Nasdaq Reverses Lower After Strong Start; ServiceNow, Wingstop, GE In Focus

[Music] [Music] good afternoon everyone and welcome to stock market today it's Ali corm and Ken sh here with the breakdown of the action in today's session Thursday August 29th where investors had to digest that Nvidia earnings news but kind of a roller coaster day can ending up in a mixed session yeah it was pretty amazing I mean even when Nvidia was down two or 3% uh 4% for a good portion of the session NASDAQ was still holding a very strong gain and breath was uh positive but yeah we uh we gave back a lot of that uh a lot of that gain so uh watching service now and GE Aerospace here both stocks uh try to clear new buy points uh today came up a bit uh short service now n and GE Aerospace is GE and finally want to take a look at Wingstop uh still some restaurants uh performing well out there and Wingstop is building a new base all right well we will take a look at those stocks but first let's analyze the major indexes the NASDAQ Composite reversing lower down about two10 of a percent by sessions closed the S&P 500 ended up flat on the day also giving back a lot of the gain there the Dow finished in the green up about 61 of a percent and the Russell 2000 the leader of the day up 7/10 of a percent here but closing off highs so back to this roller coaster that we saw in the Nasdaq all even pull up the intraday chart here so we had a a strong start and as you mentioned I think a uh a lot of Wall Street Watchers are perhaps surprised that the market could have an update and potentially and a strong one at that even with Nvidia a disappointing reaction to the earnings there down 6.4% by the end of the day but seemed like a a correlation right when Nvidia started uh selling off more and hitting lows for the day it seems like investors uh yeah you know had a had a pain threshold for NVIDIA and uh a lot of selling in the latter portion of the set session yeah yeah I mean we were up uh 1 point 1.3% I think on uh on an intraday BAS basis so to see it turn turn lower not a not a good day for stock market Bulls that's for sure we had a fairly mild distribution day on the NASDAQ uh yesterday I mentioned that this morning on IBD live it was uh you know fairly orderly decline uh yesterday NASDAQ closed off its lows held some support uh you know today a little bit a little bit different volume picked up the pace again uh higher than what we saw on on Wednesday and a close near lows so now we're just questioning if if support is going to hold here uh or if there's going to be uh you know more more selling that results in a you know maybe a sharper pullback here so um you know we've been talking all along about the the number of stocks out there that are acting pretty well and even today with the NASDAQ reversal didn't see a a lot of terrible damage uh done to the market so I think it's you know still a little early to to get worried about this uh uptrend there's uh the market surge growth 250 had a lot of stocks today up uh you know 1 2% uh so underneath the surface uh you know breath uh was was was pretty good on both exchanges despite uh you know the indexes uh gave back gains but um so we'll see not a not a great day for the Bulls uh looks like a distribution day second straight for the NASDAQ and uh NYC volumes going to be a really close call but you know S&P 500 was basically flat so even if volume were higher on the NYC I don't think we we would count it as distribution right so the S&P 500 still in a stronger position here than the NASDAQ Composite which is uh below its 50-day right at the 21 day so I know that's a level that especially active growth investors are going to be keeping a close eye on for the NASDAQ in addition to Wednesday's low for the S&P 500 we are above both the 21-day and the 50-day line still cons consolidating in a sideways fashion here Ken after a big couple of weeks bouncing back from the lows here so we're we're still hanging in there I think a bit better for the S&P yeah no doubt I mean it was a pretty sharp uh decline when the NASDAQ uh you know went above 5600 sort of that left side high and then it pulled back sharply broke through the 50-day moving average there was quite a bit of volume uh behind that uh Decline and now the S&P has kind of resolved that uh that uh that heavy volume selling with a lot of low volume gains now it's been moving sideways again we had a very mild distribution day for the S&P 500 on Wednesday volume was higher than the prior session but still pretty pretty light so yeah I would agree that the S&P 500 looks a little bit better here kind of holding near uh short-term support levels but you have the you know the NASDAQ uh you know battling battling at that 50-day line so that that's going to have to resolve itself okay uh let's talk about small caps Ken the Russell well you know the top performing S&P 500 sector today was XLF uh the financials uh and energy stocks were the top performers so you saw the you know Russell 2000 um you know was really holding a a pretty good gain throughout the day but it got kind of pulled down late but a lot of lot of outperformance from Financial stocks I think helped lift the Russell 2000 over that 2200 level got got pulled back uh you know you know by the broad Market but you can see XLF here another up session pretty good pretty good volume today too so underneath the surface uh there's still you know plenty to talk about there's still uh you know maybe a little rotation out of uh some of these large cap uh you know technology stocks but even that you know there's still plenty that are holding up well but uh you know retail Financial stocks home builders uh still you know acting pretty well okay let's talk about the Dow Ken and your thoughts on the action today here for zero djia in yeah in in pre-market uh trading it was the DOW and uh small caps that were leading uh leading the way uh before the open today big reason the Dow was outperforming was uh because of Salesforce which reported earnings last night uh along with uh Nvidia we can see that uh s Salesforce didn't have a very good day at 200 100 day moving average has been a a ceiling for for several weeks y just right right there and uh sure enough it made a nice strong uh pre-market move it was up nicely and after hours uh yesterday but uh boy big sellers in the stock today and uh a pretty nasty reever reversal getting resistance to that 200 day line which is pretty typical when stocks are on uh downtrends these uh support levels that were one time support turn into resistance and that's what's happening with uh with Salesforce so it looked like it was going to be a good day for the for the Dow and it probably did outperform a little bit by the close but tough day for Salesforce yep and uh once again there is a look at the Dow here it looks like even though closing off high still another new closing all time yeah new closing High yeah so not not too bad a performance considering that sell off for uh for Salesforce but uh yeah da is still in a nice leadership position here okay so before we talk about the individual stocks today Ken uh something that we need to be looking forward to tomorrow we have more economic data that is due to come out of course it seems all but certain that the FED is going to cut rates in midep but what are your thoughts