Nasdaq Undercuts Support In AI Sell-Off; Guardant, Fortinet, Ezcorp In Focus — Stock Market Today

[00:00:00] Speaker ?: Редактор субтитров А.Семкин Корректор А.Егорова [00:00:30] Alyssa Quorum: Good afternoon, everyone, and welcome to Stock Market Today for Tuesday, June 23rd. It's Alyssa Quorum here. And a lot of the red on the screens today we will get into and the NASDAQ composite undercutting a key support level. Joining me now to discuss the action in today's session and a couple of stocks for our radar is my colleague, IBD News Editor, Ed Carson. Ed, great to see you. [00:00:57] Ed Carson: Great to see you, Allie. Yeah, I want to take a look at three stocks that are not involved in that sell-off. Garden Health, Fortinet, and EasyCorp. [00:01:05] Alyssa Quorum: All right. Well, I guess that's the reason for looking at them, right? If they're holding it better than the rest of the market. Worth revisiting those. All right. Let's take a look at the major indexes. The NASDAQ composite on the day down 2.2%, closing below the 50-day moving average. Meanwhile, the NASDAQ 100 down 3.3% on the day. So definitely a large cap tech bent to the sell-off today. Ed, the S&P 500, in comparison, down 1.4% on the day, still above that 50-day moving average. The Dow only down a fraction, some one-tenth of a percent here. You can't even really see the sell-off in blue chips. Meanwhile, the Russell 2000 small cap index down about 1%, still looking in character there. So with tech bearing the brunt of the selling, Ed, talk to us about what happened today. [00:02:01] Ed Carson: Yeah, there was heavy selling overnight. It's interesting because on Monday, the QQQ only fell 0.2%. So, you know, when the NASDAQ fell 1.3% and a lot of, that's the fight. Now, some of the divergence was SpaceX, which plunged yesterday and was up a little today. But also, Google sold off. There was a number of bad mega caps. And the Qs really didn't have a bad day. A lot of, really, the big winners rallied strongly on Monday. I mean, it was sort of an unusual divergence. Well, South Korea didn't go along with that. Let's just sort of say, like, there's that. EWY, I think, is the ETF there. It's dominated by memory chip giants Samsung and SK Hynix. And they both sold off more than 10%. And it was, you know, I think regulators there were trying to rein in margin, you know, how much margin people are using. So that triggered a sell-off. But, yeah, so there was really heavy losses in AI stocks, which was a complete reversal from yesterday. So, yeah, it was just sort of, you know, a really big shift in there. And it's something that investors have to pay attention to. I mean, there were some big losses. We've seen a lot of volatility in several weeks. And you could say, well, okay, there was this SpaceX reason, that reason. But still, the NASDAQ went below its 50-day line. The S&P is almost there. So, you could see some real big breaks. There might be some jitters ahead of Micron. So, who knows what will happen? We could sell off or rebound tomorrow and then do the opposite after whatever Micron actually does. And obviously, you know, would it be surprising if Micron sold off over several days to the 50-day line? Not really. It's done that in the past. So, it's gone on a monster run. And the same goes with all the names in that memory space or these other things. So, it's just something to be aware of. What can you tolerate? I mean, the thing is, those who held on have generally been happy. I'm glad I held on. If you held on, I did not own Micron. But if you did, through all these things, you're happy. But at some point, you will not be. Or at some point, you'll give up when it's down 40%, you know, kind of thing. Or you've taken it. And again, you can take things. You can scale in, scale out and try to get back in. But I'm just saying is that you have to have a plan. You have to have a strategy. And yeah, it was really ugly action today, you know. And investors have to take note of that. I'm still trying to figure out how much I want to take note of it. And if I react, think about it tomorrow. It's like if the market balances it, okay, I'll, you know, I took a little bit of action. But I may take more action if the market sells off more, you know. And we're an hour into the trading session tomorrow. [00:04:39] Alyssa Quorum: Yeah, and I think, Ed, what you're highlighting is a big question or a big struggle for a lot of active investors in a volatile environment like this. You take that step back. And we've been in a very powerful trend for months looking at the SMH here, hitting a new high yesterday. But a bumpy ride along the way, at least in the month of