Stocks Back Off From New Highs; Apple Tests Key Support Level | Stock News & Stock Market Analysis

The major market averages were turning red in early trade Thursday, as chip leader Lam Research (LRCX) neared a potential buy point in the stock market today. The tech-heavy Nasdaq and S&P 500 had slipped below their break-even marks, while the Dow Jones industrial average was up 0.1%.

X Among the Dow Jones industrials, Caterpillar (CAT) reversed from early gains to fall nearly 2% after handily beating Q4 earnings and sales targets. Shares were near their highs, about 20% above a 140.54 flat-base entry.

Elsewhere in the Dow, Apple (AAPL) was testing support at the 50-day line with a 0.8% decline. The stock has had trouble maintaining its 176.34 flat-base entry and is back under it.

Among companies reporting earnings, Lam Research (LRCX) jumped higher before backing off after announcing better-than-expected earnings and sales results late Wednesday. The stock is building a cup-shaped base with a 219.80 potential entry. While the relative strength line is not confirming the breakout by making a new high, it has significantly strengthened over the last week or so.

Other chip leaders were on the move higher, including Applied Materials (AMAT) and Nvidia (NVDA), which moved up 0.2% and 0.5%, respectively. Applied Materials was eyeing a potential breakout above a 60.99 cup-shaped base entry, while Nvidia continued to trade near its highs —  about 10% above a 218.77 cup-base buy point.

Despite the strength in the overall chip sector, Teradyne (TER) fell over 2% after providing Q1 revenue guidance that was mostly below the Street’s forecasts. The stock is still about 2% above a 44.73 flat-base entry after a breakout on Jan. 4.

Meanwhile, Fiat ChryslerAutomobile (FCAU) raced 1.2% higher after maintaining its bullish 2018 forecast. The automaker is up more than 30% from a 18.43 flat-base buy point.

Elsewhere, American Airlines (AAL) and Southwest Airlines (LUV) were lower after both companies surpassed the Street’s estimates. American dropped nearly 4%, as the stock struggles to maintain its 53.84 cup-with-handle entry. Southwest fell another 4% after Wednesday’s brutal sell-off, sparked by concerns of a price war within the industry. Shares are trying to find support at the 50-day line, but are below it now.

Inside the IBD 50, Universal Display (OLED) looked to extend its losing streak to five trading sessions with another over-4% decline. The stock has swooned this week, dropping over 15% and piercing its 50-day line in heavy volume. In the process, the stock triggered the 7%-8% loss-cutting rule from a late-stage 192.85 cup-shaped base buy point.


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Originally posted 2018-01-29 09:16:50.


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