S&P 500 Enters Power Trend; Broadcom, Comfort Systems, NextEra Energy In Focus | Stock Market Today

[Music] [Music] good afternoon everyone and welcome to stock market today it's Ali corm Ed Carson with a breakdown of the action in today's session Friday August 30th the last day of the month and Ed you are not Mike Webster but you are a great Friday co-host and I'm so glad GL to see you it's great to see you too Ally and uh want to take a look at a few stocks a lot of interesting action today uh I want to take a look at broadcom Comfort Systems and next era energy okay well we'll take a look at those three stocks but first let's take a look at the major indexes and I actually want to start with the S&P 500 up 1% by sessions close the NASDAQ on the day up 1.1% the Dow up a little more than a half a percent and the Russell 2000 up about a half a percent so circling back to the S&P 500 here H looks like a pretty strong close to me we've started a power Trend and you were telling the team is a little ironic uh certain someone having a a power outage at the start of a power Trend but yeah so that does show it's not necessarily A Buy Signal right away but yeah nice action here uh if we do get over a percent I guess we call that a subsequent follow through day but right at the top here of of this range would be nice to get to the NASDAQ well the S&P actually I think the volume of the N might be lower the NASDAQ was clearly a subsequent follow through day so that one is a positive to get above the 50-day line but back to the S&P yeah we we have you know today marked the start of a power Trend yesterday could have been but we we didn't quite close positive so now we have the various factors I mean 50-day line Rising we're above the you know 21 day line above the 50-day line for enough days and so that's just sort of new phase it's saying things are really sort of have picked up momentum uh it's not necessarily a huge Buy Signal by itself but it's the kind of thing that if you do see buying opportunities it GES you make you feel like you can be a little more aggressive it just sort of gives you that edge it's sort of like that plus Factor it doesn't mean you necessarily run out today I think getting Above This range would be really important uh especially for you know like the S&P and getting the NASDAQ more decisively above its 50-day line would be things you know just because those two together because 50 it wouldn't take much for the NASDAQ which had an inside day today it was a subsequent fall today but it was an inside day so it's an odd thing it almost was it was in danger of going below the 21 Day line would be a negative signal so the market is still at sort of uh you know it's still some mixed signals out there but if the NASDAQ can move move up there with the S&P you're going to see a lot of buying opportunities there's a lot of stocks that look like the S&P and look like the NASDAQ uh so I think investors definitely should be taking note I think the power Trend also is another way stepping back we've gone a long way since August 5th and so even though today was this week was sort of mixed I think the S&P was essentially flat for the week uh the NASDAQ was down oh the S&P did end up tunning higher it was a really nice last 20 minutes or so last hour uh but you know sort of flat but we've come a long way and I think that power Trend sort of says that you know we we've made some real progress it's not just a you know this rally sort of taking hold and uh so a lot of a lot of generally positive action uh over the last few weeks right and with a power Trend that means we're trending above some shorter term moving averages in addition to a number of other factors but when you get these trending markets like you said that's when you uh can be more aggressive as long as those conditions hold as long as you're making progress as long as you're seeing the stocks underneath the surface setting up and acting right so uh this is this is a good development uh but as you mentioned Ed it wouldn't take much uh for the NASDAQ here to not look too great um we have made a lot of progress so one could say right here hey maybe this is the ideal scenario to unfold after the power that we saw it felt like uh things were getting stretched and we needed them to pause form handles these proper bases well maybe now we're getting that so are we you know right on the verge of some really compelling uh buying opportunities in the the tech sphere here maybe leaning more towards the non-tech areas with that S&P 500 outperformance or are we going to see um a further deterioration here of the NASDAQ it wouldn't like you said it wouldn't take much either which way yeah and I think that's why you know investors who probably you know bought bought you know built up their exposure a fair amount especially from the fall as through day on August 13th and it wouldn't have taken much over the next week or two uh you don't necessarily need to do be really aggressive right here again you can be judicious you can take there there have been buying opportunities during this pause right uh you know so you certainly could have been adding things