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These 6 Top Stocks Reclaim Their 50-Day Lines As S&P 500, Dow Jones Pass Tests | Stock News & Stock Market Analysis

Futures for the S&P 500 index, Dow Jones industrial average and Nasdaq 100 were little changed late Monday after a huge stock market rebound during the regular session. The S&P 500 index and Dow Jones rebounded from around their 200-day moving averages. Meanwhile, Microsoft (MSFT), Cisco Systems (CSCO), Apple (AAPL), Nvidia (NVDA), Alibaba (BABA) and Applied Materials (AMAT) were among leading stocks to reclaim their 50-day moving averages.

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These tech giants share some common features. Microsoft, Cisco Systems and Nvidia all saw their relative strength lines, which track stocks’ performance vs. the S&P 500 index, hit record highs. Nvidia and Alibaba are among IBD 50 stocks expected to deliver accelerating earnings growth in their current quarters. Microsoft, Cisco and Apple are all Dow Jones components.

Only Alibaba and Applied Materials still have valid buy points. (Alibaba and Applied Materials also have the highest Composite Ratings of these six stocks, with Alibaba at 97 and Applied Materials at 98.) The other stocks have work to do on forming new consolidations.

Among other notable moves above the 50-day line, Lockheed Martin (LMT) and General Dynamics (GD) closed above that support, as defense contractors are among the stock market leaders. The iShares PHLX Semiconductor (SOXX) and Innovator IBD 50 Fund (FFTY) were key ETFs regaining their 50-day lines.

Keep in mind that Monday was just one good day. The S&P 500, Dow Jones and even the Nasdaq still look shaky, with the stock market uptrend under pressure. Be very cautious about any new purchases.

S&P 500 index futures rose a fraction vs. below fair value. Dow Jones futures climbed 0.1%. Nasdaq 100 futures were up 0.2% vs. fair value.

Microsoft

Microsoft vaulted 7.6% to 93.78 in strong volume. Morgan Stanley named Microsoft a “top pick” and on its way to a $1 trillion market cap, thanks to its strong growth in cloud computing.

Microsoft briefly cleared a 96.17 entry point from a flat base earlier this month, but eventually fell too far for that buy point to remain valid.

Cisco Systems

Cisco gained 3.9% to 44.06 on volume that was modestly below average, well extended from a 34.20 cup-with-handle buy point finally cleared decisively in mid-November. Cisco appears to be turning the corner in its shift, aided by acquisitions, from hardware such as routers and switches to faster-growing services and software.

Apple

Apple rose 4.75% to 172.77 in somewhat lower volume, ending a five-day skid. Apple cleared a messy, V-shaped, high-handle cup base buy point of 180.58 earlier this month, but that quickly faltered. That entry is no longer valid, even with the RS line at a new high.

Nvidia

Nvidia popped 4.9% to 244.48 on Monday. Like Cisco and Apple, volume was slightly below normal.

Nvidia CEO Jensen Huang will give the keynote address at the company’s GPU Technology Conference Tuesday morning.

Alibaba

Alibaba rose 5.1% to 190.50. The Chinese e-commerce giant is working on a 206.30 buy point. Its RS line isn’t too far off record highs, but also has gone sideways for the past seven months.

Applied Materials

Applied Materials shot up 5.6% to 58.47, just below a 58.83 double-bottom buy point. Applied Materials cleared that entry decisively in early March and rose to a record 62.40 on March 12. Shares of the chip-equipment giant then pulled back, selling off significantly last week, but not quite enough to trigger an absolute must-sell signal.

Fellow chip-gear giants Lam Research (LRCX) and ASML (ASML), which closed above their 50-day lines Friday, also rebounded Monday to just-below still-valid buy points.

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