Key indexes slumped in late afternoon trading Friday as investor anxiety appeared to rise over whether Capitol Hill will succeed in passing a comprehensive tax code overhaul. Yet the declines were mild, and the market remains in a confirmed uptrend.
XAutoplay: On | OffThe Nasdaq slipped less than 0.1%. At 6786, the leading index is on track for a weekly gain of more than 0.5%. The S&P 500 edged 0.2% lower; the Dow Jones industrial average lost 0.4%. Volume is mildly up vs. the same time Thursday on both main exchanges.
IBD changed its market outlook back to “uptrend resumes” from “uptrend under pressure” on Aug. 22, reflecting a good time for growth investors to actively search for winning stocks.
One of those winners: Apple (AAPL), which, despite losing 0.5% on Friday, is carving out an excellent uptrend with six weeks left in the year.
Apple gained as much as 9.4% from its latest buy point, a cup with handle and a 160.97 entry, before sliding in recent days. No sell signal has triggered.
The iPhone giant is also still up more than 40% since clearing a bottoming base at 118.12 on Jan. 6-9. That base was a picture-perfect cup with handle.
Fellow big-cap tech leader Applied Materials (AMAT) cooled off after rushing as much as 9% higher and hitting a new all-time high of 60.89 following robust fiscal fourth-quarter results (EPS up 41% to 93 cents a share, revenue up 20% to $3.97 billion). However, growth slowed following numerous quarters of triple-digit gains.
Applied Materials is still sharply extended from a new buy point at 47.69 from a solid flat base.
Other tech stocks still showing strength:
Nvidia (NVDA) was down mildly for the week. The top graphics processor and chip designer for the auto, data center, gaming and cryptocurrency markets snapped a six-week win streak, but is still up sharply since clearing new buy points at 121.02 in early May and 174.66 in September.
Some specialty retailers are showing some signs of new life.
Urban Outfitters (URBN) rose for a fourth straight session, rising 4% to 27.98 in heavy turnover. The Street is forecasting a turnaround in earnings. While profit is expected to sink 24% to $1.42 a share in the current fiscal year ending in January, the trendy clothing and home goods retailer may boost profit 12% in fiscal 2019.
Back to Apple, watch to see if the stock either comes within buy range from the breakout at 160.97 or tests the 10-week moving average, ideally in light turnover. New buy areas could emerge at those levels.
Despite some negative headlines regarding its new iPhone X, the stock has shown signs of excellent demand.
First, Apple’s relative strength line has recently pushed into new high ground, meaning it’s sharply outperforming the S&P 500 in recent weeks.
Apple also maintains a solid Accumulation/Distribution Rating of B- on a scale of A to E. (Focus on those stocks with at least a C+ or better.)
Finally, as seen in a daily chart of Apple, over the past three weeks the megacap tech notched truly heavy volume in just one of seven down sessions.
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