Crude oil got a vital shot in the arm and related companies helped lead a broad rally in stocks today. Beaten-down Apple and fellow large caps in the tech and vast retail sectors also helped the Nasdaq outperform.
Apple (AAPL) helped drive the advance with a 2.6% gain, but shares of the iPhone and MacBook giant still trade more than 21% beneath an all-time high of 233.47.
In contrast, Intel (INTC), Microsoft (MSFT), Cisco Systems (CSCO) and a few more megacap techs are showing better strength in recent months. The three Nasdaq names trade 13%, 3% and 1% off their 52-week peaks, respectively. Intel is shaping the right side of what may become a long saucer pattern. Thus, patience is required before a breakout point emerges.
Starbucks (SBUX) and Verizon Communications (VZ) also continue to do better than Apple in recent months. Both stocks have joined Leaderboard and rallied past proper buy points to new highs after making a solid breakout. But Verizon, down 4% to 57.89, has now shaved its total gain from a 54.87 flat-base buy point from 10% to around 5%.
Such action is important, especially following the Nov. 28 follow-through session that confirmed a brand-new market uptrend may in fact be in the works. A Nov. 7 Day 7 follow-through ran out of gas quickly and the market plunged to new lows.
The tech-rich Nasdaq composite gained 1.2% with less than an hour to go in Monday’s trading session. The Nasdaq 100 rose 1.4% and is at a very curious level. Why? The popular index, tracked also by the Invesco Nasdaq 100 Trust (QQQ) ETF, is trying to cross back above both the 50-day and the 200-day moving averages.
Watch Not Just Apple But Also This Key Index In Stocks
Meanwhile, the Nasdaq 100’s 50-day moving average, sloping negatively (that is, downward) for more than seven weeks, slipped slightly below its long-term 200-day line.
Clearly, as seen on a daily chart, the action around both the 50- and 200-day lines suggests that some program-based trading on Wall Street has blunted the force of Monday’s rally. However, the Dow Jones industrial average, up around 1%, is climbing to the north side of its own 50-day moving average for the second time in a month.
The S&P 500, up around 1%, also is crossing its own 50-day line for the first time since October. Small caps underperformed. The S&P SmallCap 600 advanced 0.2%. It was up 1.2% initially.
Among IBD’s 197 industry groups, apparel, retail, oil drilling, homebuilder, gaming and data storage plays rallied 2% to 2.7%. But gaming software, packaged food, telecom services, truck transport and soap firms got trampled.
Volume is running sharply higher on both main exchanges vs. the same time on Friday. U.S. stock exchanges will close Wednesday in honor of the deceased President George H.W. Bush.
Financial Stocks Lead Market Up
Elsewhere, payments processors enjoyed solid gains and Mastercard (MA) broke out. The credit card and debit card giant sprang past a 208.96 buy point in an eight-week double bottom.
This base features two sharp sell-offs, and in Mastercard’s case, the second low rightly undercuts the first low.
The 5% buy zone goes up to 219.41.
Crude Oil Rises 4%
As West Texas intermediate prices reached above $53 a barrel, few oil and gas exploration, services and drilling stocks have managed to break out lately. But Brazil’s Petrobras (PBR), up more than 3% to 15.01, is now forming a legitimate base. The cup base’s left-side high is 17.20.
A handle may now be forming.
Please follow Chung on Twitter at @IBD_DChung for more on growth stocks and financial markets.
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