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Stock Market Higher; Alibaba Nears A Potential Breakout

The stock market was squarely higher in morning trade Monday, amid softening trade talks between the United States and China. Nvidia (NVDA) and Alibaba Group Holding (BABA) were two solid performing stocks within the IBD 50 in the stock market today. (For updates on this story and other market coverage, visit Stock Market Today.) 

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The tech-heavy Nasdaq advanced 0.6%, while the S&P 500 and the Dow Jones industrial average followed up with gains of about 0.4% each. All three are above their 50-day moving average lines.

Among the Dow stocks, Boeing (BA) was a big gainer in early trade, up almost 1%. The stock is shaping the right side of a potential base formation.

Meanwhile, Apple (AAPL) inched higher and is trading right at new highs. Shares are just above the 5% buy range from a 179.04 double-bottom buy point.

Leaderboard name Lululemon (LULU) saw its price target raised from 107 to 111 at JPMorgan early Monday — a near-13% premium to Friday’s closing price. Shares edged higher and are trading just off its highs. The stock has risen nicely since the company reported strong earnings results on March 27. Earnings growth accelerated for a second straight quarter to 33%, while revenue growth accelerated for a third straight quarter. Both are bullish fundamental factors.

Among leading chip stocks, Applied Materials (AMAT) and Lam Research (LRCX) are approaching potential double-bottom buy areas with advances of 2.3% and 2.6%, respectively. Both stocks have rallied nicely since late April. Applied Materials is nearing a 58.50 entry, while Lam showed a 212.95 buy point. However, both stocks have lagging relative strength lines.

Inside The IBD 50

Among the top growth stocks, graphics-chip maker Nvidia was just out of buy range from a double bottom’s 239.35 buy point, according to MarketSmith’s chart analysis. Shares moved up about 0.7% early Monday. The leading stock reported strong earnings results last Thursday, but forecast a big drop in cryptocurrency chip sales in the current quarter, sparking a 2.2% retreat Friday.

Elsewhere, Chinese leader Alibaba moved up over 2%, as it continues to trade near a 201.60 double-bottom entry. The stock’s relative strength line has snapped back in recent weeks and is approaching a new high. The RS line measures the stock’s performance compared to the broad market.

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