June. So how much, to your point, do you take some profits off the table, whether that's into strength, once you see these big hits, or do you buckle in for the bumpy ride that's ultimately so far been leading higher? [00:05:20] Ed Carson: Yeah. And I think another thing is, if you sold off, if you took down your exposure, which was totally understandable a few weeks ago, and now you made some recent buys, well, a lot of those buys, there's some names. We're not going to, but I was just thinking about Max Linear or Microchip. Those are just a couple of names that just pop off that, you know, one could have bought yesterday and, well, they're down a lot. It's, it's one thing to take a 7% haircut on a stock that you're up 150% on. It's another thing to be down right away. So, you know, you might have to cut some recent, recent buys, or maybe there's the stocks that are falling below sharply, both are 21 day lines and others are holding up. So you might decide, I don't care about things. I'm not going to worry about my exposure levels, but you should still be taking, you have to follow your rules, um, on individual stocks as well. So there's, there's a lot of different things and yeah. And part of it is that do you hold for that long run or do you go shorter term? It's not necessarily an easy, easy answer on that. Uh, holding for longer has really worked for during this rally. Uh, and it's just, you know, to see if that continues. [00:06:25] Alyssa Quorum: Yeah. Well, like you said, at some point it won't. And we did on yesterday's show, as well as IBD live in the morning, highlights some breaks of upper channel lines, that can be a strategy that investors use to take some off the table. Uh, so, you know, whether it's a new buy, like you're saying, maybe cutting your, your loss, looking at those levels, knowing what your portfolio risk is for those new buys. And then for those positions that you have more profits in, okay, what is your strategy? Are you, are you one who likes to sell into strength? Are you one who likes to wait for a break of support at a moving average before you make your move? Also, how are you thinking about maybe big percentage declines on a day like today in context with the market circling back to the NASDAQ closing below the 50 day? I think that's worth reiterating here, Ed, we are of course trading at a level higher than a couple of weeks ago, but this is the first close below the 50 day line in this rally. I think you, if you take a step back to yesterday, you know, we were right there at the 21 day line. That's the key level for the power trend 26,000. And I mean, we're well below both of those. So if the selling here does continue, which after today, you know, it does look like the odds have increased for that. There's no guarantee, but it does seem like next stop would be the lows from earlier in June to see if, if we can get some sort of support there. [00:07:59] Ed Carson: Yeah. And you're going to, so because we have that, the prior lows, you could argue, well, I'm not, you know, again, it's not all or nothing, but you know, if we sell from here, I think there's definitely arguments that you should be cutting back. And certainly if we went below those lower lows, because then we'd be decisively below there, and we'd be below a lot of the pauses, a lot of the buys over the last six weeks, you know, would be probably, would be under. Now, some are, have flown. I mean, I know that, but a lot of them will have not. And you can say, well, okay, NVIDIA, okay, Google, oh, it's SpaceX, these are the names. But it's like, at the end of the day, you can't say, let's just exclude half the market cap. You can't do that and say, everything's fine. You, you, we look at these indexes for a reason and yeah. So in addition to Micron earnings Wednesday night on Thursday morning, we'll get the Fed's favorite inflation gauge. So, which again, if the market's shaky, just, you don't, you know, if there's any reason there, their market's a little bit more concerned about inflation lately with the last week's sort of hawkish tone from the Fed, so Thursday morning could be very interesting, positive or negative. So just, just be ready for that. [00:09:06] Alyssa Quorum: Yeah. I mean, it's pretty clear that we are now in an environment of heightened volatility. So yeah, we've, we've got to be prepared to roll with those punches. And let's go to the S&P, here's a look at the SPY ETF, faring a little bit better, but not a whole lot. Also below the 21-day line, that's the green line on the chart, the 50-day line, it's, it's barely above that level. So support still very much in question. I would say the other thing