Shares swung into a mixed open Thursday, filled with disappointing weekly data on jobless claims about the heels of two sessions of quiet constructive trading. Technical stocks took advantage of the early advantage, with Square and PayPal handing out early leads. At the Dow Jones today, Apple rose with the aim of extending its rally to a sixth day despite reports of chip shortage issues.
The Nasdaq Composite jumped 0.9%, while the S&P 500 waved up 0.2% to take a new high in opening trading. Dow industrial threw 85 points, fell 0.2%, which Chevron (CVX) led to the decline in the stock market today.
Free market (MELI) and Autodesk (ADSK) led Nasdaq’s early advancement. Autodesk jumped more than 3% and also led the S&P 500. Shares are rising towards a buy point of 316.41 in a double-bottom base. Space leader Textron (TXT) jumped 2.5% and overtook a buy point after an upgrade to purchase from Goldman Sachs. The breakout over a buy point of 57.14 in a three week tight pattern is in the buy range through 60.
Square (SQ) was an early leader among IBD 50 and Leaderboard stocks and rose 2.8%. The point-of-sale system maker hit back over its 10-week moving average this week, rising 6.8% to Wednesday. The six-day rally has placed it in a buying zone for aggressive investors as it scales up on the right side of a seven-week base pattern.
PayPal is also sitting on a six-day advance and testing resistance on the underside of its 50-day / 10-week line. Shares rose 2% in opening trading. If this move lasts through the opening bell, the PayPal stock will open above its 50-day line for the first time since March 3rd. PayPal is also on both the IBD 50 and Leaderboard lists.
Semiconductor shares ran strong in an early action, sending VanEck Vectors Semiconductor ETF (SMH) up 0.9%. The ETF closed 2% on Wednesday below a buyout point of 258.69 in an eight-week cupbase.
Microsoft, Apple rises on Dow Jones today
The Techs once again set the early pace on the Dow Jones today. Salesforce.com (CRM) led by an advance of 2%. Intel (INTC), Apple (AAPL) and Leaderboard Warehouse Microsoft (MSFT) was close.
Apple shares rose, although Nikkei Asia reported that Apple experienced production delays in its MacBooks and iPads due to the ongoing global chip shortage.
The result is a feedback of orders on some of the units into the second half of the year. The delays signal a possible worsening of the chip shortage, the Nikkei reported, and could affect smaller tech players even more strongly.
Apple traded 1.5% higher early on Thursday after surpassing the market and breaking narrowly above its 50-day moving average in a 1.3% advance on Wednesday. Apple stock has climbed in five straight sessions, rising 10% from its lowest level on March 8th.
It is technically in a buying zone for aggressive investors as the stock looks to move further up the right side of a three month base effort.
Unemployed demands, Powell debate, vital signs
The number of first-time applications for unemployment benefits rose to 744,000 in the week ending April 3, the Labor Department reported. That was over the previous week’s 728,000 final numbers, disappointing expectations for another straight drop to 680,000 claims.
Markets will also be tuned in to Federal Reserve Chairman Jerome Powell’s participation in a virtual debate on the International Monetary Fund on the global economy, starting at 12 ET.
Wednesday’s release of minutes from the Fed’s meeting on March 17 showed a stable stance. The post suggested that it would take some time before they begin removing aggressive monetary measures to support the economy, and they will communicate well in advance of any possible move – just the kind of predictability that investors are looking for.
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Trade across global markets was mixed, with European markets gaining strength in afternoon trade. Crude oil prices remained within their recent range, with the West Texas Intermediate being slightly down and staying just below $ 60 a barrel. The bonds were stable with the 10-year return unchanged at 1.65%. Bitcoin reversed early losses and gained nearly 0.2%, climbing back over $ 57,000.
Tracking Nasdaqs Cup Base
A few days of level trading have allowed the Dow and S&P 500 to soar just below record highs, while the Nasdaq adds another brick to the symmetrical consolidation that began in mid-February. The close action from the last two sessions is a positive one, according to Wednesday’s Big Picture, because it shows the market refuses to give anything back of its advance in March.
A look at the Invesco QQQ Trust (QQQ) shows that the Nasdaq Composite has shaped what IBD MarketSmith analysis identifies as an eight-week cup base. The buying point of the ETF is at 338.18. The fund closed less than 2% below this item on Wednesday. The symmetry of the base is a positive sign. In addition, the last two days can be the start of a handle formed on the pattern. In this regard, several days of flat action can be positive.
Aggressive investors can track the same base pattern formed on the leveraged ProShares UltraPro QQQ (TQQQ) chart. Invesco QQQ rose 1.1%, ProShares UltraPro QQQ rose 3.2% in Thursday’s trading in the pre-market.
Dow Jones Today: A Dozen Blue Chip Buy Points
The Dow Jones today opens freight with an unusual number of stocks in bases and near buyout points. More than a third of the 30 Dow shares are currently in buy intervals or just below buy points.
Among them, Boeing (BA) is back in a buy range above a buy point of 244.18 in a 12-week cup base. Intel is in a buy range over a 63.64 record in a cup with handles.
Microsoft stock has now risen in four of the last five sessions and did not quite close 2% above a 246.23 flat-buy point on Wednesday. The buying range extends to 258.54. Both Boeing and Microsoft are IBD Leaderboard-listed stocks.
Goldman Sachs (GS) is in its third week of tight trading as it tests its 10-week moving average. The pullback from highs in March and support at the stock’s 50-day / 10-week moving average put it at a possible buying opportunity if it returns from 10-week support.
The tight weekly close tends to indicate that institutional investors are accumulating stocks. This can potentially amplify the rebound from support.
Walt Disney (DIS) is technically in a buying range. But it is also set for a possible rebound from support and can also build a base pattern. Nike (NKE) is seeking to resume support and offers potential early access for aggressive investors in its base-building efforts.
UnitedHealth Group (UNH) is back below a buy point of 367.59 as it tests support at its 21-day exponential moving average.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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