S&P 500 Futures: Alibaba Is Back In A Buy Zone, How Close Is Apple? | Stock News & Stock Market Analysis

With the S&P 500 index, Nasdaq composite and Dow industrials setting new highs again in a choppy market, several stocks that struggled with breakouts are back in buy zones. Chinese e-commerce giant Alibaba (BABA) retook an entry point Tuesday. Meanwhile, Apple (AAPL) is trying to find its footing, though its chart isn’t so simple. As for Apple’s fellow Dow techs, Microsoft (MSFT) keeps bouncing around a buy point, Intel (INTC) continues to rally and Cisco Systems (CSCO) sets up just below a possible entry.

XAutoplay: On | OffFutures for the S&P 500 index, Nasdaq 100 and Dow industrials fell slightly vs. fair value late Tuesday.

Alibaba

The Chinese internet giant on Sept. 13 cleared a 177.10 buy point from a rare ascending base. Over the next several sessions Alibaba hovered just above or below that entry. Then shares tumbled nearly 5% on Sept. 25 as many big-cap techs sold off hard. After sinking the following day, Alibaba had sunk 5.8% below the buy point. It would have been understandable for investors to get losses. But the breakout wasn’t an outright failure, and Alibaba appeared to find support near its 10-week line.

Over the next few sessions, Alibaba crept higher. On Tuesday, Alibaba rose 2.85% to 178.56, back above the 177.10 entry. Volume was weak.


IBD’S TAKE: If the market pulls back after its recent run, Alibaba and other stocks just above entry points could easily slip back down. That latest Big Picture lays out the case for taking a defensive posture despite the major averages hitting all-time highs. The Big Picture and other subscriber-only features are open through Oct. 8.


Apple

Apple shares cleared a 156.75 flat-base buy point on Aug. 2, following stronger-than-expected earnings. Shares largely held above that level for the next several weeks. But Apple then fell below that key level and the 50-day moving average on Sept. 20 amid concerns about sluggish iPhone 8 demand and iPhone X production issues. Apple continued to fall for the next four sessions, with all five declines in above-average volume. At its low point, Apple was nearly 5% below the old entry point.

Since then, Apple has trended slightly higher, rising 0.4% to 154.48 on Tuesday. But Apple’s old buy point was first cleared two months ago. Investors may want to wait for an emerging base to form — Apple has been consolidating for more than four weeks now. Alternatively, if Apple blasts above its 50-day moving average in strong volume, that would provide a buying opportunity. Apple’s 50-day line is less than 1 point above the old 156.65 entry.

Microsoft

Microsoft dipped 0.5% to 74.26 on Tuesday, ticking below its 74.52 buy point a day after retaking it. Microsoft snapped a five-day rebound from around the 50-day line, though all of those gains were in light volume. Microsoft has generally been slightly outpacing the S&P 500 for the past year or so, but in a gradual fashion. Microsoft will break out, often in light volume, then meander above or below the buy point, before setting up again in a new consolidation that’s modestly above the prior one.

Microsoft’s fortunes have been revitalized by its cloud-computing push, where it’s becoming a serious rival in some areas to Amazon and its Amazon Web Services unit.

Intel

Intel cleared a 38.55 buy point on Monday from a flat base going back to late January, moving in strong volume. The chip giant, then rose 0.9% to 39.38 on Tuesday, hitting its highest level since late 2000. Because Intel has been going sideways for so many months, the stock has been a market laggard until very recently.

Intel has gotten a recent boost from reports that Tesla (TSLA) will use its chips for its “infotainment” systems, replacing Nvidia (NVDA). Intel, helped by its Mobileye acquisition, is heavily involved in several autonomous driving efforts and alliances. Intel also has some chips in recent Apple iPhones.

Cisco Systems

Cisco has been struggling to shift from its declining legacy hardware business of routers and switches to services and software, including cybersecurity. But actual growth has been hard to come by, and the stock’s Relative Strength line has generally been lagging for the past eight years.

But Cisco is working on the right side of a shallow cup base going back nearly five months. Shares rose 0.3% to 33.85 on Tuesday. Cisco now has a handle, giving it a 34.20 buy point, slightly lower than the prior potential entry of 34.70, just above the recent high.

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