to keep in mind here, Ed, as we're talking through this is, the last pullback to the 50-day line turned out to be a great buying opportunity. So as this week progresses and with the potential catalysts that you mentioned, I think actively managing the portfolio is important, but that goes both directions, right? Cutting back and being open to the fact that, Hey, what if we do get another bounce? We have looked at some of these bull market precedents, you know, like the late nineties it's, it's a choppy ride on, on the way up and you do get some of these more or less violent pullbacks. [00:10:20] Ed Carson: I completely agree with that. And you're right. I mean, this could be environment where you, one day you were cutting and the next day you're adding, and that just sort of could be the way it is. I mean, there definitely were buying opportunities and that's what makes these support levels so important. It's sort of like game sevens of playoff things. It's like both teams, one, three games or one moves on one doesn't, you know, it's sometimes the market, if the market breaks from here, that's, that's really important. If it rebound from here, that's really important. And so I, I just, yeah, I think those, those are all just have to be flexible, have your exit strategies ready, but have your watch list ready. And there's been a lot of churn in that because some of these names and we've, you know, and it's not just to necessarily go back into AI. It could be that you, for whatever reason, just because of choice or because you need to, you scale out of some AI stocks because I'm going to go into cybersecurity or I'm going to go into a regional bank or I'm going to go into this testing firm. You know, there's other things out there. Again, it's not, you know, it's these little things, are we broadening out? Are we rotating? You never know until after the fact, but there, you know, definitely don't just have your focus on AI. I think those who didn't have entirely AI and I'm probably too much in AI, you know, we're, we're thankful because there's a lot of 8%, 10% losers out there. And it's not fun to have a portfolio chock full of that. [00:11:38] Alyssa Quorum: Yeah, I'm, I'm right there with you, Ed. All right, let's continue digging into the nuances of the market action here. Let's go to the Dow and the Russell real quick, Ed, before we take a look at some sector ETFs. [00:11:58] Ed Carson: It shows you that there was, you know, the Dow wasn't so bad and that found support at the 10 day line and, you know, that's coming up, that RS line is coming up again, then the same thing with IWM. And I think the Russell actually didn't even touch the 10 day line. You know, I know this is ETF, but the actual found support there, but I think the Russell didn't actually test it if I got that right. So even though it fell almost a percent, you know, that looks, that looks fine. You could say, you know, um, you know, and then, you know, I think RSP and QQQE, those are some, you know, trying to hold that 21 day line looks in much better shape. But then again, you know, one good day, you could be really strong and the other one, you know, another way QQQE, pretty big loss, not as bad as QQQ, still holding that 21 day line. It could, you know, one, one good day. And we're talking about right at record highs again. So a little better situation here. Again, you don't want to make too much of it, but there was the, the chart looks better. Maybe the individual days weren't necessarily better, but the chart looks better on this and a lot of the growth leaders. [00:13:02] Alyssa Quorum: Right. I mean, I think it is a concern, uh, for some of these charts where, you know, it does on the one hand, it does look like we're running out of steam a little bit, uh, coupled with that volatility, but like you said, in a couple of days, couple of weeks, uh, we could, we could be looking back on track here in no time. Uh, so we're going to continue to monitor the action on a daily and hourly and, uh, you know, minute by minute basis as we, uh, as we like to do here at IBD. Okay. Moving on. Let's take a look at the 10 year yields. Your thoughts on how this is acting. [00:13:42] Ed Carson: You know, I mean, it sort of, it's, it bounced yesterday. It really, you know, today I'm sure it was just falling because of the market action and the stocks. Uh, we're still holding the 50 day line and it's interesting, you know, there's been more movement in the two year yield, which is just closer tied to the fed policy. So this one, you look at this and go, why is everybody worried about the fed? Well, this isn't where, if you're worried about the fed, this isn't