FAANG Stocks, Nasdaq Still Leads At Midday; Will Visa Stage A New Breakout?
FAANG stocks continued to act bullishly Thursday with a majority of the five big-cap techs showing gains of 1% or more as Wall Street continued to respond positively to earnings growth in the internet, leisure and consumer spending sectors. Meanwhile, Visa also rose rapidly and took out an aggressive entry point at 125.54 within a nearly 12-week flat base.
In the stock market today, volume was rising on both exchanges vs. the same time on Wednesday as the Nasdaq, up 1.2% near midday, still stood head and shoulders above the 0.6% gains for the S&P 500 and the Dow Jones industrial average.
The Dow industrials’ biggest winners included Visa (V), Home Depot (HD), UnitedHealth (UNH) and McDonald’s (MCD), all of which coasted ahead 2 points or more. Visa’s flat base shows a regular buy point of 126.98, 10 cents above the base’s left-side high.
Visa reported strong earnings of $ 1.11 a share in the March-ended fiscal second quarter, nearly 9% above the Thomson Reuters consensus estimate. Revenue accelerated 13% to $ 5.07 billion.
As seen in an IBD daily chart, the blue-colored relative strength line of Visa is jetting into new high ground, a bullish sign. A rising RS line, which is separate from IBD’s Relative Price Strength Rating, means a stock is outperforming the S&P 500.
Alphabet (GOOGL) was initially up the least among the five FAANG stocks, just 0.4% at the start, but then shares caught up with the Nasdaq by rising 1.5%. Netflix (NFLX) powered up more than 2.6% and is trying to snap a six-session losing streak as shares are finding bullish support near its fast-rising 50-day moving average.
Netflix is a member of IBD Leaderboard. The daily and weekly charts of Leaderboard names are annotated to help IBD readers pinpoint buy points, sell signals, follow-on entry points, and significant moments in the chart action that underscore a stock’s strength or weakness.
Facebook (FB) was the best FAANG stock Thursday, soaring 9% and leaping back above the 50-day moving average after strong earnings.
IBD Leaderboard currently holds eight stocks, including oil products transport play Kirby (KEX). Kirby joined Leaderboard on April 5 and on Thursday the stock rallied as much as 10% past a new first-stage base.
FAANG Vs. FANG
You can read the latest key news on the FAANG companies by going to “News” on the Investors.com homepage, then clicking on “FANG Stock News.” Also, for Apple (AAPL), you can simply type in “Apple” in the search box on the home page and find IBD ratings and the latest news.
Chartwise, Apple is trying to keep its correction mild as shares rallied 1% to 165.39. The iPhone and iPad giant is slated to post fiscal Q2 results on May 2 after the close. Analysts on consensus see earnings rising 28% to $ 2.69 a share. That would mark the highest year-over-year increase since the fourth quarter of fiscal 2015 (ended in September).
In IBD Stock Checkup, Alphabet scores just an 83 Composite Rating on a scale of 1 to 99, with 99 the best possible. The Google search engine owner has become a laggard with a small loss since Jan. 1. Earlier this week, Alphabet posted a 28% rise in first-quarter earnings to $ 9.93 a share, matching the 28% increase in Q4.
Buy Alphabet? Or Just Watch For Now?
Alphabet is holding its own around the 200-day moving average, but is around 13% below its all-time peak of 1,197. Watch to see if the stock can muscle back above the medium-term 50-day line; that would signify renewed strong institutional demand.
Netflix, which is trading just 7% off its 338.82 high, holds a top-notch 99 Composite rank. The Street sees the video streaming giant’s earnings bolting 129% higher this year to $ 2.86 a share.
Netflix has 435 million shares outstanding, while Alphabet has a total 695 million shares across all of its share classes.
QQQ Jumps Sharply
The Nasdaq 100-tracking PowerShares QQQ Trust (QQQ) ETF stretched its morning gains, advancing 1.7%. At 161.37, QQQ is up nearly 3.6% since Jan. 1.
At 7094, the Nasdaq composite is now up 2.8% year to date. It advanced 28.2% last year.
The Innovator IBD 50 (FFTY) ETF, up 34% in 2017, jumped 1.8% to 33.02 following bullish support at the 200-day moving average. The exchange-traded fund is still down modestly in 2018.
Watch The Restaurant Names
Chipotle Mexican Grill (CMG) and Domino’s Pizza (DPZ) gapped up on better than expected results. The former is building a new first-stage base.
Chipotle, which recently hired a new CEO, notched a 33% pickup in adjusted Q1 earnings to $ 2.13 a share as sales edged 7% higher.
Domino’s stretched its rally past a large double bottom base, with a 211.85 buy point, to nearly 19% after the global pizza chain notched a 59% rise in Q1 earnings to $ 2 a share. Sales jumped 26% to $ 785.4 million, the strongest year-over-year gain in more than five years.
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