Friday-afternoon action in stocks is capping a remarkable week of activity. Industrial stocks showed muscle, Chinese equities attempted a bottoming out, and a profitless pot stock soared as much as 175% over a three-session period before crashing more than 60% off its 300 peak.
XAt around 2:15 p.m. ET, the Dow Jones industrial average led the major indexes with a gain of around 0.2%. It marked a new all-time high of 26,769, stretching year-to-date gains to 8.3%. The blue chip index is now poised to rise more than 2.2% for the week. The Dow gained 2.3% in the week ended July 13.
Dow industrials components Home Depot (HD), Microsoft (MSFT) and Pfizer (PFE) are helping to lead the way with solid weekly gains.
The Nasdaq edged 0.1% lower, hurt by a 2% sell-off in flash- and computer-memory giant Micron Technology (MU). The Boise, Idaho-based data storage firm on Thursday reported fine fiscal Q4 results (earnings up 75% to $3.53 a share, sales up 38% to $8.44 billion), but the stock has been facing strong selling pressure for months.
Micron Slide Deepens
A May 29 breakout past a 63.52 buy point in a cup without handle failed to bear fruit. Soon after, Micron fell 8% below that prime entry point, triggering the golden rule of investing.
The S&P 500 inched less than 0.1% higher. Strength in metal ores, consumer electronics retail, airlines, insurance brokers and gaming software stocks offset losses by generic drug, biotech, wood products, paper, steel, meat, and homebuilder issues.
See the daily performance of all 197 industry groups tracked by IBD by going to "Data Tables" within the Stock Lists section of Investors.com, then click on "Industry Group Rankings."
The best market leaders tend to come from industry groups that rank within the top 40 for six-month relative price performance, or are rising rapidly up the ranks.
Within the Dow, Home Depot broke out of a long saucer with handle at 204.35 that shows a 5% buy zone of up to 214.56. Therefore, the stock remains in buy range.
Tilray (TLRY), the British Columbia-based producer of cannabis-derived medicines and oils, slid more than 24% to 133.73 on Friday and dropped to as low as 121.51. In other words, the stock has fallen almost 60% below its peak.
How To Handle Tilray
At this point, a holder of Tilray shares with a significant gain must decide where to draw the proverbial line in the sand. The 50-day moving average cannot serve as a sell indicator since the stock has not traded that long. But on Friday, the stock appears to be getting some buying support at the short-term 10-day moving average.
As noted in the IBD Leaderboard service, a severe break of the 10-day moving average can act as a timely sell signal for stock traders.
Leaderboard charts show the 10-day line in green.
Please read this Stock Market Today column on some basic fundamentals of Tilray.
Wall Street expects the midcap firm to produce a net loss of 45 cents a share this year and a loss of 10 cents in 2019. It has a float of 75 million shares and 93 million shares outstanding.
The market has shown that profitless companies can give back all of their gains.
Snap (SNAP), down 0.18 to 9.03, had gone public at $17 a share on March 2, 2017. Shares bolted 73% in the space of two sessions to an all-time high of 29.44. It's since forfeited all of those fast gains. The so-called camera firm for social media lost 61 cents a share in 2017 and is expected lose 56 cents this year.
Strength In China Markets
Elsewhere, most China ADRs showed some oomph after the Hang Seng Index in Hong Kong rallied 1.7% in heavy volume overnight. The Hang Seng, which posted a Day 5 follow-through on Wednesday, is now up 6.6% from its recent 52-week low of 26,219 set on Sept. 12.
Inside the IBD 50, Chinese social network Momo (MOMO) traded flat and is down 2% for the week. However, shares are poised to end above the key 10-week moving average for fifth straight week. The stock is building a new base.
Momo Chart Analysis
The current base certainly shows some big sell-offs in heavy volume. That's normal when institutional investors go into profit-taking mode. But over the past month and a half, Momo has also marked three up weeks in price in above-average turnover. That's a sign that investor greed is returning.
Given that the stock still lies 14% below the cup-base left-side high of 54.24, it would not be surprising to see the stock attempt to keep building the right side of the base and perhaps etch a new handle.
Please follow Saito-Chung on Twitter at @IBD_DChung for more on growth stocks and financial markets.
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