you but I think the real thing is to be waiting to see not wait looking and really preparing to see which way it go we we start moving higher there's going to be a lot of things very quickly so you want to have all those things ready all your watch list really ready to go and you also have to have your exit strategy and I think one reason Beyond just having your exit strategy is that it's probably a good idea because it's easy to be think bullish you can think if this happens this happens all these things are going to be bullish but just having that wait a second what if this goes lower that just by allows to keep your emotions even if just you just mixed your positive and bearish and bullish emotions to try to keep an even Keel uh will also let you know like wait a second this could all these things that are starting to look good could look pretty bad uh with just a day or two so uh a really important week we have a long weekend so don't don't waste it spending time with your family you really got a lot of work to do uh you know with with with with watch list and game plans up and down yes well I there's time for both there's time for both and that's a good point Ed you know how to juggle it all all right um and that's a good reminder we're not going to have a show on Monday because the Market's going to be closed so no IBD live no Stock Market Today video we will miss you all but I know there will be at least one article from our own Ed Carson uh out over the weekend in Monday so keep an eye out for that but yeah we have the levels on both the upside and downside that's scenario analysis if this then not just for the sunnier side of things but also for the for the not so great side of things too you got to be ready either which way and so for the S&P 500 we'll keep an eye on uh more progress next week because with this nice finish like like you said it would be really nice to see a full-fledged breakout here okay we also want to take a look at the Dow give us your perspective Ed on the Dow because lots of headlines out there uh like to talk about the Dow and so what's the headline here I mean the Dows at record highs it's pretty pretty pretty good here you look at the trend the relative strength line really hasn't out you know has lagged generally lagged and lagged and lagged it's it's improved a little bit that for brief stretch when the market was struggling the Dow outperformed but it just didn't fall as much and so while it hasn't really outperformed the S&P in the last few weeks it hadn't it was closer to a high and so it's moved up but it's not really like leading it's just that it's but it's it's not lagging either so that's that's what we're going on here so nice action but uh we'll see if it can continue to to Really March higher yeah well let's get your take on the Russell 2000 and what we're seeing with small cat getting back above that 2200 level yeah like the other things we have a handle here it's not going to you're never going to see not say never but it tight action is tough difficult for the small cap index uh but this is about as tight as you get uh with a nice little handle here so again if you see the S&P and the NASDAQ making progress this will probably move higher uh big swings up and down the relative strength line it' be nice to see small caps have a real committed move we looked like we were going to have it in July here we go finally we're going to get it uh I don't know if we will but uh a lot of small caps could should should be on your radar as well let's also take a look at zero TX this is the tenure treasury yield and I'm going to go to the weekly time frame so bouncing a little bit this week but we've been coming off a lot Ed yeah I'm really still on a pretty sharp downtrend over the in you know in August for the last few months really since you know late 2023 uh and so you know the FED is we're we're a few weeks away from the FED starting to cut rates the yield curve is close to you know un you know to stop being inverted so this has been a real positive you know trend for for the um for the stock market and now let's take a look at some breth measures here's RSP this is the equated S&P 500 ETF and we are at highs here yeah it's a lot like the Dow I mean so we're seeing because it didn't fall as much and the RS line really improved when the market started you know late in that stage there and held up very well in early August so didn't have as much to go but yeah here we go I mean a lot of things here are working I mean that's a lot of non-tech a lot of financials look like this and insurers you're seeing things some of them you know you know they're they're have already broken out uh sometime from these sort of you know little bases you know they're not they weren't quite consolidation sort of fell down came right back up so we're seeing a lot of that seeing Industrials a lot of things that didn't fall fall off that much and are are still going strong here so uh a lot of lot of non-tech performance not necessarily a lot of the problem is there's not a lot of them aren't necess in great positions because they've done this not so that's sometimes we don't talk about