Stock Market Today: Nasdaq Hits 7000; Will This Bitcoin ETF Reach $4,000? When To Sell Apple | Stock News & Stock Market Analysis

Dow Jones industrial average component Apple (AAPL) paced a broad rally in stocks Monday on Wall Street’s confidence that President Trump will sign major tax reform legislation that will help U.S. corporations become more competitive with their overseas peers and help many working Americans across the country.

X Apple rose more than 1.6% to 176.89, barely surpassing a 176.34 entry in a new flat base in mildly lower-than-average turnover.

At 3:45 p.m. ET, the Dow Jones industrial average saw at least eight stocks rise 1 point or more and nearly 0.6% in late-afternoon trading. The S&P 500 — boosted by retail, consumer-electronics, steel and internet-networking shares — matched that gain.

The Nasdaq composite led with a 0.8% gain and hit as high as 7003.89, stretching its year-to-date advance to 30%. Volume is running lower on both main exchanges due to Friday’s quadruple witching of expiring options and futures.

The S&P SmallCap 600 rallied 1.3% while the Dow transports rolled 1.2% ahead.

Meanwhile, Bitcoin Investment Trust (GBTC) had one of its best gains in recent months as the Bitcoin-tracking ETF soared 27% to 3,448.90 in heavy trading and leapt past 3,000 for the first time. The exchange traded fund has now risen 250% from a Nov. 22 breakout past 985.10 in a deep cup with handle. Average volume over the past 50 sessions now tops 100,000 shares a day.

At this point, it would be dangerous to try to short Bitcoin given the strong interest in the futures market and the overall ebullience of buyers. While technically Bitcoin Investment Trust is meeting the textbook definition of a climax run by running 25% or more in less than two weeks, the breakout just occurred less than one month ago.

Based on IBD research, the climax run serves as a classic topping signal only after a stock has broken out of a good base and run up at least for 18 weeks.

Going back to Apple, the megacap tech also is staging its fourth breakout of the year.

The first breakout came out of a stage-one bottoming base as the marketer of iPhones, iMacs and cellular-enabled wearables busted out of a good cup with handle at 118.12 on Jan. 6.

Volume on Monday is running at a mild pace, but that doesn’t necessarily mean the current breakout will fail. Indeed, a heavy increase in volume, 40% above average or more, is ideal at the moment a stock surpasses a correct buy point. But in some cases turnover may be muted because fund managers are awaiting important news or an earnings report. In other cases, volume may be dull throughout the entire market.

More important, investors should keep an eye out for clear sell signals that reflect a notable change in a stock’s character. So watch in case Apple breaks down sharply below the 50-day or 10-week moving averages in furious volume, cracks through the long-term 200-day moving average, or falls 8% below the latest buy point, in what’s known as the golden rule of selling stocks.

The other two breakouts for Apple came on Aug. 2, when the stock lifted past a 156.75 entry in a flat base, and on Oct. 27 as shares raced past a 160.97 entry in a narrow cup with handle. Volume on that session jumped 64% above its 50-day average.

Apple’s current average turnover of the past 50 sessions is 27 million shares.

Apple is reportedly seeing healthy demand for its ultraluxury iPhone X model in China, one of the company’s major markets. Meanwhile, Apple’s proprietary IBD ratings look good, ranging from a 95 Composite Rating on a scale of 1 to 99 on IBD Stock Checkup to an 86 Relative Price Strength Rating and an A for SMR (Sales + Profit Margins + Return on equity). On Jan. 1, the Composite was a lowly 51, the RS a 59.

Apple’s return on equity in its September-ended fiscal 2017 was a fabulous 36.9%. However, long-term debt as a ratio to shareholders equity has been rising, and that usually helps boost return on equity. As debt grows, equity gets squeezed, which lowers the denominator in the ROE ratio.

Apple has staged a wonderful turnaround, with earnings rising 2%, 11%, 18% and 24% vs. year-ago levels in the past four quarters. Revenue grew 3%, 5%, 7% and 12% over the same period.

Fiscal Q1 profit is seen rising 12% to $3.77 a share.

Elsewhere in the stock market today, Indian lender HDFC Bank (HDB) lost early gains to trade flat at 98.55. The stock has made a nice recovery back above the 50-day moving average after diving 5.6% in triple normal turnover on Oct. 25. Shares fell hard that day despite a robust third-quarter report in which earnings increased 22% to 73 cents a share on a 19% rise in revenue to $3.56 billion.

Now, HDFC is back near a stubborn upside resistance level near 100. A new four-month flat base has formed with a 100.36 entry.

HDFC, which holds an $84 billion market cap and has superior IBD Ratings vs. industry compatriot Icici Bank (IBN), has a solid RS Rating of 84 on a scale of 1 to 99. IBD research of past great stock market winners has found that the average RS Rating at the start of a big run is 87.

In contrast, Icici sports a decent Relative Price Strength (RS) Rating of 77, meaning it’s outperforming 77% of all publicly traded companies over the past 12 months. But the Composite Rating on IBD Stock Checkup is disappointing at 45.

Analysts polled by Thomson Reuters see HDFC’s earnings rising 32% to 87 cents a share, which would be a quarterly record.


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Originally posted 2017-12-19 11:48:59.


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