on how tomorrow's economic data might uh create a little volatility or at least just generate some buzz on Wall Street of what we might expect in a couple weeks from the FED yeah well it's uh it's the final trading day of August uh tomorrow on on Friday too so there could be some could be some volatility uh tomorrow but uh you know Ed and I were talking on IBD live uh this morning and Ed mentioned listen there was a the the pce component of the GDP data that came out uh today uh second quarter GDP was revised uh slightly better than uh expected uh so we got a little hint of what the pce could could be like tomorrow in the personal income and spending report last I checked year-over-year core prices are expected to increase a little bit from June so not going in the right direction but up uh 2.8% versus uh 2.7% in in June so I'm not sure the inflation data at this point is as much a market concern as it was especially in light of uh the Jackson Hole speech where pretty much just said we're we'll we'll start uh cutting in uh in September still a chance we could get 50 basis points at September but Market is still feeling pretty confident that there's going to be 100 basis points of cuts between the September and uh and December meeting so we'll have to see um if there's a big upward surprise to pce tomorrow that that could spook the market but that numberers generally been coming in uh pretty much as expected so we'll see if it's a big event or not but um you know again I think what's more important is that It's the final trading day of August and sometimes we can get some uh some volatile uh trading near the end of the day on the final trading day of the month right and especially with the NASDAQ kind of on the edge here you know for position traders who like waiting for a Friday close you know we'll we'll have to see how this test resolves itself uh what kind of day we're going to have tomorrow okay let's take a look at service now Ken your thoughts on the action up 2.1% on the day of course with the Nan DQ coming in this uh got pulled down a little bit with it off of intraday highs for the day but uh definitely a notable chart right now yeah I mean this is uh this is how investing can be frustrating because we've had service now in the the leaderboard model portfolio for a little while now and just thought it was a a fantastic opportunity to increase the position uh we waited uh let the market kind of resolve itself but this thing really just powered through some some recent highs volume was Heavy NASDAQ was up more than 1% it just seemed like a good opportunity to increase the position because if we're going to add to a position on leaderboard we're going to do it with stocks that are going in the right direction we never we never average down or or buy stocks when they're when they're going down to lower our average cost basis so you know the uh the ad that we made this morning not looking so good by by the close here but uh you know we talked about some some of these magnificent seven stocks uh look very rough around the uh edges you know you might look at a name like Google g o l talking about money sort of coming out of uh you know large cap technology stocks uh this stock is you know below the 50-day and really it just looks like it's ready to consolidate um for a little while but service now you know still holding up near highs here they did have a really really good earnings report uh the last time they uh announced you can see that's when it gapped out of that consolidation so looked like it was going to try to move again today but really A a really strong fundamentals here Bill McDermot is running a a real tight ship at service now and he was talking a lot about AI when they reported earnings a few weeks uh back and obviously it was a positive response by the market so this one you know still has a chance to work here um but you know got pulled down late with the broad Market yeah okay well we'll see how it handles not only that 815 level from that prior breakout area as you mentioned but also that 21-day line those those two levels coinciding so we'll we'll be on watch there okay let's go to Wing Stop Ken forming a base your thoughts yeah made a nice move above its 50-day moving average cross the uh the 400 now we've got a market that's looking you know a little bit a little bit iffy so uh Wing Stop uh fell in higher volume yesterday not a big rush of selling but um it did fall in higher volume yesterday and you know gave back some early gains uh today so uh still a good base here it just the question is is support going to hold at the uh at the 50-day moving average so uh people that want to buy Bing uh Wing Stop uh probably going to want to see it get above that uh 400 uh level start rounding out the the right side of this shallow Baye so at this point we look at Wing Stop as as one of the top restaurant stocks out there and there's a lot of strong performers in this uh in this group but uh we just like how how Wing Stop was a big winner after that uh breakout late uh last year was one of the first stocks out of the gate when we got that you know the follow through days in early November and now it's just setting up in a in a good base again amid uh really explosive growth and this company I'm not going to say they're early in the in their expansion but uh they are definitely not in the late Innings they still are aiming for you know aggressive expansion they've managed that expansion well uh keeping their costs low and uh it's a good base setting up here so we're just uh we're watching it uh for for leaderboard and uh want to get an entry but just need to wait uh wait for the stock to consolidate a little more yeah okay and then last but not least let's go to GE up 1% in today's session it's been trading super tight I mean this is a stock that that does trade in an orderly fashion it's had a number of months of outperformance here Ken took a little bit of a break break to build a base how is it looking now it's looking uh looking pretty good it just uh reminds me a little bit of uh of uh of service now uh you know a stock that uh you know tried to break out pulled back and it it tried to make another move today didn't close at its at its low uh today so this one still has a shot really looking at that 17720 high as a uh as a legitimate alternate entry here so uh we're keeping an eye on on this one as well obviously GE has really slimmed down um in fact gev which is the energy alternate Alternative Energy spinoff uh from from GE had a really nice uh breakout today so and here's one that uh the gain held closed in the middle of of its range so there's a couple of GE stocks here that are looking uh looking pretty good now you know Industrials are performing well here we talked about the Dow uh being up up near high so it probably makes sense to have some uh some industrial names in the port folio uh at this point with the Dow you know performing as well as it is so I think uh ge and gev are are are good stocks to watch here great well thank you so much for that Ken and thanks to everyone for tuning in that is it from us for today but we'll be back with more tomorrow morning on IBD live and we hope you all join us investors.com live for all the details on that and we'll see you there also we'll see you right back here tomorrow after the close for