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Apple Lags These Five S&P 500 Techs Within 2% Of Buy Points

January 6, 2018 | By | Reply More

Big-cap techs Apple (AAPL), Nvidia (NVDA), PayPal (PYPL), Adobe Systems (ADBE) and Salesforce.com (CRM) are all well-known S&P 500 index components trading within 2% of proper buy points. But that doesn’t mean they’re all equally enticing.

X Apple outpaced the S&P 500 from May 2016 to May 2017, but since then has been moving with the market, lagging in the past couple of weeks. Nvidia, PayPal, Adobe Systems and Salesforce.com have a more recent history of S&P 500 outperformance than Apple. Unlike Apple, they significantly outperformed the market in the last week as they built the right side of bases.

Nvidia, PayPal, Adobe and Salesforce are all the No. 1 stocks in their industry groups. Then again, so is Apple.

Nvidia, PayPal and Adobe are all members of the IBD 50. PayPal, Adobe and Salesforce.com are also on the IBD Big Cap 20.

Apple

Apple closed Friday at 175, less than 1% from its 176.34 flat-base entry. Apple’s relative strength line, which tracks the stock’s performance vs. the S&P 500 index, has been slumping for the past two months. Apple rallied 3.4% last week, but that wasn’t much better than the S&P 500’s 2.6% gain and even with the Nasdaq’s 3.4% rise.

The RS line is actually below where it was last May, when Apple was last significantly outperforming the S&P 500.

Apple briefly broke out past the buy point on Dec. 18, but just barely and on volume that was only slightly above normal. The RS line wasn’t close to confirming the breakout. Shares quickly fell back until finding support near their 50-day line.

Apple could easily retake its buy point in the near future, and that move could work. But the odds of success are lower than with a truly leading stock.

Nvidia

Nvidia shot up 11.3% to 215.40 last week, closing in on a 218.77 cup-base entry. Nvidia crossed its 50-day moving average in volume on Wednesday, offering an entry point for aggressive investors.

Chip stocks, which had struggled in late 2017, roared back. The Philadelphia Semiconductor Index popped 5.8% for the week, with several chip stocks moving back above their 50-day lines and carving the right side of bases.

Nvidia will have a presence at the CES 2018 tech show in Las Vegas next week.


IBD’S TAKE: Check out this Investor’s Corner or on how the 50-day moving average or 10-week line offers buying opportunities.


PayPal

PayPal climbed 6.9% last week to 78.70, 1% below a 79.48 flat-base buy point. PayPal retook its 50-day line on Wednesday, but volume was only 11% above normal.

Leading stocks’ performance is closely tied to their industry groups. And payment stocks are once again acting well. Square (SQ) moved back over its 50-day line Friday after a big retreat. Mastercard (MA) broke out past a buy point during the week, but on below-average volume.

Adobe Systems

Adobe Systems advanced 5.8% last week to 185.34, less than 1% from a 186.37 flat-base entry. Adobe also reclaimed its 50-day line, but on below-average trade.

Salesforce.com

Salesforce.com rose 5.7% to 108.10 during the week. That’s about 1% from a 109.29 entry in a flat base. Salesforce moved above its 50-day on Tuesday, but in average volume.

One more observation on Nvidia, PayPal, Adobe and Salesforce. After running up so much last week, these stocks — and the overall market — are ripe for a pullback. That would not necessarily be a bad thing. Ideally, the stocks will ultimately break out in heavy volume, moving convincingly past the buy points to let their RS lines confirm the advance.

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