where you look at it. And the two year yield is at highest levels in like 16 months. So this is a little bit more of a combination of maybe concerned about how the fed rate hikes might potential fed hikes could affect the economy. So, uh, this isn't sort of where the game is in bonds. I think right now. [00:14:21] Alyssa Quorum: Yeah. Okay. Let's, uh, one more question for you on the Korea thing. Ed, if this impacted the U S market so much today, do you think some investors are going to be looking, uh, to the next session for Korean stocks as some sort of potential, you know, I mean, there's no guarantee, but some sort of tip off for the reaction. I'm sure I'm going to pay attention to it. [00:14:50] Ed Carson: I mean, I, I write an overnight column, but I'm going to pay more attention to the cost speed than I, than I usually do. Uh, and we'll just see. And then of course we'll do it again after micron earnings, we'll see not just how micron performs, but how the Korean memory chip giants perform overnight on that. So, uh, yeah, this is a, this is an important market since this is such a, such a heavy, uh, heavy AI is this is the closest thing to a global AI index almost. Cause it's 40% Samsung and SK hynix. I think. [00:15:19] Alyssa Quorum: Right. Big waitings there. Okay. Let's look outside of AI quick updates, uh, elsewhere. Not all good. So here's a look at XME, the metals and mining area, definitely taking a big hit today as well. [00:15:33] Ed Carson: Yeah. Stronger dollar, maybe concerns about the economy and who knows, but yeah, this has really taken a, taken a hit in the last several days. [00:15:41] Alyssa Quorum: Yeah. And I would say, you know, already undercutting those, uh, earlier June lows versus, uh, some of the other areas still holding above that. So keeping that in mind, as we're looking at relative strength or weakness, let's check out the biotech area holding up incredibly well up on the day, eight tenths of a percent. Continuing the breakout here, Ed. [00:16:04] Ed Carson: Yeah, this is one of the stronger areas. There's a lot of biotechs and a lot of testing firms. And I think garden health is in this one. I'm not sure, but definitely some of those kinds of firms are in it. A lot of strength. Definitely. People should be looking at that and, uh, probably more geared toward the, the ones with rural revenue and profits, but I think this one is the bigger names and this is a safer way to play it. [00:16:26] Alyssa Quorum: Okay. And you mentioned cybersecurity. So let's check in on the hack ETF definitely hanging in there too. [00:16:35] Ed Carson: Yeah. There's a number of cybersecurity firms that look quite similar to this and, you know, uh, you know, does it base out, does it bounce off the 21 day line or like some other names? Does it finally falter? So this is one to watch. I think you'd want to see some strength, uh, before doing anything new, if you don't already have a position, but, uh, very interesting action right now. [00:16:56] Alyssa Quorum: Yeah. Maybe some sort of trend line. I also could see maybe a little bit more of a shakeout before it moves up, but that old [00:17:04] Ed Carson: buy point in the 50 day line right there, you know, yeah, exactly. [00:17:08] Alyssa Quorum: And you mentioned regional banks as well. So checking in on that area outperforming today in a notable way up 1.6%. [00:17:16] Ed Carson: Yeah. And there's a lot of banks are doing well. I mean, this, and regional banks aren't even the strongest, but this is closer to a buy point, but a lot of these banks, big global banks, us and foreign are already extended, but, uh, a lot of strength in the banks right now. [00:17:30] Alyssa Quorum: Okay. Moving on. Let's take a look at G H. This is garden health. We've been tracking this flat area, a shelf pattern. One might call it ed. Let's also take a look at the, the weekly chart. Uh, I would say some pretty tight action there on the weekly after really powering higher about, what was that? Six weeks or so or go, uh, to break out of the base here. So one to watch, not AI and in medical, which we've seen some notable strength. [00:18:07] Ed Carson: Yeah. And it's just like, this is great action. Cause it went up so much and it's like, gosh, it was pretty extended from the 50 day line, even the 21 day line when it broke out. Uh, and yeah, if it can stay in here, it would have a three weeks tight, but, but just getting above, I think that pattern, the top area, if you get above that area. Yeah, that it was sort of flirting with that today. Um, our S line is strong, there's strong revenue growth. This is a strength, strong area of the market right now. Um, so yeah, this