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S&P 500 Futures: Will Apple Pull Broadcom, Lumentum, Universal Display, Other iPhone Plays Into Buy Zones? | Stock News & Stock Market Analysis

Futures for the S&P 500 index, Nasdaq 100 and Dow industrials fell slightly Sunday afternoon. Apple (AAPL) powered above a buy point on Friday, joining several other big-cap techs clearing entry points as the Nasdaq composite and S&P 500 index hit record highs. Meanwhile, Broadcom (AVGO), Lumentum (LITE), Universal Display (OLED), Qorvo (QRVO) and Skyworks Solutions (SWKS) — all Apple iPhone suppliers or iPhone-related plays — are closing on their own buy points.

XAutoplay: On | OffApple reports earnings on Nov. 2. Lumentum, Universal Display and Qorvo also have earnings this week. In many of these cases, the Relative Strength lines have lagged somewhat over the last several weeks, reflecting their sideways action while the S&P 500 index advances to new record highs.

S&P 500 index futures fell 0.1% vs. fair value Sunday afternoon. Nasdaq 100 futures lost a fraction. So did Dow futures.

Apple

Apple shot up 3.6% to 163.05 on Friday, breaking out of shallow cup-with-handle base with a 160.97 entry. Along with a generally surging tech sector, Apple also kicked off preorders for the iPhone

X, which quickly sold out due to high demand and thin supplies.

Apple is expected to report fiscal fourth-quarter earnings per share of $1.86, up 11%, with revenue rising 9% to $51.17 billion.

Wall Street sees EPS rising 11% to $1.86 on sales of $51.17 billion in the September quarter, up 9%. But analysts and investors may be more interested in iPhone 8 demand and iPhone X supplies heading into the holiday season.

The iPhone X officially goes on sale on Nov. 3, with prices ranging from $999 to $1,149. Within hours, there will be iPhone X teardowns that reveal which companies have chips and other components in the handset, and whether or not they have a larger or smaller share than in prior iPhone models.

When Apple broke out in early August, the lack of iPhone suppliers successfully following suit was notable. Ultimately, Apple retreated below its old 156.75 buy point. While that breakout didn’t officially fail, Apple did form a new base next to the old one. So will Apple suppliers follow the iPhone maker this time?


IBD’S TAKE: Buying or holding a stock can be risky heading into an earnings report. Here’s an earnings options strategy that can help you cash in on post-earnings stock gains, while minimizing the risk from a weak quarter. IBD discussed how to use call options for Apple in the latest Earnings Preview column.


Broadcom

Broadcom is in a flat base with a buy point of 259.46. The chipmaker tried to breakout in late July and late August, but those quickly faltered. On Friday, the stock rose 3.7% to 252.87, rebounding above its 50-day moving average in strong volume.

Broadcom won’t report its latest earnings for several weeks.

Lumentum

Lumentum is a fiber-optic components maker. But it’s also a presumed supplier of 3D sensors for the Apple iPhone X. The iPhone X uses 3D sensors for a facial recognition app that unlocks screens.

The company reports fiscal first-quarter earnings before the market open on Wednesday, Nov. 1. Analysts predict an 8% per-share profit gain to 53 cents, with sales dipping 1% to $255 million. But investors may be more interested in Lumentum’s outlook and the prospects for a big rise in demand related to the Apple iPhone X, even if that’s not specifically cited.

Lumentum shares are in a cup base with a current potential buy point of 68.73. The stock spiked nearly 12% to 62.60, rebounding from its 50-day line, amid signs that Lumentum may get a big benefit from Apple.

Universal Display

Universal Display supplies OLED technology and materials. OLED screens are in the iPhone X and some other high-end smartphones from Samsung and others.

Universal Display reports after the market close on Thursday, Nov. 2. Wall Street expects EPS of 12 cents, reversing a year-earlier loss of 3 cents a share. Sales are seen rising 56% to $47.1 million in the September quarter.

Universal Display, a member of the IBD 50 index, is in a flat base-on-base with a 145.40 buy point.

The current consolidation is just above a double-bottom pattern. Universal Display cleared that 127.88 buy point in early September, moving to 145.30 in a couple of weeks. But then the stock reversed, erasing a near-14% gain and then some. When a stock wipes out a gain of 10% or more from the buy point, the breakout has failed.

Skyworks Solutions

Skyworks Solutions is an Apple iPhone chipmaker like Broadcom and Qorvo. Skyworks tried to clear a 108.65 cup-with-handle base a couple of times in September, but the stock eventually fell sharply, making that entry invalid.

Since then, Skyworks has been consolidating in a flat base, with a conventional buy point of 110.71. Aggressive investors could see 107.92 as an alternative entry. Skyworks rose as high as 108.37 on Friday, closing up 2.3% to 107.91 in above-average volume.

Skyworks will report its fiscal fourth-quarter earnings on Nov. 6. Wall Street expects a 19% gain to $1.75 a share, with sales up 17.5% to $981 million.

Qorvo

Qorvo will report earnings on Wednesday, Nov. 1, after the market close. Analysts expect a 12% EPS gain to $1.44, with revenue declining for a second straight quarter, down 6% to $811 million.

Qorvo is in a cup-with-handle base with a 76.57 buy point. The stock rose 5.4% to 73.72 last week, rebounding over its 10-week line in above-average volume.

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