A late-afternoon downdraft of selling pinched the stock market's gains on Monday, yet the overall trading carried a generally quiet tone with less than two weeks left in the year.
Meanwhile, Apple (AAPL) and Nvidia (NVDA) continued to show oomph in their recent rallies. The former gained 0.6% to 116.64, creeping closer to a potential new breakout at 118.79; the latter rallied 1.2% to 101.63 and made a new high.
Nvidia is also extended from any proper buy points, yet still points to solid demand from institutional quarters for tech stocks overall.
The Nasdaq composite rose nearly 0.9% to as high as 5483 in the first 90 minutes of trading before fading to a gain of less than 0.4%. That's on top of a 3.6% advance two weeks ago and a slight dip last week. The Nasdaq 100 slightly outperformed, up just slightly more than 0.4%.
The S&P 500, hampered by steep declines among toy, newspaper, metal ore, agricultural chemical and shipping stocks, edged just 0.2% higher. The Dow Jones industrials gained 0.2%. Small caps outperformed big caps as the Russell 2000 rallied more than 0.5%.
At 1371, the Russell is up 20.8% since Jan. 1, outpacing the S&P 500's 10.7% year-to-date gain.
The new base carries a 118.79 entry. On Monday, IBD reported that Apple may feature a curved OLED display in its next-generation iPhone, matching what its rival Samsung Galaxy 7 Edge already has.
Nvidia, meanwhile, is currently making the sort of run that Apple was capable of doing when it broke out of an early-stage base with a 24.94 buy point (before splits) in March of 2004. Over the next 11 months, Apple rose 264% to a high of 90.88 before making its next significant correction. Over the next six months, the iPhone maker built a new base that featured a 27% decline from high to low.
That decline fell within the normal parameters of cup and double-bottom bases. It also showed that long-term underlying demand for Apple shares back then was incredibly strong.
Thus, those who bought shares at that prime entry of 33.16 have the luxury of deciding on holding the stock through the next normal correction. All great stocks eventually correct in price and form bases (launchpads for potential new breakouts) en route to superior long-term gains.
The recent growth acceleration seen in Nvidia's fundamentals should tilt the investor toward a longer-term hold objective.
Earnings per share have grown 13%, 18%, 21%, 39%, 56% and 104% vs. year-ago levels in the past six quarters. That's a rare show of rapid acceleration in the size of profit increases and is a sign that the designer of semiconductors is doing something special.
Nvidia has two main products — the GPU (for graphics) and Tegra processors — that serve customers in the gaming, professional visualization, data-center and automotive markets.
In the third quarter, Nvidia reported an 87% jump in Tegra processor revenue to $241 million as GPU revenue climbed 53% to $1.7 billion. As for product segments, automotive revenue jumped 61% to $127 million while data-center revenue soared 193% to $240 million.
Yahoo Finance on Monday named Nvidia company of the year.
Also in the stock market today, Qualcomm (QCOM) rose nearly 0.7% to 66.95 and is trying to rally back above its key 50-day moving average. Qualcomm, which has plans to acquire industry peer NXP Semiconductors (NXPI), is also showing fine growth acceleration (EPS down 26%, then rising 17% and 41% in the past three quarters).
Revenue fell 19% in the first quarter of this year, marking a fourth quarter in a row of falling sales, but then rebounded 4% in Q2 and 13% to $6.18 billion in Q3.
In the business software and entertainment field, Microsoft (MSFT) continues to show stunning strength. The megacap tech hopped 2.1% higher to a new high of 63.62, climbing further past a 58.80 buy point within a base-on-base formation.
Find the 58.80 exact entry by adding 10 cents to the Aug. 26 intraday high of 58.70. In the flat-base portion of the base on base, the stock declined just 5% from that intraday high.
The operating-system king and maker of the popular Xbox video-game console is on track to post its biggest profit increase in more than three years. Wall Street sees fiscal Q2 earnings jumping 26% to 78 cents a share.
In the past six quarters, Microsoft showed year-over-year changes of +11%, +8%, -11%, zero change, +11% and +9%.
Revenue is expected to fall 2% in the December-ending quarter but then rebound nearly 3% in fiscal Q3.
RELATED:
The Case For A Trump Era Bull Market: Which Sectors Will Win?
What Is The Bottoming Base Pattern, And How Does An Investor Profit From It?
The Bottoming Base Pattern, Part II: Why Apple Formed It In 2009
Growth And Income: Why Qualcomm Offers Both
