Apple, Applied Materials Stock Charts Improve; Arista Networks, LogMeIn Tumble Late: S&P 500 Futures | Stock News & Stock Market Analysis

Futures for the S&P 500 index, Dow Jones industrial average and Nasdaq 100 rose modestly early Friday.

X On Thursday, the S&P 500 index and Dow Jones reclaimed their 50-day moving average, a day after the Nasdaq composite did. Apple (AAPL), Applied Materials (AMAT) and Baidu (BIDU) also rose above that key support, and in strong volume.

Meanwhile, hot techs Arista Networks (ANET) and LogMeIn (LOGM) tumbled after hours following their earnings reports.

The market is in a confirmed uptrend, rallying strongly for the past five sessions. That means investors should be looking for possible buys. But after such a quick stock market correction and rapid recovery, many leaders have messy charts, to say the least. Also, after five straight gains, the major averages easily could have a pullback.

S&P 500 futures rose 0.2% vs. fair value. Dow Jones futures were up 0.3%. Nasdaq 100 futures climbed 0.4%.


Apple rose 3.4% to 172.99 in Thursday’s stock market trading, retaking its 50-day moving average in volume that was 39% above normal. Apple got a boost as Warren Buffett’s Berkshire Hathaway and David Tepper’s Appaloosa Management disclosed that they added Apple shares in Q4.

Apple has risen for five straight sessions, rebounding 15%, with above-average trade in four of those days.

Meanwhile, Apple’s relative strength line, which tracks a stock’s performance vs. the S&P 500 index, has been on the rise since Feb. 2. The RS line, the blue line in the chart below, had been lagging for nearly three months, hitting a one-year low on Feb. 2.

While not shown on the chart, the RS line has now crossed over its own 50-day average, another positive signal.

Apple does not have a clear buy point, but its recovery is encouraging, especially given its weight in the major averages.

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Applied Materials

Applied Materials dithered for much of Thursday, but ultimately rallied 3.9% to 53.99, reclaiming its 50-day line in double normal volume. Late Wednesday, the chip equipment giant reported strong earnings and guidance, doubled its dividend and announced a new $6 billion buyback. Applied Materials also has risen for five straight sessions, four of which were in higher volume. The RS line also turned up, also nudging past its 50-day.

Applied Materials is in a double-bottom base with a 58.83 buy point.


Baidu vaulted 5.2% to 248.20 on Thursday, its fifth straight gain, all in heavy volume. On Tuesday, the Chinese search giant reported strong earnings and revenue.

The RS line also has turned up, crossing above its own 50-day line, like the RS lines of Apple and Applied Materials.

Baidu is in a consolidation with a 275.07 buy point, though aggressive investors could  use 265.87 as an early entry.

Arista Networks

Arista Networks earnings sped past views late Thursday, but revenue didn’t beat by much, while its sales and gross margins guidance was light. Arista shares plunged 14.5% in late trading. The stock had closed up 1.9% to 307.96, hitting a record high intraday.


LogMeIn edged past earnings views, but gave revenue guidance that was below estimates. LogMeIn fell 7.3% to 124 in late trading, suggesting the stock on Friday will undercut a 128.45 buy point from a cup-with-handle base cleared Wednesday. LogMeIn rose 2.8% to 133.80 during Thursday’s session.

Earnings Options Strategy

Overnight trading doesn’t always translate into how a stock will behave at the open or close of the following session. Still, the initial sell-offs by Arista Networks and LogMeIn underscore the risks of holding or buying a stock just before earnings. IBD has an earnings options strategy that can let you reap the rewards from post-earnings gains while minimizing your losses.


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Originally posted 2018-02-16 10:13:43.


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