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Stock Market Today: Dow Leads Stocks Up; Will Bitcoin ETF Recover From Its Climax Run? | Stock News & Stock Market Analysis

Major indexes continued to stage a healthy rebound, breakouts gained more steam, and a key Bitcoin-driven ETF showed more signs that a longer-term correction in the alternative digital currency may be in the works.

X Bitcoin Investment Trust (GBTC), which staged a tremendous price run of more than 1,500% in 2017, plunged as much as 18.3% intraday before shaving a majority of those losses.

Yet shares in the Bitcoin-tracking exchange-traded note still dropped more than 7% to 1607 and severely undercut the critical 50-day moving average for the first time since peaking at 3,522 in December. Concerns of South Korea mulling a move to ban cryptocurrency trading are apparently still weighing on traders.

The Nasdaq composite, the leading major index in 2017 with a 28.2% gain, rose nearly 0.8%, while the S&P 500 matched that advance. The Dow Jones industrial average is outperforming with a 0.9% spurt, helped by gains of 1 point or more in at least 12 of the 30 components.

The Dow Jones industrial average rallied 25.1% in 2017.

The Dow transports edged up 0.3%; the Russell 2000 was up almost 0.6%. Volume is running mildly lower on both exchanges following a distribution day, or session of unusually intense institutional selling, on both the Nasdaq and the S&P 500.

Top-ranking stocks as seen in IBD’s key stockpicking screens mostly thrived, with several hailing from the semiconductor and related sectors. Electronics-Semiconductor Equipment ranks first among 197 industry groups tracked by IBD with a 3.5% lift. Homebuilding, computer networking, leisure products and oil drilling stocks also led the upside with gains of 2% each.

Universal Display (OLED), No. 1 in the IBD 50, moved out of buy range as shares rolled nearly 3% higher to 204 in volume running more than 25% above normal levels. The expert in organic light emitting diodes for a range of electronic devices broke out past a 192.85 entry in a six-week cup without handle on Jan. 8 and has acted well since then. The 5% buy zone goes up to 202.49.

Universal Display has sported four quarters in a row of excellent top and bottom-line growth.

Laser maker Coherent (COHR) (breakout at 320.83), scientific instruments maker IPG Photonics (IPGP) (cleared a cup at 248.33), semiconductor lithography systems expert ASML (ASML) (186.47 buy point in a solid flat base) have also broken out and shown positive action.

Lam Research (LRCX), a huge winner since 2015, is building a base. Watch to see if shares can remain above the key 50-day moving average. If it does, it would boost the chances that the wafer cleaning and etching systems supplier can continue to flesh out the right side of a potential new base.

Lam had cleared a 170.10 entry in a good flat base on Sept. 11 and rallied 29% before correcting in price. One of IBD’s key sell rules is to take at least partial gains when a stock breaks out and advances at least 20% to 25% from the proper entry.

Going back to Bitcoin Investment Trust, IBD noted in a prior Stock Market Today column how a definitive cross below the 10-day moving average offers a good exit point for short-term traders. Bitcoin Investment Trust violated its 10-day line on Dec. 20, just two days after it posted a closing peak of 3,463. Given the climax-run-style move that it made in mid-December, following strong gains earlier in the year, it’s sensible to expect that it will take weeks, if not months, for the ETF to set up another proper buy point.

Bitcoin, itself, took years to digest strong gains after it broke out in October 2013 and ran up from a breakout near 120 to a peak of 1,087 just two months later, an 800% gain in just two months. It took more than three years of basing before Bitcoin eclipsed that high.

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