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Nasdaq Leads Gains, Outruns Dow Jones; Why This Tech Stock Hit A New Buy Point

Large and midsize tech stocks helped the Nasdaq composite ratchet its December gains further as the tech-heavy index rose 0.8%, hit new all-time highs and closed above 9000 for the first time. Most of the FAANG plays rallied 1% or more. The Dow Jones Industrial Average lagged in stocks today, but still advanced almost 0.4% at the close. Seven of the Dow industrials' 30 blue-chip components marched 1 point higher or more.

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Among those Dow Jones leaders, JPMorgan Chase (JPM) continued its impressive climb since it retook a 117.34 proper buy point in a six-week cup without handle base that formed in the summer. On Oct. 15, the day that IBD's Big Picture column changed the outlook for growth stocks back to a "market in confirmed uptrend," JPM rallied fiercely and surpassed that 117.34 entry in heavy turnover on solid Q3 results.

Since then, JPMorgan stock has climbed as much as 18%. It has grabbed a spot in the IBD 50 for months.

While the Nasdaq composite was hitting a new high, the Nasdaq 100-tracking Invesco QQQ Trust (QQQ) gained almost 0.9% and also marked an all-time high. At the day's high of 213.81, QQQ had leapt more than 4% in December alone. It's also pushed ahead 13% for the quarter.

The Russell 2000 lagged with a micro loss.


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Meanwhile, Nasdaq-listed Universal Display (OLED) broke out of a solid cup with handle. Shares in the leader in organic LEDs catapulted more than 6% higher and surpassed a 208.11 proper buy point. Volume zoomed nearly triple its 50-day moving average turnover of 468,000 shares per day.

IBD Live has been discussing the chart pattern formed by OLED for the past few weeks, ahead of its breakout.

The 5% buy zone goes up to 218.52. Shares on Thursday reached as high as 216.65.

According to IBD Stock Checkup, Universal scores a 97 Composite Rating on a scale of 1 (scrawny) to 99 (super strong). The IBD Composite Rating measures key traits in fundamentals (such as earnings per share and sales increases), relative stock price strength and the quality and growth of institutional ownership. Universal's 97 Composite also ranks No. 1 within the miscellaneous electronics products industry group.

The midcap growth stock shows a market value of $10.2 billion and 47 million shares outstanding.

Further growth in market value would give OLED stock a chance to make the IBD Big Cap 20. This reliable list of potential long-term large cap winners focuses on companies with a market value exceeding $12 billion. But many have a market cap well north of $20 billion.

The Street sees Universal's earnings vaulting 85% vs. a year ago to 74 cents a share in the fourth quarter on sales growth of 47% to $103 million.


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Meanwhile, Innovator IBD 50 (FFTY) ETF at one point rose as much as 0.4% before easing some. It too has had a stunning fourth quarter.

At 35.09, the growth stock-focused exchange traded fund has ramped up 8.7% since Oct. 1.

See the full IBD 50 stock list here.

Beyond Dow Jones, Nasdaq

The S&P 500 rose 0.5% in Thursday's full-day session. Tuesday's trading ended at 1 p.m. ET ahead of Wednesday's Christmas holiday. On IBD Live, Dynatrace (DT) also got discussed.

The new IPO is crafting a handle on its first-stage cup. Shares coasted more than 4% higher, getting closer to a 27.29 breakout point.

Watch to see if that handle extends over time; that would result in the formation of a base next to its cup pattern.

The stock's relative strength line is rising, but still is a ways from hitting new high ground. That's OK for now, since a breakout has yet to happen.

Dynatrace, whose technology and services help businesses improve their IT operations to improve outcomes, grabs a spot in IBD's IPO Leaders screen. See the full IPO Stock Leaders list here. the stock trades on average 1.2 million shares a day. Revenue increased 8% to $431 million in the fiscal year ended in March, but Dynatrace lost 11 cents a share.

Analysts expect a profit turnaround with earnings of 24 cents in FY 2020 (ending in March that year) and 31 cents in FY 2021, up 29%.

Leaderboard Stock Moves Past Buy Point

ServiceNow (NOW) stood out among nine companies on the Leaders Near A Buy Point list. The stock is moving past a new buy point at 284.40, 10 cents above the handle's high on the current base.

The giant in digitizing work flows in large corporations has formed a new base that contains elements of a double bottom.

See the chart annotations and other pertinent fundamental and fund sponsorship on ServiceNow here.

On the downside, Peloton Interactive (PTON) got run over by heavy institutional sellers.

The stock fell 6% for a fourth straight decline and tripped below its newly formed 50-day moving average in heavy volume. At 27, shares are now below an initial breakout point at 28.08. Analysts surveyed by Refinitiv see a net loss of $1.28 a share in fiscal 2020, which ends in June.

Please follow Chung on Twitter at @SaitoChung and @IBD_DChung for more on growth stocks, buy points, sell rules, breakouts, chart analysis and stock market insight.

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