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thank you thank you good afternoon everyone and welcome to stock market today for Tuesday June 6th it's Ali Corbin Ed Carson here with a breakdown of the action in today's session where we saw stocks Advance small caps to outpaced the broad market today and Ed you know for so long in the bear Market we were talking about how the indexes were masking underlying weakness and now today the indexes were masking underlying strength so that seems like a good sign yeah it is especially some of those indexes look a little a little extended so Tim taking a break would be nice three stocks sort of flash buy signals today we're Shopify transmedics and Taiwan semiconductor all right we'll take a look at those stocks but first let's analyze the major indexes here's a look at the NASDAQ some really tight action and we did see a gain of four tenths of a percent today for the S P 500 a gain of about a quarter of a percent the Dow was slightly positive and as mentioned the Russell 2000 really kicking things up a notch up 2.7 percent today so with the weekly gains that we've seen over the last couple of weeks especially for the NASDAQ getting stronger and stronger it seems like some sort of pause or digestion of those gains is expected and as of now just seeing the tight action here near these recent highs seems pretty bullish yeah it's acting well I mean ideally we see the NASDAQ and some of these big hot names sort of pause and some did some did not and and then the other indexes come up a little more broad than we're sort of seeing that so it is it is pretty positive uh we don't want to see the NASDAQ get too much more extended over the 50-day line uh it didn't change too much today so it wouldn't be bad to see this go sideways it's right at 52 weeks 30 to 13 month high so nice uh yeah this is acting well and taking a look at the S P 500 as well uh some pretty tight action here we're seeing this uh 4325 level getting closer and closer so we're keeping an eye on that on the upside as well but something to mention here speaking of improving breadth is a look at the gain that we sell for RSP today this is the equal weighted S P 500 ETF so while the s p was up about two tenths of a percent or so RSP continuing to improve here at up seven tenths of a percent yeah it took the 50-day and 200-day lines late last week really needed to do that now I hit a one month High you know sort of breaking some trend lines a little bit uh definitely positive okay and we also want to take a look at the Dow here's the b-i-a-e-t-f a strong gain on Friday and not giving up too much of that gain yeah it tested the 50-day line today ended up slightly positive so uh you know even even the weaker areas of the market are are are holding up or advancing so that's that's good to see and here's a look at iwm the Russell 2000 really turning it on today Ed after a strong gain on Friday and we noted on Monday's show with Justin while even though we did see a decline that outpaced uh the broad Market I believe uh some you know would need analyze the market every day sometimes it's uh it's hard to keep all the numbers straight but uh with this pullback that we saw on Monday it was right at the 200-day line and then also if you looked at the true range from the Friday Gap up still in the upper half of that range so not all too concerning there and Blasting higher here today so seeing small caps starting to participate in a more pronounced way yeah three month High basically so I mean some of this was Banks but there was more than that there was just a lot of breadth uh just I believe on the noisy advancers beat decliners by more than three to one I think it was five to two on the NASDAQ or something close to that so yeah nice to see this purchase participation because you know just a couple weeks ago it seemed like there was like 15 stocks that were rallying and now it feels like I mean some of these names you know some of these names still have ways to go before a lot of stocks in here might be viable per se but really good to see this and mid caps let's take a look at mdy also powering higher here today up two percent so another sign of increased participation in the market Ed yeah absolutely okay and let's check in on two sectors that I've been leading this year and that is software and chips how did they fare well here's a look at igv up another day yet again so we've got one two three four five six seven eight up days in a row it is now almost 10 percent above the 50-day line I mean with AI in Focus right now Ed it's not a surprise to see this sector doing well but it seems like it's more than that it's more than just the promise of AI fueling this group I mean it's a big part of it it's a big part of it like that's the whole picture there's other names in there that don't seem to be as AI workplace management kind of software uh and we're seeing other business software do well so but yeah this has definitely been strong it actually you know again this would not be the worst of it paused here a little bit just because it gets getting extended running away and again this isn't like pushing it like again even though these are advancing they're not leading the small caps leading the mid caps leading like you know whereas you know so this is more of what you put right right at this moment and uh we did keep track of the pullback and the bounce here and the potential opportunities with this uh mid-month last month also a look at SMH here pausing not even down to the 10 day line just yet and not giving up too much ground after that explosive move we saw yeah I mean you want to maybe go sideways pull back a little bit and this looks great this looks this looks great yeah we'll take it okay well speaking of software stocks let's take a look at Shopify a strong move in today's session up more than six percent strong volume behind the move as well we saw a blast out of this base on earnings in early May and orderly pull back to a key level the 21 Day line and held that Gap up day low and now clearing a trend line Ed yeah you could have possibly bought it yesterday could have you know definitely were signals this morning as I cleared the trend line today uh the only thing now is that it's getting a little extended it's starting to feel a little bit like versus the 21 Day line probably about nine percent above the 21 Day line so that's one thing but really strong move really nice volume here uh it'll it's on track to have a base but not for another week and a half because it's fractionally too deep to