Scalper1 News
The market faces no shortage of challenges: a buildup of distribution days, the S&P 500 settling back into negative territory for the year, and the Nasdaq diving below support at its converged 50- and 200-day moving averages. Those technical challenges are being underscored by another development: a vacuum of leadership among technology industries. Tech industry groups have entirely exited the top 20 of IBD’s 197 group rankings, with the exception of two: wireless and integrated telecom services. The wireless services group includes major mobile phone carriers Sprint ( S ) and T-Mobile U.S. ( TMUS ). The integrated group is dominated by AT&T ( T ) and Verizon ( VZ ). Investigate this tech stock that broke out of a base in heavy trade on Thursday using IBD’s Stock Checkup feature. Wireless services and networks are clearly high-tech territory. But as more consumers abandon their landlines and rely strictly on wireless services, and as more young people spend a growing share of their lives via smartphones, the wireless stocks also increasingly present the stability associated with utility stocks. In that respect, they represent a defensive hedge for funds and other large investors as indexes weaken. This could help explain why both of the telecom groups rose into the top 20 rankings as the broad market pulled back over the past four weeks. The S&P 500 has backed off 3.7% from its mid-April high. The tech-heavier Nasdaq peeled back 5.3% during the same period. Even 13 weeks ago, when defensive groups such as utilities, bond funds and tobacco crowded the leading ranks, tech groups including Internet content providers, chip equipment makers and solar energy manufacturers held in the top 20 rankings. Instead of continuing to lead the market, those three groups have since fallen to rankings of No. 85, No. 110 and No. 169, respectively. Beyond the top 20 rankings, medical systems manufacturers rank a strong No. 23. The technology-driven group counts Intuitive Surgical ( ISRG ) and Idexx Laboratories ( IDXX ) among its bulwarks. The next tech group bearing some potential growth stocks is the scientific electronic equipment group, ranked No. 41 Thursday. Danaher ( DHR ) and Agilent ( A ) are the strong suits here. The only other tech group in IBD’s top 50 rankings is the foreign telecom services industry, led by China Mobile ( CHL ), Japan’s Nippon Telephone & Telegraph ( NTT ) and London-based Vodafone Group ( VOD ). What about the big-charisma tech names? Apple ( AAPL ) is down 16% from its mid-April high. Alphabet ( GOOGL ) is down 10% and fighting for support at its 200-day line. Facebook ( FB ) is down only 3%, but has erased all gains from its April 28 breakout. A number of other stocks in the group are also keeping their heads up as the market pulls back. Look at WebMD Health ( WBMD ) and Zillow ( Z ), just to name a couple. Sell-offs among China-based plays, including Baidu ( BIDU ), YY Inc. ( YY ) and Momo ( MOMO ) have helped pressure the Internet content group to a No. 167 ranking. Amazon.com’s ( AMZN ) chart remains durable, extended above a buy point. Also in the Internet retailers group, Argentina’s MercadoLibre ( MELI ) is in buy range from a 127.87 buy point, although its fundamentals continue to lag. But sell-offs in the group — particularly among China-based Internet plays including JD.com ( JD ), 58.com ( WUBA ) and Vipshop Holding ( VIPS ) — have helped hold the group to a weak No. 104 ranking. Scalper1 News
Scalper1 News