The major market averages continued their slew of gains in 2018, as China-based leader Alibaba (BABA) jumped into new highs in the stock market today. The tech-heavy Nasdaq rose 0.2%, while the S&P 500 and Dow Jones industrial average moved up 0.4% and 0.6%, respectively.
Among the Dow Jones industrials, General Electric (GE) reversed from early gains to fall 0.3% amid the company’s better-than-expected earnings guidance.
Elsewhere in the Dow, Apple (AAPL) gave up its 176.34 flat-base entry with a 0.9% decline in early morning trade. Shares have struggled to maintain altitude amid iPhone X demand concerns and the relative strength line has declined accordingly.
IBD 50 leader Alibaba reclaimed its 191.85 cup-shaped base entry Tuesday and looked to extend its gain Wednesday with a 2.7% advance. The stock briefly topped the buy point on Jan. 9 before retreating back to its 50-day line where it found significant support.
Rival JD.com (JD) was breaking out above a 47.50 cup-with-handle entry with an over-5% advance.
Among companies reporting earnings, Texas Instruments (TXN) plunged over 5% after announcing a surprise tax charge in its Q4 earnings release. The stock is still well-extended from its most recent base — an 84.34 cup-with-handle entry — and about 9% above its 50-day line where it last found support in early December.
Selling off in the wake of the earnings release were a number of leading chip names, like Lam Research (LRCX) and Applied Materials (AMAT). Lam fell about 1%, as it trades just off a potential 219.80 cup-shaped base buy point. While the relative strength line remains off its old highs, it has been drastically improving over the stock’s recent six-day win streak.
Applied Materials fell 1.6% and is also shaping a cup-shaped base that has a 60.99 entry.
Meanwhile, defense leader General Dynamics (GD) reversed from heavy losses to advance over 3% and breakout after its Q4 revenue came in light vs. estimates. Shares formed a cup-with-handle base with a 211.85 buy point.
Inside the IBD 50, PRA Health Sciences (PRAH) declined nearly 3% after being downgraded from buy to neutral at Mizuho. Shares were still extended from an 84.48 flat-base entry.
Elsewhere, Universal Display (OLED) was on pace for a fourth consecutive down day, falling over 2% in early trade. Shares are rapidly approaching their 50-day line after a recent breakout above a 192.85 cup-base entry. Shares are about 4% below that level.
