Apple stock fell in line with the market but was poised to lose less than 1 point for the week. The major U.S. equity indexes showed weak action amid growing anxiety over Turkey and its increasingly volatile financial situation.
Apple (AAPL), down 0.8% to 207.23, saw quiet volume and holds a commanding 22.3% gain since Jan. 1.
Clearly, the fear among global financial institutions and major governments with strong economic ties to Turkey translated to big losses for certain stock markets. Germany’s DAX 100 dropped 2%; at 12,424, the benchmark is now down 3.8% year to date. For U.S. stocks, IBD’s current outlook remains at “confirmed uptrend.”
The iShares MSCI Turkey (TUR) exchange-traded fund collapsed as much as 22% to a session low of 19.65 in easily the heaviest turnover in more than two years. Shares found support near the 20 level; yet the ETF has now plunged more than 51% since Jan. 1.
In turn, the Nasdaq composite dropped 0.7% after being down as much as 1% earlier in the session. But at 7823, the tech-centered index still harbors a 13% year-to-date advance. The Nasdaq rallied 28.2% in 2017.
At around 3:45 p.m. ET, the S&P 500 lifted a bit off session lows, yet still fell nearly 0.7%. The Dow Jones industrial average sank 0.8%, with Boeing (BA) leading as many as 12 of the blue chip index’s 30 components with declines of 1 point or more. Boeing and money center bank Goldman Sachs (GS) both dropped at least 4 points.
Goldman and other major Wall Street banks fell amid concerns about exposure to Turkey’s sovereign debt. Meanwhile, demand for U.S. Treasury bonds on the long end remained fierce. The yield on the benchmark 10-year note slid 6 basis points to 2.87%. On Aug. 1, the yield was 3.00%.
Interest paid on Treasury bonds is fixed and set on a regular schedule. So when bond prices rise, the yield on those bonds falls.
Boeing Stock Action
Boeing, which raised its full-year revenue guidance after reporting Q2 results on July 25, has traded in a range of 320 to 375 for more than three months.
For long-term holders, Boeing is not delivering any sell signal. After all, the gains from an early-stage breakout from a long saucer with handle base at 139.55 in late October 2016 still exceed 140%. As seen on a MarketSmith weekly chart, the aerospace giant is also holding above its long-term 40-week moving average.
Instead, Boeing, which had a tremendous 2017, is now forming a new base. Watch to see if the aerospace giant can lift back above the key 50-day moving average, drawn as a red line in all IBD daily charts.
Apple, Still A Market Leader
The iPhone giant is being stingy with the 8.9% gains achieved in the week ended Aug. 3. At 207.83, the megacap tech remains outside the 5% buy zone following a sound breakout past 194.30 in a seven-week flat base.
Apple Stock Checkup
According to IBD Stock Checkup, Apple also shows these positive technical traits:
One, the RS line has bolted into new high ground. A rising relative strength line means that a stock is sharply beating the S&P 500.
Two, the Accumulation/Distribution Rating is positive at B on a scale of A to E.
Three, Apple’s up/down volume ratio has risen to 1.2, also positive. Please read this Investor’s Corner on how to understand and use the up/down volume ratio.
The Stock Checkup also highlights a company’s fundamental prowess. Apple scores a passing grade, signified by a green dot, in these measures: EPS change in the latest quarter (up 40%); number of quarters of EPS growth acceleration (2); estimated change in EPS for the current quarter (up 33%); estimate revision (upward); and size of earnings surprise in the latest quarter (beat by 7%).
Time To Sell These 6 Names?
Meanwhile, a Goldman Sachs downgrade of Intel (INTC) helped depress shares in the semiconductor space.
The Dow Jones industrial average component, down more than 2%, is struggling to cling to the 200-day moving average, yet also stands just 15% below its 57.60 peak. Intel is clearly in base-building mode.
Yet a severe undercut of the 50-day line on June 18, and failure to rebound quickly, gave new Intel shareholders reason to sell and lock in gains.
Swiss industry peer STMicroelectronics (STM) showed lack of support as shares fell more than 5% and plummeted further below both the 50-day and 200-day moving averages. When a stock, following a big price run, drops below either of these key support levels and fails to rebound, it’s a good time to nail down at least some gains. The stock first crashed below the long-term 200-day line in heavy volume on June 28.
STMicro triggered another key sell signal on June 25. On that session, the chipmaker fell 8% below a 24.62 buy point in a cup with handle, thus triggering the golden rule of investing.
Keeping losses small and taking profits in many top market leaders at 20% to 25% from a primary breakout point is a tried and true formula for long-term success.
More Growth Stocks Slammed
Autohome (ATHM), the China-based digital marketer for the car industry, slumped nearly 6% in heavy turnover to undercut its 200-day line for the second time in three sessions. Ferrari (RACE) (down 2.6%) and SolarEdge Technologies (SEDG) (off 1.3%) are struggling to hold the 200-day moving average as well. A new base may be forming for both high-growth companies.
Weight Watchers (WTW) is not showing any willingness to rebound after plunging nearly 15% on Tuesday following Q2 results. A big drop below the 50-day moving average and round trip of big gains following a breakout at 77.29 served as twin sell signals.
Weight Watchers posted strong Q2 results as earnings rose 53% to $1.01 a share on a 20% revenue increase to $409.7 million. That marked the biggest total sales in any given quarter since Q1 of 2014.
Software Leader Up Again
On the upside, Altair Engineering (ALTR) rallied more than 3% and is trying to clear a 37.87 correct buy point in a seven-week flat base.
The expert in engineering software posted a 37% drop in earnings to 5 cents a share, but that beat the Wall Street estimate by a penny. Plus, Altair faced a difficult comparison as earnings doubled to 8 cents a share in the year-ago quarter. Revenue jumped 17% to $95.6 million, the highest in any quarter ever.
Altair debuted on the Nasdaq at 13 a share on Nov. 1. Read more about the Troy, Mich.-based company in this IBD Stock Of The Day feature.
