Stocks traded higher Thursday at the market open, after President Donald Trump said he would meet with the Chinese vice premier on Friday over the pending U.S.-China tariffs. The Dow Jones today gained more than 200 points in the morning before cooling off into the close.
XAs for stocks on IBD's radar today, the FANG stock tech leader Netflix (NFLX) traded lower after Goldman cut its price target, but Netflix recovered later in the day to close at 280.48, up nearly 5%. Apple (AAPL) ticked higher, up 1.35% to 230.09 on yet another analyst upgrade. Dow Jones giant Microsoft (MSFT), Wednesday's IBD Stock of the Day, reclaimed its 50-day moving average on Wednesday, then advanced 0.62% to 139.10 on Thursday.
Finally, chipmaker Nvidia (NVDA) rose 1.28% to 183.03. The stock found support at its 50-day line several days ago and is nearing a new buy point.
Dow Jones Today Under Pressure
Above all, the Dow Jones Industrial Average, S&P 500 and Nasdaq composite all closed 0.6% higher. The Dow Jones today pushed back above its 50-day line — a positive sign — and held above through the market close. Additionally, the S&P reclaimed its 50-day line early on in the trading session. The Nasdaq failed to reclaim its 50-day line, as the uncertainty seemed to weigh the most on the tech-heavy index.
The stock market overall rallied back from its downturn earlier this week but is still under downward pressure. Volume on the Nasdaq and NYSE rose Thursday, according to early data, but appeared lower than the Oct. 2 big sell-off, when volume was well above average. For growth investors, heavy distribution makes for a more challenging market environment as it suggests institutional selling — like swimming upstream against a downstream current.
Chip Stocks As Gauge For Trade Talks
As China trade news turned from negative to positive then to neutral on Thursday, the stock market rally recouped about half of the recent week's volatile losses.
The major chip stock indexes remain an accurate gauge for the overall sentiment of the U.S.-China negotiations on trade. Semiconductor stocks appear to correlate strongly with the news around current trade talk temperament. Therefore, if investors want to keep tabs on trade talks going into Friday, observe the major chip stock indexes in addition to the broader market indexes.
Chip stocks outpaced the major indexes on Wednesday and Thursday, after selling off on Tuesday. Among the best semiconductor ETFs, the VanEck Vectors Semiconductor ETF (SMH) popped nearly 1% to 119.70 on Thursday.
Nvidia Stock
As mentioned earlier, chipmaker Nvidia bounced off support at its 50-day line last week and is nearing an aggressive buy point of 188.50.
The semiconductor stock formed a 15-week cup with handle pattern earlier this year. Recently, it started consolidating above that point. The relative strength line is at a five-month high and the stock holds a 71 Composite Rating. An RS line hitting new highs ahead of a stock is especially bullish.
On the downside, Nvidia earnings have fallen for three straight quarters.
Qorvo Stock
Additionally, chipmaker Qorvo (QRVO) bolted almost 5% higher to 76.80 after Cowen upgraded the stock to outperform. The stock bounced off its 50-day line into a buy range, and climbed back above its prior buy point at 75.94.
Skyworks Stock
Cowen also upgraded Skyworks Solutions (SWKS), which jumped more than 5% to 84.89. Skyworks is forming a base with an 88.87 buy point and an alternate entry at 84.45.
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