Leading stocks such as Amazon.com continued to flex their strength amid a mildly positive start in the market Wednesday. The e-commerce and online video giant added another 1% to 824 following Tuesday's 2% surge, and volume is already moving at five times its 50-day average levels.
Amazon (AMZN), which was added to Leaderboard on March 29, when it closed near 593, has staged solid gains since breaking past a multiple number of entry points, the most recent of which was a second test of its rising 50-day moving average near 760.
The S&P 500, Dow Jones industrials and the Nasdaq composite also showed slight gains in the 0.1% to 0.2% range in the stock market today. The Nasdaq outperformed on Tuesday with its 0.9% advance, recouping virtually all of Monday's losses.
Small caps gained a bit more ground early Wednesday; the Russell 2000 rose 0.3%. Crude oil futures rebounded more than 1.5% and back past the $45-a-barrel level, but natural gas sank.
As annotated on a Leaderboard daily chart, Amazon first broke out on April 13 by surpassing a 603.34 handle entry. A second handle formed as the stock fell mildly from April 19 to April 28, presenting another potential buy point at 638.11. Then on April 29, Amazon shares gapped up hard, rising more than 9% on the back of strong earnings and sales (up 28%, the biggest jump in four years) in the first quarter.
Amazon has now gained nearly 37% from the first handle pivot point of 603.34.
The Street sees Amazon's Q3 earnings vaulting 365% to 79 cents a share; in Q1, earnings were 1.07 a share vs. a net loss in the year-ago quarter, and Q2 profit soared 837% to $1.78 a share.
Paychex (PAYX) fell more than 4% to 57.65 in heavy trading, sinking further below its 50-day moving average. The payroll processing expert's August-ended fiscal Q1 earnings rose just 3% on a 9% lift in revenue, reflecting the smallest EPS gain in 16 quarters.
Paychex first sliced through the 50-day moving average in heavy trading on Sept. 9, a warning sign that institutions were eager to take profits. A rebound later in the month failed to keep the stock above the key support line for long.
A majority of the Dow 30 stocks gained mildly, but Nike (NKE) dropped more than 1% to 54.51 on the back of light guidance on future orders. Management also said it would end the practice of providing such concrete guidance on future orders in light of its evolving product flows and business models. On the bright side, Nike's earnings of 73 cents a share, while up just 9% vs. a year ago, pounded the Street's consensus estimate of 56 cents.
Evidence of the stock's strength can be seen in how it ran past recent buy points without seemingly breaking a sweat. The first pivot point was 85.10, which Alibaba crossed rather diffidently on Aug. 9. But the breakout then went into full bloom the next three sessions as shares catapulted a combined 15% in heavy trade. It then formed another handle, easing lightly in price in quiet volume, ushering a new buy point at 98.96 — a dime above the handle's intraday high of 98.86 on Aug. 15.
On the downside, restaurant chains continue to struggle amid concerns over fast-rising labor costs and dining spending patterns, influenced in part by new options such as on-demand prepared and unprepared food delivery services.
Dave & Buster's (PLAY) is getting squashed with a third 1%-plus decline in a row, losing more than 3% to 38.30. In the process, the restaurant-cum-arcade chain lost support both at the 200-day moving average and at the 40 price level. The RS Rating has weakened to a 16 out of a maximum 99.
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