Futures for the S&P 500 index, Dow Jones industrial average and Nasdaq 100 rose solidly Tuesday morning after a huge stock market rebound Monday. The S&P 500 index and Dow Jones rebounded from around their 200-day moving averages. Meanwhile, Microsoft (MSFT), Cisco Systems (CSCO), Apple (AAPL), Nvidia (NVDA), Alibaba (BABA) and Applied Materials (AMAT) were among leading stocks to reclaim their 50-day moving averages.
XThese tech giants, which all outpaced the major stock market averages on Monday, share some common features. Microsoft, Cisco Systems and Nvidia all saw their relative strength lines, which track stocks' performance vs. the S&P 500 index, hit record highs. Nvidia and Alibaba are among IBD 50 stocks expected to deliver accelerating earnings growth in their current quarters. Microsoft, Cisco and Apple are all Dow Jones components.
Only Alibaba and Applied Materials still have valid buy points. (Alibaba and Applied Materials also have the highest Composite Ratings of these six stocks, with Alibaba at 97 and Applied Materials at 98.) The other stocks have work to do on forming new consolidations.
Among other notable moves above the 50-day line, Lockheed Martin (LMT) and General Dynamics (GD) closed above that support, as defense contractors are among the stock market leaders. The iShares PHLX Semiconductor (SOXX) and Innovator IBD 50 Fund (FFTY) were key ETFs regaining their 50-day lines.
S&P 500 Extends Monday's Gains
Keep in mind that Monday was just one good day. The S&P 500, Dow Jones and even the Nasdaq still look shaky, with the stock market uptrend under pressure. Be very cautious about any new purchases.
Futures for the S&P 500 index rose 0.55% vs. fair value. Dow Jones futures climbed 0.5%. Nasdaq 100 futures were up 1% vs. fair value.
Microsoft
Microsoft vaulted 7.6% to 93.78 in strong volume on Monday. Morgan Stanley named Microsoft a "top pick" and on its way to a $1 trillion market cap, thanks to its strong growth in cloud computing. The stock was adding 0.9% early Tuesday.
Shares of Microsoft briefly cleared a 96.17 entry point from a flat base earlier this month, but eventually fell too far for that buy point to remain valid.
Cisco Systems
Cisco on Monday gained 3.9% to 44.06 on volume that was modestly below average. That's well extended from a 34.20 cup-with-handle buy point finally cleared decisively in mid-November. The stock inched up 0.7% in the premarket Tuesday.
The networking giant appears to be turning the corner in its shift from hardware such as routers and switches to faster-growing services and software.
Apple
Apple rose 4.75% to 172.77 in somewhat lower volume on Monday, ending a five-day skid. Shares were up 0.8% early Tuesday.
The iPhone maker cleared a messy, V-shaped, high-handle cup base buy point of 180.58 earlier this month, but that quickly faltered. That entry is no longer valid, even with the RS line at a new high.
Nvidia
Nvidia popped 4.9% to 244.48 on Monday. Like Cisco and Apple, volume was slightly below normal. Shares of the graphics-chip maker edged up 0.8% early Tuesday.
CEO Jensen Huang will give the keynote address at the Nvidia' GPU Technology Conference Tuesday at 9 a.m. PT.
Alibaba
Alibaba rose 5.1% on Monday to 190.50. The Chinese e-commerce giant is working on a 206.30 buy point. Its RS line isn't too far off record highs, but also has gone sideways for the past seven months.
Shares of Alibaba rose 0.7% early Tuesday.
Applied Materials
Applied Materials shot up 5.6% to 58.47 on Monday, just below a 58.83 double-bottom buy point. The chip-equipment giant was not yet active Tuesday.
Applied Materials cleared that entry decisively in early March and rose to a record 62.40 on March 12. Shares then pulled back, selling off significantly last week, but not quite enough to trigger an absolute must-sell signal.
Fellow chip-gear giants Lam Research (LRCX) and ASML (ASML), which closed above their 50-day lines Friday, also rebounded Monday to just-below still-valid buy points.
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