Stocks Up; Apple Retakes Buy Point; Is It Time To Buy Alphabet Again? – Investor's Business Daily

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Apple (AAPL) gained ground and was on the verge of climbing back above a 156.75 buy point as the iPhone giant helped bump the major indexes higher in afternoon trading Wednesday.

XAutoplay: On | OffApple had broken out of an 11-week flat base at 156.75 on Aug. 2 following a solid fiscal third quarter. (EPS rose 18% and revenue 7%, the biggest top-line increase in seven quarters.) The stock is now forming a new flat base with a 165.04 buy point.

The Nasdaq composite edged 0.1% higher and is holding on to last week’s gain of more than 1.4%. The S&P 500 and Dow Jones industrial average were both up less than 0.1%.

The Nasdaq 100 also rose 0.1%. The Russell 2000 was virtually flat. Volume is running mildly lower vs. the same time Tuesday on both main exchanges.

Apple had not gained a lot of ground after its Aug. 2 breakout before falling back the proper entry and below the 50-day moving average. While the rise back above the 156.75 is not an ideal entry right now, investors could wait to see if the stock retakes the 50-day moving average in strong volume.

Earnings had dropped 10% in the fiscal year ended in September 2016 on an 8% slump in revenue.

Fellow Nasdaq component Alphabet (GOOGL), which has launched a major advertising campaign for its new smart speaker called Google Home Mini, rose more than 1% and breached the 1,000 level for the first time since July 24. That gain places the megacap internet search giant in a good position to potentially break out from a new flat base with a 1,006.29 buy point.

Alphabet’s earnings have risen 27%, 7%, 28%, and 27% vs. year-ago levels in the past four quarters. The Street expects Q3 profit to rise 15%.

Elsewhere, Delta Air Lines (DAL) ramped up 1% to 53.26 in fast turnover and added more work to the right side of a new base. The Atlanta-based air transport giant reported a 6% rise in third-quarter revenue to $11.06 billion, matching the biggest increase in 12 quarters. Earnings slipped 8% to $1.57 a share but were still mildly above the consensus forecast.

Airlines were among the day’s best industry groups, joining steel, steel alloys, metal distributors, diversified medical and internet content firms.

In the IBD 50, Nvidia (NVDA) gained 1% to 190.84 and has now stretched its gain from a 174.66 buy point in a flat base to more than 9%.

The fast-growing maker of GPUs (graphics processing units) and chip sets for new industries including deep learning and self-driving cars is No. 9 in the IBD 50. Earnings in the October-ending fiscal third quarter are seen growing 13% to 94 cents a share, on top of an 89% leap in the year-ago quarter.

Nvidia is also making gains since its addition to IBD’s Swing Trader service.

The Federal Reserve is slated to release minutes from its October meeting on interest rates at 2 p.m. ET.


IBD’s TAKE: The IBD 50 has showcased companies that are the new powerhouses of the U.S. and global economy. Institutional investors seek to find firms with exceptional earnings and sales growth, an outstanding product or service, and the highest pretax margins and return on equity in their industries. As seen in a graph on Page B4 of the IBD Weekly, the price-weighted IBD 50 shows a total return of 750% from April 11, 2003 to Dec. 31, 2016, equal to an average annual gain of 16.9%. The S&P 500 has risen 242% over the same period.


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