be a flat base but this is really constructive action you know coming out of that big gap up right and this feels Ed like a bull market buy point I mean uh it's it's been a little while since we've felt uh really comfortable buying a pullback to the 21 Day line after a big breakout as an initial buy uh you know a lot of times it's reserved for an add-on entry which Traders could be doing that too maybe they did buy the earnings Gap and this test of the 21 Day line and the bounce was an opportunity to add to their positions but it seems like if we're talking more and more about buy points off of 21 day line bounces that uh bodes well potentially for the kind of environment we're in for growth investors yeah I mean as the market has improved a little bit we seem to be trending higher maybe a little bit more breadth uh you know you can start have more of a a Bowman bull market mentality because it is uh it's not like 2020 I don't know if we'll see 2020 for a long time but uh it's definitely as the market improves you you can start being a little bit more aggressive and so all of those cell rules that we're not their own it is n't just kind of setup so hopefully the momentum here can continue and why is this our first stock we're focusing on today well it was added to a leaderboard swing Trader and was our stock of the day so check out that article by IBS Mike Larkin next on our list tndx this is in the medical products Group which is ranked number 16 out of 197 retaking the 50-day line in a big way today in volume with a gain of over six percent here too yeah and so I think this is a pretty good entry point strong volume breaking above level yeah there was a lot of trading in this area had sort of a tried to break out a couple months ago that didn't work out but it's setting up right right next to it and this is where we we talk about trying to go for early entries and what you know this is definitely a situation because it's pretty close to the 50-day line if it runs up to the to the buy point you could easily imagine a pullback it doesn't necessarily mean to we've said we've seen stocks just keep running but the risks are much higher and uh so this seems like a good place to be entering the stock at the really really strong volume it's not profitable but the growth is strong and it's supposed to be profitable next year so it seems to be the losses seem to be getting smaller uh so that that is a reason to also the fundamentals are starting to look a little better some really explosive Top Lane growth here and and I think this weekly chart definitely adds to the picture here with this stock bottoming in February of 2022 uh you know that's when a lot of stocks were struggling so to see it having such a nice move since then I guess the only red flag at this stage is is this later in the stocks move uh is it a is it a later stage base later stage bases of course can work but the further you are into a stocks move the higher chances uh that you could be getting towards the top that that is a potential risk uh we have seen it seems like stocks have been able to have later later stage bases at times you know they can sometimes move on to stage five or even stage six at times so that's something to note but it isn't something that it's like it's more like a yellow alert yellow flag not a red flag yes agreed and take a look at TSN this is this is i1 semiconductor of course chip stocks we want to be casting a wide net looking at all the chip stocks on the move because that sector has just been showing power as of late and we did get a breakout on 525 a move of 12 in some pretty big volume and it looks like the pullback over the last two weeks or so has been in orderly fashion Ed yeah and this is what you know we've seen with some of the stocks they they sort of broke out and some of the big moves this one moved probably on Nvidia because Nvidia is a big customer all the chips were flying at that moment so it came in and now it's paused a little bit it was a nice test of the 21 Day line didn't look so good in the morning but it it came back and uh pretty nicely now it's moving back above the buy point in in above average volume here so I think this is you know you can treat that it's just it was sort of a pause now it doesn't look quite as extended as it did when it first popped out this is a leader this makes trips for just about everybody it seems like that doesn't make their own ships Nvidia Apple a number of the big names Qualcomm so uh it's you know its health is if it's doing well it's a very good sign for the chip industry and probably for the the market rally as a whole and for Traders who may have concerns about the recent weakening fundamentals of course you know that's a factor to take into account when you are doing your overall assessment of the technicals and the fundamentals when you're looking to play stocks on your watch list or looking to buy but we could counter that with looking at the estimates right for 2024 we are seeing a return to some nice growth yeah and with chips and especially chip gear but chips as well you you know the these people see the cyclical turns and it seems like they really were pricing it in early this time like people betting way in advance of the upturn and that's something you have to note like if the if the if people see the bottom and it turns around uh the market will price that in ahead of time so uh you know with chips and in particular you have to have to be looking ahead if the Outlook looks pretty good down the road then that can make you feel encouraged even if the very near term or the current fundamentals aren't so great exactly great added context there Ed thank you so much for that all right well that is it for today everyone thanks so much for tuning in we hope you join us tomorrow morning on IBD live we're going to be joined by hedge fund manager and a long time growth stock Trader Jim ropel of ropal Capital Management he's going to make his return to this show when he was on last fall I believe it was or a number of months ago a previous appearance he was keying off of that uh 13 100 area for the NASDAQ saying potentially that could unleash a big rally we'll have to get his updated thoughts on that stocks he's watching and so much more so make sure you tune in investors.com IUD life for that and if you want more details on upcoming guests for all of our different shows make sure you bookmark investors.com events to stay up to date on all the latest thanks everyone we'll see back here tomorrow
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