Four Stocks From Tuesday’s Hottest Sector Are Setting Up In Bases; S&P 500, Dow, Nasdaq Futures | Stock News & Stock Market Analysis

Futures for the S&P 500 index, Dow Jones industrial average and Nasdaq 100 were slightly lower early Monday morning. In Thursday’s regular session, the S&P 500 index and Dow Jones suffered their first declines in seven sessions, falling below their 50-day moving averages. The Nasdaq composite just edged lower — and the big-cap Nasdaq 100 edged higher — as the chip sector rallied. Chip plays Applied Materials (AMAT), Micron Technology (MU), Skyworks Solutions (SWKS) and Marvell Technology (MRVL) are all working bullish base patterns.

X Skyworks Solutions is a significant Apple (AAPL) chip supplier, while Applied Materials is an indirect iPhone X play.

The three main chip groups — Semiconductor Equipment, Semiconductor-Manufacturing and Semiconductor-Fabless — were among Tuesday’s very top performers out of the 197 industries that IBD tracks. The data storage group, which includes Micron Technology, also rallied strongly.

As for Apple, shares dipped 0.3% to 171.85 on Tuesday, holding above the 50-day line and slightly outperforming the S&P 500 index.

S&P 500 futures fell 0.3% vs. fair value after being higher earlier. Dow Jones futures sank nearly 0.3%. Nasdaq 100 futures dipped a fraction.

Applied Materials

Applied Materials rose 3% to 56.66 in Tuesday’s stock market trading. The chip- and display-equipment maker is closing in on a 58.83 double-bottom base. It’s a fourth-stage base. Late-stage breakouts are more likely to fail than first- or second-stage bases.

The relative strength line, which tracks a stock vs. the S&P 500 index, is still off its November peak. But the RS line, the blue line in the charts below, has rebounded since Feb. 8 as the stock has run up 24% in the past seven sessions, helped by a strong earnings report, dividend hike and stock buyback. The RS line has hit a short-term high, above where it was when the stock made the middle of its W-shaped pattern.

Applied Materials’ display-making equipment gives it some exposure to the OLED market. OLED screens are used on the Apple iPhone X, other high-end handsets, as well as TVs and other displays.

Micron Technology

Micron Technology advanced 1.6% to 44.90, continuing to rise from its 50-day moving average. The stock is closing in on a 47.08 double-bottom base buy point. The memory giant is in a third-stage base.

Micron’s RS line is still low. Look to see if that can rise above the middle of the double-bottom pattern ahead of and during a breakout.

Skyworks Solutions

Skyworks rose 2.2% to 106.41 hitting its highest level in nearly three months. The stock rebounded off its 200-day moving average, which is trading above the 50-day line, which is not good. Skyworks’ RS line has rebounded from a 13-month low and is at a very short-term peak, but is well off its longer-term highs.

Marvell Technology

Marvell Technology climbed 2.3% to 23.20 on Tuesday, rebounding from its 50-day line. You could view Marvell as a shallow double-bottom pattern with a 24.31 buy point. But if you look at Marvell as a regular consolidation, the entry is just one penny more, at 24.32.

The RS line is still lagging, but is right at 2018 highs.

Marvell will soon close its $6 billion acquisition of Cavium (CAVM).


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Originally posted 2019-09-19 23:09:48.


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