Investors, emboldened by fresh signs the Federal Reserve is not severely hawkish in its views toward raising short-term interest rates this year, continued to accumulate stocks on Wednesday following a key follow-through that took place on Valentine's Day, a week ago.
X The Nasdaq composite led the way, rising 1.3% despite giving back some gains with an hour to go in the session. The Nasdaq 100 gained 1.2% as FAANG stock
The S&P 500 and the Dow Jones industrial average pared gains to 0.4%. Volume was sharply lower ahead of the 2 p.m. ET announcement of the Federal Reserve's minutes from its January meeting on interest rates.
But now, volume appears to be picking up. Watch to see if turnover actually rises on either the Nasdaq or the Big Board vs. Tuesday's session. A fine gain by major indexes in higher turnover vs. the prior session points to accumulation, which is the right environment for stock investors going long.
IBD noted the potential change in the general market direction on Feb. 14 via The Big Picture column. On that day, both the Nasdaq and the S&P 500 rose sharply enough in higher turnover to warrant a confirmation signal that mutual funds, hedge funds, banks, pensions, college endowments and the like were actively scooping up equities.
Arista Networks (ANET) is trying to halt a sell-off that began after the data center equipment leader posted strong Q4 results (EPS up 64%, revenue up 43% to $467.9 million) late Thursday. The stock dropped 3% in massive turnover, following last week's wicked slide, and is falling further below the 50-day moving average.
Arista has now given back all of the gains from a Jan. 8 breakout from an odd-shaped cup with a 245.75 entry, a clear sell signal.
A further slide to the 200-day moving average would amount to a correction of more than 35%.
Investors frowned on what was seen as a light revenue outlook for the current full year. Concerns over the long-term cost of a technology patent infringement battle with the industry's 800 pound gorilla,
Cisco Systems (CSCO), also remain high.
The internet content group, which includes Alphabet, is a leader among the 197 industry groups tracked by IBD. (See the entire rankings by six-month price performance here or by going to "Stock Lists" at Investors.com, then click on IBD Data Tables.)
Within that group, at least 12 companies show an excellent Composite Rating of 98 or higher on IBD Stock Checkup. They include China's
Baidu.com (BIDU), social media and music site
YY Inc. (YY),
Twitter (TWTR) and food ordering app
Grubhub, a member of IBD's Sector Leaders, the most stringent screen for growth stocks on Investors.com, has rallied 72% since it cleared a six-week flat base with a 57.71 buy point on Oct. 25. On that day, the Chicago-based firm announced solid third-quarter results (EPS up 22% to 28 cents a share, revenue up 32% to a record $163 million). Since then, growth has accelerated.
Small caps also thrived, with the Russell 2000 up nearly 1.1%. Utilities continued to lag. The Dow Jones utility average was down 0.5%.
Chef's Warehouse (CHEF) blasted out of a choppy base at 22, rising more than 12% to 22.85 in heavy trading. The distributor of specialty foods and staples to the restaurant industry has a market cap of $650 million and a float of 22 million shares. The 5% buy zone goes up to 23.10.
The yield on the benchmark U.S. Treasury 10-year bond stood at 2.9%.
Source : https://www.investors.com/market-trend/stock-market-today/stocks-up-fang-leaders-solid-time-to-sell-arista-networks/