them as much on these on these videos because they sort of uh quickly came up and didn't have this nice nice ideal setups let's let's put it that way yes well said let's also take a look at qqw this is the equated NASDAQ 100 ETF seeing a a cup with handle here uh up 1.2% on the day basically in line with what we're seeing with QQQ Ed yeah and it it didn't you know it it got it held above the 50-day line in part because it didn't have Nvidia which was a big loser this week uh so but it you know generally it has underperformed I mean generally it's been a mega cap thing it would be interesting to see if qqw could actually outperform the NASDAQ because there's an argument that maybe some of these Mega caps are are a little tired or just can't continue to to outperform the way they have for so long I we keep talking about then they keep out you know they take a break and then they kind keep on outperforming but uh it'd be nice to see other areas other Tech areas Take the Lead as well okay let's take a look at so you mentioned Nvidia which I do still own at the moment but uh let's go to SMH which represents the chips a cup with handle but the positioning of this handle area not ideal yeah all below the 50-day line essentially it's one thing to be a little bit like the NASDAQ where you dip down below H you know it's a little shake out but this one it seems like when it breaks out it's got It's got a real resistance here and uh so um and you know it's definitely lagged it hasn't bounced back relative strengthwise much at all in the last few weeks so uh you know if if Nvidia doesn't come back these AI names it's it's going to be hard for this one to really make a lot of progress yeah okay and then here's igb the software ETF forming a cup with handle as well but this one above that 50-day line so looking a little bit better looking a lot better and there's definitely a lot of names here that you know we're seeing a number of software names you know around byy points you know or or or actually breaking out so definitely looking better had a real rough stretch so that's part of it RS line didn't falter too much in August relatively and hasn't made a lot of progress back but again unlike SMH wasn't down as much right exactly okay and you know you talked about XLF you talked about xli anything else in terms of the the sector action we should be thinking about uh you know I probably should think about a bunch of them but uh let's take a look at pave for just a moment I'm just wondering about that's gonna be yeah that one's okay that one's coming back a little bit there's probably might be some setups in there and xrt but but retail is such a grab bag of things out there right now so that would be yeah so that one that one's mixed back there's some Discounters in certain Footwear areas but it's definitely more specialized yeah yeah all right great stuff there thank you Ed for that color let's take a look at broadcom avgo group here to Nvidia and we have earnings from this chip giant next week yeah and this one has a handle uh you can see the high from a couple weeks ago when it was sort of triying to break out of sort of a pause uh you know it's back about the 50-day line so that's nice uh uh you know this one is a chip and software giant so it'll be very you know be important to see how this one does uh brought this up because it's probably the most important earnings report out there and you look on a weekly trading relatively tightly I mean you know didn't it's not a three- weeks Titan there but uh came up a lot so if you look in perspective a 2% drop after that rebound makes a lot of sense I mean honestly a 2% drop ahead of earnings when Nvidia has a big selloff right pretty pretty impressive all in all uh so we'll have to see how that report goes because we've had you know uh you know some of these you know some of the tech names out there have had some really big gains and some really big losses but you could probably use that as a handle or even a trend line kind of situation if that moves out but uh I will note that there hasn't been much volume in the handle which is fine there wasn't much volume on the rebound and that's something to watch out it's like you'd like there's a I mean it's nice that it had formed that because that was one reason it was really a little little more skeptical in that initial breakout so at least just paused here because the runup came on light volume which was just a little suspect I know volume can be a little dirty as we say but it's still nice to see more real evidence that institutions were taking part so that's that's one flaw among on on this chart do you have a a sunet of how this might have any sort of ripple effect across the sector I mean think he'll you know I think you can look at in like Nvidia is like people took a negative view of it but they did beat views they raised guidance if you start seeing more signals I could see people tipping back on that front uh there is one other name there's probably some other names out there but anet is one that uses a lot of broadcom products so that one is setting up I mean 35868 is is a buy point there so that one is