is, this is a leaderboard name. Uh, yeah. And you know, it's not powering higher, which is sort of nice. Cause this isn't the kind of day I really want to be adding things. I mean, I know you can, cause there were some things, but man, it's hard when the NASDAQ 100's down over 3%. Uh, so I'd rather, but this is one to, to watch for sure. [00:18:54] Alyssa Quorum: Yes. Okay. And in cyber security, Fortinet also looking quite strong here, clear level of resistance around the 150 area. And seems like this is the best looking cyber security name. I mean, it looks even stronger than that hack ETF. [00:19:13] Ed Carson: Yeah, I agree. And this one busted out on earnings and it lifted some others. While the others, you know, of course they had already rallied. But this one moved on the earnings. The other ones like Palo Alto and CrowdStrike sort of fell on earnings. This one's held up the best. You know, they're fine. And Palo Alto there, Palo Alto looks pretty good. CrowdStrike is sort of looks like hack. I think, you know, in the sense like coming down to the 21 day line. So that's, that's fine. But Fortinet, yeah, the strongest, uh, on a weekly chart, it has a three weeks tight. And, uh, so, um, you know, I like it a little longer. I mean, I, you know, usually for a new position, but I do think people who did get this could get, I mean, you can, you can do whatever you want. I mean, it's better than buying anywhere in the middle of nowhere. But, uh, I, I prefer that for an add on rather than a new position at this point. Maybe if it was at least another week, I might be more interested or tested. The 21 day line came off of that, but a lot of strength, uh, softwares try to make a recovery. This is, you know, while most, a lot of them have pulled back when this one really didn't. Uh, so yeah, you have to take notice of that exactly. [00:20:17] Alyssa Quorum: And I think to your point about the buy point to use, like you said, three weeks tight, usually an add on opportunity. I think it also depends on market conditions. If we were still in that super steady lower volatility power trend pre early June, I think aggressive traders might be more willing to initiate a new position with, uh, you know, more of a non-traditional type entry point. But yeah, you know, it's getting close to feeling like a flat base or, or a, a high shelf here maybe. All right. Let's go to easy PW. This was our stock of the day today, right? [00:21:00] Ed Carson: Yeah. And it faded just a little bit at the end of the day. There's that trend line. It bounced about the 50 day line intraday. It was for most of the day, it was decisively above that 50 day line. So I'm not sure when that faded off. Yeah. It was just sort of that final hour just sort of gave up some gains. Uh, and it was a tough day. Uh, this one has had some wild action. I mean, let's be clear. It's like, uh, that, that reversal from there on earnings, not great. And then, you know, so it big drop there. This is tough. We've seen that with some other, saw that with some AI names, uh, like some of these, some of the, some of the AI energy plays, they sold off and then they came back. Uh, I would have liked a little more strength. I think, you know, when it was at the highs, it seemed more like, okay, it was actionable because it was making such a powerful move, but it gets a little bit higher. I think a little bit of strength. Yeah. Right above that line would be a little bit more convincing. The earnings are strong. I mean, there's, you know, it's a K shaped economy, affordability issues. People turn to pawn shops, uh, while gold prices are well off their highs, it's still after a mammoth run and gold prices, people turn in gold. And that's a big factor. High gold prices have been a big driver. So it's that, that's a trend that it has helped some of these pawn shop operators. So, uh, you know, they are, you can see the RS lines made a pretty nice run over the prior year. It's not, this isn't just one that's been chugging along sideways where you park your money. Uh, you know, it's been, it's been doing very well. Uh, and again, when you can have an R on our eyes, this is the kind of thing you want to be looking for stocks for showing relative strength that are outside of AI. So you can have a little bit of diversity without giving up leadership, you know? And, uh, so nice action here. [00:22:43] Alyssa Quorum: Yeah. All right. Well, you make a good case there, Ed. We'll put it on the watch list. Anything interesting after the close? I know we had a few tickers of interest. Are we seeing any action? It does look like we are seeing some action here for FedEx. I'm seeing the stock down