The major indexes showed stingy behavior in the stock market today, refusing to give back any of Wednesday's decent advance, and edged higher late in Thursday's session. While the Nasdaq composite moved up 0.3% following Wednesday's 1.1% boost higher, Apple (AAPL), meanwhile, notched its best gain in weeks, rising more than 1.5% to 148.12 and coming within arm's length of retaking the critical 50-day moving average.
X Apple, despite not showing the same kind of huge runs as it did in the mid-2000s and early 2010s, nevertheless stands as an important market leader, particularly among big caps. Shares are still up more than 25% since breaking out of a cup-with-handle pattern at 118.12 on Jan. 6-9.
That cup with handle featured many bullish elements and set the stage for a new price run amid a turnaround in Apple's fundamentals.
Later this month, analysts expect the iPhone giant to post another quarter of low double-digit EPS growth and mild sales gains as Apple further expands its array of services, such as iTunes, that complement its market-leading consumer electronics hardware.
Apple's 83 Relative Price Strength Rating tries to offset a horrible E Accumulation/Distribution Rating, as seen in IBD Stock Checkup. The Accumulation Rating got hurt by the big two-day sell-off on June 9-12. That decline triggered a pair of sell signals for short-term holders in Apple.
The 83 ranking means Apple shares have outperformed 83% of all public companies in IBD's database over the past 12 months. Savvy growth investors know that strength begets strength. So in general, focus on those companies with a minimum RS Rating of 80 or higher while the market is in a confirmed uptrend.
The exception to this guidance, stemming from IBD's CAN SLIM investment paradigm, comes with turnarounds and large-cap or slow-moving stocks that form bases lasting six to 12 months or longer. In such cases, it's possible for a stock to successfully break out while the RS Rating is below 80.
The S&P 500, up about 0.2% with about half an hour to go on Wall Street, is definitely outpacing the S&P SmallCap 600 with a 9.3% year-to-date gain. The S&P 600 is up 2.4% since Jan. 1 after rocketing 24.7% higher in 2016.
The Nasdaq composite, also getting support from fiber-optic gear, select retail, financial and electronics names, edged around 0.3% higher, as the Dow Jones industrial average rose nearly 0.2%. Volume was virtually flat vs. the same time on Wednesday on the Nasdaq and mildly lower on the Big Board.
As seen in the general market indicators page, found in a link with the IBD Big Picture each day, the Accumulation/Distribution Rating for the Nasdaq stands at a negative D- on a scale of A (high accumulation) to E (high distribution) over the past 13 weeks. The Nasdaq is still saddled with six distribution days over the past 25 sessions, meaning that fund managers have sold shares more intensely than usual. Consequently, the current outlook for the market remains at "uptrend under pressure."
However, keep in mind that all of the major indexes are not far off their 52-week highs and are trading on the north side of their 50-day moving averages. Both facts are signs of strong institutional demand for equities, for now.
Will money coming out of bonds continue to go into equities? The possibility is high. The yield on the benchmark U.S. 10-year Treasury bonds is at 2.31% following a second round of Congressional testimony from Federal Reserve Chair Janet Yellen. Stocks got a lift Wednesday after her comments hinted at a slow, measured path toward reducing the Fed's massive balance-sheet assets and raising the cost of money.
Meanwhile, Activision Blizzard (ATVI), Veeva Systems (VEEV) and Sina (SINA) deserve close watch as these highly rated fast-growing companies continue to show the kind of price-volume action historically seen in true market leaders.
Activision (98 Composite, 93 RS) has helped push the gaming software group to a No. 2 ranking among 197 IBD industries for six-month relative price performance. The owner of major game titles including Overdraft and World of Warcraft recently survived a first real test of support at the 50-day moving average following its February breakout past a 45.65 cup entry.
Veeva, the No. 1 company in cloud-based business software for Big Pharma, showed solid institutional support during several dips to its 50-day line since mid-June. Watch for a new base to also possibly form.
Veeva, formerly on IBD Leaderboard, has grown earnings per share 25%, 25%, 15%, 83%, 47% and 47% vs. year-ago levels in the past six quarters. The Street sees earnings jumping another 33% to 20 cents a share in the July-ending fiscal second quarter.
Sina, one of the most popular social-networking platform and internet-content providers in China, posted a fifth up day in a row, rising 0.5% to 92.78. That left the stock only 5% off its 97.79 all-time high.
The midcap internet play has been basing for more than seven weeks, and shares showed rock-solid buying support along the 50-day and 10-week lines.
Sina (99 Composite, 96 RS) is expected to increase its Q2 profit 111% to 57 cents a share, on top of a 350% surge in the year-ago quarter.
The internet content industry group is No. 13 and up 21% for the year so far.
RELATED:
How Can You Really Spot Major Market Tops? Here Is The Easy Way
Is The Market Rally Back On Track? Read The Latest IBD Big Picture