potentially one that could move out on broadcom but uh yeah that's those are just a couple of areas okay let's take a look at Fixx this is Comfort Systems the group here building AC and heating products ranked 39 out of the 197 groups that we track so pretty high there we've seen a steadily climbing relative strength line over the last couple of weeks said and this week the stock up about 4.4% yeah it had a relatively tight base except for that you know August 5th that you know just put that one day uh but it came up here and so to you know and uh it was trying to get above the uh the buy point on a daily chart there was also a short handle that you could have used it didn't quite close even over that on Thursday but you could have used that as an early entry but either way the handle or this it it got above there uh the fundamentals are nice here two strong you know strong growth and two quarters of acceleration and not just modest acceleration 94 and 40 are pretty good numbers for earnings and Rue this is an AI adjacent Play Because looking for cooling products so that's one reason why this group is in it's sort of a weird situation where defensive names have this super high octane uh underlying Trend and so it's Consolidated for a few months here maybe it's ready to go a number of these names seem to be doing well but again this is also like AI you know kind of situation so uh you can't think of this necessarily as a non-tech it's I'm not sure what to do with these names how I should treat them in that space because uh right it's definitely involved in a way that it wasn't until say this year exactly yeah sort of that AI picks and shovels idea yeah all right thanks for that Ed let's also go to NE this is next era energy in the utility space yeah another AI type of Jason play we haven't really seen the earnings pick up but we're people expect that there's going to be this big ramp up in pricing so haven't seen that yet with this one we've seen it with some other utilities but this is still a defensive play uh you know it's been trading right around here around the buy point for several weeks it is really interesting because again because it's because that AI play you would normally think in a power Trend okay let's forget about those defensive names uh it does help that lower interest rate trend is positive for defensive plays as well so we've seen reach do well and the AI kind of name is out there as well but this is just one again the fundamentals aren't strong like the way comfort systems are if you let's take look at the weekly chart sure uh I want to um it has a decent yield uh and you know just wanted to take a look that the updown volume is really strong so even though the volume has been really light the last few weeks you're seeing some strength there so it's the ad rating is a c that's probably related to some of the selling you know near the beginning of the base but the up down Rao up down volume ratio is really strong uh so you know the relative strength yeah is improved it didn't really give up much lately you know that was definitely a positive is that while you know because it's defensive you didn't see much selling at all you know in that early there was no Dr Plunge in that early August maybe it came off the highs but it's right there and you can almost treat this whole consolidation as a handle to a mammoth consolidation as well right uh so it's uh shown some shown some nice action here definitely definitely one people should be paying attention to yeah great insights there Ed all right anything else in terms of what what investors should be doing to prepare for the week ahead Ed well also go over your portfolio we talked about watch and but also go over your portfolio there things that are lagging are there things that you're thinking well maybe I'd like to add on to those things you know grade your stocks and think about that because that's another way you don't have to just keep adding you know you might decide you know what I'm gonna I'm gonna you know this one's just done okay I think I'm G to sell it and make you know make room for other stocks that's just something else you can do you just do that pruning so uh you know again it's you know just like spring cleaning is not not a bad thing we've had a little pause here and we might have some buying opportunities so just do that as well along with all the other research you're doing great well thank you Ed and thanks everyone for tuning in just a reminder no Market on Monday for the Labor Day holiday so we hope everyone enjoys the the time off or at least the time off from the markets but hey gives you time to do that homework as Ed mentioned keeping that watch list freshh and reviewing your portfolio coming up with your game plan for the week if a bullish scenario unfolds or if a downside scenario unfolds so we'll have to see what we get coming up next week so once again have a great weekend everyone and we'll see you on Tuesday starting with IBD live investors.com IBD live for all the details there starting 10 minutes before the opening bell so we'll see you there and then we'll also see you back here on Tuesday after the close