about four and a half percent right now in reaction to earnings. [00:23:04] Ed Carson: Yeah. And I don't know why it beat views. Uh, I, I haven't seen what the details, what the guidance was like, but obviously not a great reaction. It is interesting right now. FedEx F it's freight spinoff. I will be reporting on Thursday. That one was up. And so I don't know. I don't know what's going on. If that is, if it's, I don't know how much trading is really happening. Uh, if there's any reason that, uh, we, I haven't seen news on this other one was CBRS. That's Cerebus systems. You know, we talked about micro and AI and chip maker, but this is a decent sized AI chip maker having its first earnings report. Haven't seen earnings here. That would be a very aggressive entry. We're still waiting for that turn, uh, to come in. And this is, of course, a warning when we've talked about SpaceX and others. It's like, guess what? You know, you can start off strong and then, then you wait for the IPO base, which with this stock hasn't happened yet. Uh, maybe it will. Um, but, uh, so it'll be interesting to see this report. I just haven't seen any numbers on that one. Yeah. So far. [00:23:59] Alyssa Quorum: Yep. We will wait for the numbers from CBRS, but keeping an eye on the 250 price level as a first area of resistance to clear for some aggressive traders. And, uh, yeah, maybe it'll round out an IPO base eventually after that, but, you know, and it was, it was up on the day. So that's kind of interesting to know. [00:24:23] Ed Carson: Yeah, it is interesting. Yeah. [00:24:25] Alyssa Quorum: But, uh, still, still well off of those opening highs. And since you mentioned SpaceX, let's go there. Uh, it was up on the day as well, a little less than 1%, but it round tripped pretty symmetrically here, Ed, uh, from its day one of trade undercut, uh, the day one, just a little bit closed above it, um, still hasn't traded near that IPO price of one 35 yet closing today around one 56. But to your point, this is why we wait for an IPO base and Hey, you know, for aggressive, aggressive investors who like that hook pattern, you know, maybe you get a lower entry around 160 or so versus the, the two 20 level on day three. [00:25:15] Ed Carson: Yeah. And we'll just have to see how this one shapes up. As long as it holds above the one 35 IPO price, I think that, that would be a concern. But it hasn't done that. So again, but this is just, we just don't know. I mean, you tell me where this is going next. I don't know. I mean, it's like, this is an IPO and it might go up 30% and then fall 40% and then or something in the IPOs are wild and it's just let it find its footing. And we'll see, uh, nice that it reversed higher today. [00:25:40] Alyssa Quorum: Yeah. And then some milestones to, to be thinking about down the road. You have, of course, the first earnings report when it's a publicly traded company, a lot of eyes are going to be on that in a couple of months. Also the IPO lockup, uh, you know, it's, there's a lot, that one's confusing. [00:25:59] Ed Carson: As I recall, there are just like a ton of lockups. Like there's like, there's just like 10 lockup dates and I don't know. I mean, I didn't look, you know, I'll pay more attention to it as they get close. But I mean, there were so many, it's like, oh, okay. And it's just, so there'll be a whole tiny months in a week or so. The NASDAQ 100 will probably include this. Uh, I mean, I don't know how much of a bump that'll be because everybody knows it's happening. Um, but that's, that's a big index. That's going to include that. Uh, so a lot is going to be happening. Yeah. And, uh, so yes. [00:26:32] Alyssa Quorum: And we'll be following it every step of the way and giving the audience the IEBD perspective. We appreciate it. Ed, as always, thank you so much. [00:26:42] Ed Carson: Thank you. [00:26:43] Alyssa Quorum: And thanks everyone for tuning in. That's it from us for today, but we will be back with more tomorrow morning on IEBD live. Investors.com/IEBD live for all the details on that. We'll see you there. And then we'll also see you right back here tomorrow after the close. [00:27:00] Speaker ?: And then we'll see you there. And then we'll see you there. And then we'll see you there. And then we'll see you there. And then we'll see you there. And then we'll see you there. And then we'll see you there. And then we'll see you there. And then we'll see you there. And then we'll see you there. And then we'll see you there. And then we'll see you there. And then we'll see you there. And then we'll see you there. And then we'll see you there. And then we'll see you there. And then we'll see you there.