Stock Market Steady In Afternoon Trading As Base Breakouts Surge

What started as a dreary day improved as Friday’s session progressed. Stock market indices continued to trade above intraday lows as many stocks broke from well-defined bases.


In afternoon trading, the Nasdaq composite was flat and the S&P 500 was down 0.2%. The Dow Jones Industrial Average fell 0.1%.

The Russell 2000 did better with a 0.3% gain. Volume contracted on the Nasdaq and NYSE compared to the same time on Thursday.

Among the big stocks, Tesla (TSLA) turned a loss of 3.6%. The EV maker has slashed prices for the Model 3 and Model Y in the US and Europe, following a price cut in Asia last week. The stock has bounced back from its lowest level since August 2020, until today’s decline.

Other electric-vehicle stocks also fell.

Rivian Automotive (RIVN) traded down more than 8%, making it the biggest loser on the Nasdaq 100. Lucid (LCID) also posted big index losses. The Wall Street Journal reported Thursday that several top executives have left Rivian.

The IBD 50 Stock Market Outperforms

The Innovator IBD 50 ETF (FFTY) edged up 0.7%.

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Two IBD 50 stocks broke on bases.

Timken (TKR) rose above the 76.43 buy point in a cup base and is in the buy range to 80.25. BofA Securities upgraded the industrial components maker from neutral to buy. The investment bank also raised the price target from 71 to 87.

Copa Holdings (CPA) broke above an 89.27 handle buy point on heavy volume. JPMorgan upgraded the airline stock in the IBD 50 from neutral to overweight and raised the price target from 105 to 132.

MercadoLibre (MELI) topped the alternative buy point at 1,039.49.

More Breakouts For The Stock Market

Except for the IBD 50, breakouts show the TTM Technologies (TTMI) and National Instruments (NATI).

The contract maker TTM rose above the 17.05 buy point in a cup base with a handle. The numbers are not good but the relative strength line is at a new high.

National Instruments has announced a strategic review that could include the sale of the company’s automated test and measurement equipment. Shares rose more than 16%, rising past resistance around 42.

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The Nasdaq’s winning streak will end in five days when it closes lower this afternoon. It is trading above the 50-day moving average. The 11,000 level has served as support and resistance since the second quarter of 2022, and now the Nasdaq may rise.

In four of the past five sessions, the S&P 500 has closed above its 50-day line for three straight days. But it is now hitting resistance at its 200-day moving average and testing a trendline near the index highs.

As The Big Picture said last night, some signs suggest the market may be taking a breather.

Banks Usually Go Down After Earnings

Major banks pared losses or rebounded higher after posting fourth-quarter stock market results on Friday.

JPMorgan Chase (JPM) returned higher. The stock dipped below the 138.76 buy point in its flat base, but recovered by midday. The company beat expectations in the fourth quarter.

Wells Fargo (WFC) lost at the open but was almost flat in midday trading after a mixed Q4 report. It reversed the December lows.

Bank of America (BAC) and Citigroup (C) also returns higher. Both are the primary view of analysts.

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Also in Dow Jones, UnitedHealth (UNH) is flat in a seesaw session, remaining above the bottom this week as it continues to form a flat base. The managed care manager beat revenue and earnings estimates for the fourth quarter. However, costs have risen almost as much as premiums.

In a first look at Q4 airline performance, Delta Air Lines ( DAL ) beat profit expectations but missed sales estimates, offering soft first-quarter guidance. The carrier fell 4% in heavy trade but trimmed a larger decline.

In economic news, the University of Michigan’s preliminary consumer sentiment index rose to 64.6 in January, from 59.7 in December. January was the highest level since April and exceeded economist forecasts.


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