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Nasdaq, NYSE Stock Twitter Lead Gains; Leaderboard Stock Rises 47%

The Nasdaq composite paced a solid start for stocks today in the month of June, rising more than 1.5% in early-afternoon trading, and Lululemon helped drive big gains.

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The Nasdaq-listed marketer of premium-priced yogawear and athletic leisure clothing surged more than 16% and got as high as 123.46. Volume has already topped 9 million shares, more than four times its 50-day average 2.2 million shares.

An Apparel Leader

Lululemon (LULU), a member of IBD Leaderboard since Feb. 7, has now expanded its gain since rising past a follow-on entry point near 84 on March 28 to nearly 47%.

Stocks that make the Leaderboard list show daily and weekly charts that are annotated in real time by IBD’s senior stock market writers. These chart annotations help investors locate exact buy points, sell signals, and price areas in which to consider adding a small amount of shares to a winning existing position.

The Nasdaq, at 7547, is now less than a 2% gain away from taking out its all-time peak of 7637.27, notched on March 13.

The Nasdaq 100 rose 1.6% as FAANG firms, software, medical systems and some cyclical stocks joined the buying rush. A strong May U.S. jobs report and a 1.8% jump in construction spending for April helped boost investor confidence.

See the exact details of these economic reports and the Econoday forecasts here.

The S&P 500 and the Dow Jones industrials rose 1% to 1.1%, while the small-cap S&P 600 lifted nearly 1%. Volume is running sharply higher on the NYSE vs. the same time Thursday and roughly even on the Nasdaq.

Tech and Internet Content Firms Advance

The yield on the benchmark U.S. Treasury 10-year bond rebounded back to 2.89%.

Software virtualization expert VMware (VMW) and social media network Twitter (TWTR) also joined the breakout train.

The former gapped up and surpassed a 145.25 buy point in a deep cup with handle. VMware reported a 19% jump in earnings to $1.26 a share in the April-ended quarter, slightly accelerating past EPS increases of 18% and 17% in the prior two periods. Sales rose 14%, matching the prior quarter’s gain.

VMware’s cup base shows a steep, fast decline of 34% on the cup’s left side, hitting the maximum decline generally allowed for this type of bullish chart pattern.

The Take On Twitter

Twitter rallied more than 4% to 36.31 and continued to sculpt the right side of a cup base that stretches back to the stock’s peak of 36.80 on March 14.

Analysts surveyed by Thomson Reuters see Twitter growing Q2 profit by 113% to 17 cents a share. Earnings growth has accelerated from a 22% year-over-year decline in Q1 of 2017 to flat growth in Q2 2017, then increases of 11%, 73% and 129% in the prior three quarters.

Stock Checkup gives Twitter a top-notch 99 Composite Rating on a scale of 1 to 99. The SMR Rating, which tracks sales growth, profit margins, and ROE, is a neutral C due to a lower-than-ideal return on equity (7% in 2017). However, pretax margin jumped to 21% in 2017, likely the highest in the company’s history.

(Please follow Saito-Chung on Twitter at @IBD_DChung for more commentary on growth stocks, breakouts, chart action, and financial markets.)

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