This Index Beats The Nasdaq As Stocks Rally, Chips And Computer Lead Again | Stock News & Stock Market Analysis

Computer, biotech, leisure and telecom firms helped the Nasdaq composite show some mild outperformance against other key indexes on Tuesday.


 Yet more important, stocks are showing a willingness to rally broadly amid a deepening well of uncertainty over U.S. trade policy; the ongoing Nafta talks among the U.S., Canada and Mexico; and how to deal with North Korea’s nuclear ambitions.

A strong bull market often climbs a wall of worry. Meanwhile, bullishness among newsletter writers polled by Investors Intelligence has cooled off, a good sign for market psychology. Excessive optimism usually means that few willing buyers remain to prop up stock prices.

The bulls ratio is currently at 48.1%, off from the January peak of 66.7%. IBD’s Psychological Market Indicators feature updates the bulls and bears ratios every Wednesday after the market close.

The Nasdaq gained 0.5%, good for a third straight gain. The Nasdaq 100 rose nearly 0.4%. However, Tuesday saw small caps really shine. The Russell 2000, a laggard in 2017 and year-to-date in 2018, and the S&P SmallCap 600 both jumped 1.1%.

Also important, volume picked up on the Nasdaq all-electronic exchange vs. the prior session, according to early figures. Such action points to institutional accumulation, which is a necessary ingredient for any meaningful market rally to last.

The S&P 500 edged 0.3% higher, while the Dow Jones industrial average finished slightly up as five of its 30 components rallied 1 point or more.

Lately, the scene on Wall Street was littered with distribution, or significant declines by the major benchmarks in higher turnover vs. the prior session. From Feb. 21 to March 1, the Nasdaq got hit with four such distribution days in a seven-session span, causing IBD to downgrade the market’s current outlook to uptrend under pressure.

Watch for future changes in the current outlook by reading The Big Picture column.

The day’s top industry groups included chip equipment, data storage, metal ores, gold mining, coal, movies, RV makers and homebuilders, all gaining 2% or more.

SVB Financial (SIVB), data storage and memory chip expert Micron Technology (MU), China’s e-commerce specialist Baozun (BZUN), ServiceNow (NOW) and (CRM) all showed gains of 1% or much more and ramped to new highs in solid turnover.

SVB rolled past a 263.19 flat-base buy point in volume modestly above average. Micron is extended after a breakout past a 47.08 entry in a classic double-bottom pattern.

Baozun soared more than 31% in huge turnover on superb Q4 results (earnings up 133% to 42 cents a share and revenue up 31% to $240.4 million, a quarterly best). The small-cap member of IBD’s internet retail group jumped well past a 40.08 buy point in a large, deep cup with handle. Watch for potential follow-on entry points to emerge.

Casa Systems (CASA), a new member of the IBD 50 and December 2017 IPO, rallied more than 3% to 24.27 and is pushing further past a 22.60 buy point in a narrow IPO base.

Casa, a play on broadband infrastructure spending, also got featured on The New America page, part of the coverage found in IBD Weekly.


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Originally posted 2019-09-19 23:10:34.


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