on a regular basis in a volatile market, it's nice to find a growth stock of some sort, obviously a more mature one. that has not such a radical ATR. I'm telling you, Ed, I think I learned something new from you every day, telling me there's a crypto angle with Cisco systems. That I did not know. Google is offering free AI training and tools to U.S. small businesses so they can innovate in ways both big and small.

17:01Built by Google experts, the Google AI professional certificate equips small businesses with practical AI skills. Through hands-on projects, they can start using AI to get more done and unlock new opportunities for their business. This is a new era of American innovation. Find out more at grow.google.com. If you're looking at some of the ETFs, Cisco is a big component of some of those crypto ETFs, and there's a reason for it. Very interesting. Well, thank you for bringing Cisco to our attention here, because this is actually a nice gap up on earnings, and look at how it held gains right at the 10-day moving average and nice orderly pullback down to the 50-day moving average.

17:46And this was, yeah, on a day when a lot of tech stocks made nice percentage gains and had trouble holding onto those gains. Cisco actually held onto those gains, looks like a decent close in the top half of its range. And, yeah, good day for Cisco Systems. And then just take a look at the weekly chart, and you see another solid test of the 10-week moving average for Cisco Systems here. And a nice, tight pullback to the 10-week moving average. Good-looking stock here with good-looking technicals. All right, final stock is going to be one of the better-performing software names in a group where there's not a whole lot of them, actually, at this point.

18:31Data Dog, D-D-O-G. We'll start with the daily chart for Data Dog. This has been a strong performer in a group that's been beaten down. It's tried to rally recently, and there have been some stocks that have been rallying in the group. But Data Dog, you know, good day today. Came down to the 50-day recently. It didn't quite touch it, but really showing a lot of great relative strength in the market. Yeah. I mean, you could have bought it when it rebounded above the 21-day line after the 10-week line test. But that's like – but today, it moved up. It was one day away from having a handle on a short consolidation.

19:15But it went above the left-hand side of that handle by one penny. So technically, it's not going to have a handle. But you can use that area like 271 something or something, whatever, as your early entry still. After tomorrow, after Friday's session, it's supposed to have a new base as well. For 278.7, it would technically be the Vi point. So it basically has a base. It's been setting up. It's one of those 5, 10 software names that are acting pretty well. So, you know, setting up and sort of almost your traditional Vi point right there. Solid fundamentals. The valuation is pretty high. We're getting used to these microns with these low double-digit valuations with 1 ,000 percentage EPS.

20:00So that is something. I mean, I know we don't look at valuations too much, but that is a lot. But there's been a lot. This is definitely one of the software names that have stood out again, come back when many others have not come back. And you can see it cleared a lot of sideways range. This sort of base is sort of like almost at the top of this long, long, long range. And the RS line on a weekly is clearly at a new high, the highest in like four or five years. So that's showing a lot of impressive action. You know, if you didn't buy that gap up on the earnings, which I totally get because it's just like running straight up.

20:40And where do you find it? It was a wide and loose base. This base is going to be a lot tighter. I mean, it's not saying it's the tightest thing ever, but much smaller than the prior base. And you look at all that action. And so essentially, we'll have a handle on a daily, it looks like. So a lot to like. Yeah, great, great looking, great looking relative strength line. And yeah, a high valuation stock, but a company that has really the top line growth has been there, you know, forever, has just been a great fundamental leader in the software group and outstanding fund sponsorship as well. And again, it's a group that doesn't have a ton of leadership at this point, but Datadog and a handful of others.

21:28Snowflake comes to mind. And, yeah, there's a few stocks still left standing in this group that have been able to maintain, you know, strong fundamentals. All right. One last point. I know you have to go on things. But Micron, one thing that could influence is that, okay, there's not much in the way of econ news. But, yes, there's delta earnings. But there's also SK Hynix, which will start trading in the U.S. I mean, I don't know how much it will really affect things. It already trades in South Korea. It's not like, oh, boy, nobody's heard of this company. But it will trade in the U.S. And so that'll be something that'll be SKHY.

22:02I don't think it's in market search yet. And the other thing is Taiwan Semi will get sales. I don't know how much that'll move things. Everybody knows Taiwan Semi's sales are strong. The real issue will be earnings next week. But there will be. So Delta, Taiwan Semi, and SK Hynix, fairly busy Friday, especially before earnings season really kicks in. There's actually a fair amount of news, you know, a Friday morning. But, yeah, just wanted to bring those things up. SK Hynix is a South Korean memory chip maker. So they're going to start trading in the U.S. They do. It's a Korean memory chip maker, and they're going to have their U.S.

22:42IPO tomorrow. So that's going to be a big deal. And then it reminds us that Taiwan Semiconductor is going to announce monthly sales data tomorrow ahead of their earnings report. next week. We've got Delta earnings tomorrow morning and then a very busy week of financial earnings report. But Justin and Webby, Mike Webster, will have the Stock Market Today video tomorrow. And that's going to do it for today. Ed, thank you very much. Appreciate your insight as usual. We'll see you next time. All right. That's going to do it for today. I have We've got the quarterly leaderboard scorecard webinar to go off to.

23:25So I'm going to say goodbye for now. We want to thank you very much for joining us. We do have our normal IBD live for Friday coming up tomorrow morning. So be sure to join us for that at 9.20 a.m. Eastern time, 6.20 a.m. Pacific time. So go to investors.com forward slash IBD live to try out a two week trial. And then, as I said, Justin Nielsen and Mike Webster will have your stock market today video tomorrow after the close to wrap up the week. We appreciate you watching and leaderboard subscribers can head over to leaderboard.investors.com for our quarterly scorecard webinar. We'll see you over there and have a great afternoon, folks.

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