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Stock Market Rally Ends Bad Week; Time To Buy Apple?

Leading growth stocks rallied sharply in the last hour of trade Friday as the key stock market indexes closed above or just shy of their 200-day moving average lines.




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The Nasdaq surged 2.3%, the S&P 500 rallied 1.4% and the Dow Jones industrial average rose 1.1%. Midday, they had pared much of their early gains. Small caps continued to lag as the Russell 2000 gave up 0.2% after cutting the bulk of its losses.

Volume was slightly lower on the NYSE and Nasdaq though, according to preliminary data. The major market indexes had been on track to close with steep weekly losses of around 5% each, but did better. The Nasdaq fell 3.8%, the S&P 500 shed 4.2% and the Dow skidded 4.1%. It was still the worst week for the trio since the week ended Feb. 9.

Visa (V) and Walgreens Boots Alliance (WBA) led the Dow industrials with 4.7% and 3.7% respective jumps. Visa found support after tumbling near its 200-day moving average Thursday. Walgreens staged a strong rebound after finding support at its 50-day line. It’s now recovered almost all its losses from the prior two sessions. On Thursday, the stock fell 2% as the drugstore chain’s fiscal Q4 earnings beat but revenue missed.

Tech Stocks Rally

Tech stocks were some of the best performers Friday, after getting pummeled the prior two sessions. On the Dow, Apple (AAPL), Cisco (CSCO) and Microsoft (MSFT) were among the top blue chip gainers, rising more than 3% each. Cisco and Microsoft are still below their 50-day lines, while Apple reclaimed the support line with a 3.6% advance.

New Chance To Buy Back Apple?

Apple could set up a new follow-on entry point with a decisive move above the 50-day line or the 10-week moving average on a weekly chart. That would mark its first pullback to the line since an Aug. 1 breakout past a 194.30 flat-base entry. But it’s important to keep in mind that all buys are highly risky with the market in correction.

As noted in today’s IBD Stock of the Day column, Apple has benefited from bullish sales reports about its newest iPhone models, released Sept. 21. Next Friday, the Cupertino, Calif.-based company will start taking preorders for the iPhone XR, a new midrange handset.

Apparel makers, software and internet retailers were among the top sector gainers in the stock market today. Financials, utilities and homebuilders led the downside.

Follow-On Buy Points May Emerge In This Stock Market

Most IBD 50 stocks advanced Friday. Only five were lower. Biggest upside moves included Intuit (INTU), Match Group (MTCH), Netflix (NFLX) and Abiomed (ABMD), with each rallying 5% or more.

Dating service provider Match Group could set up a buy opportunity as it rises from its 50-day line. Netflix found support at its 200-day line to continue work on a potential base started in June.

The Innovator IBD 50 ETF (FFTY) gained 2.8% to halt a six-session slide.

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