Apple Falls Below Buy Point; These 2 Chip Stocks Soar On Earnings: S&P 500 Futures - http://earlyretireonline.com | how to earn money fastJanuary 25, 2018 12:18 am
Categorised in: Breaking Financial News
Futures for the S&P 500 and Nasdaq 100 were little changed early Thursday morning after the Nasdaq composite slumped Wednesday on Apple ( AAPL ) and weakness in chips fueled by Texas Instruments ( TXN ).
Late Wednesday, chip-equipment giant Lam Research ( LRCX ) and chipmaker Xilinx ( XLNX ) reported blowout earnings and bullish guidance, sending the stocks near or into buy zones overnight. But chip-gear maker Teradyne ( TER ) tumbled on guidance that fell short of estimates.
[ibd-display-video id=3037819 width=50 float=left autostart=true] S&P 500 index futures were essentially flat vs. fair value. Nasdaq 100 futures rose a fraction. Dow futures were up 0.1%.
Apple shares fell 1.6% to 174.22 in Wednesday’s stock market trading , dropping back below a 175.34 flat-base buy point. The stock did find support at its 50-day moving average, as it has since the last days of 2017. But volume was the highest since Nov. 3 and was the heaviest trade in a down session since September.
Meanwhile, the relative strength line , which tracks a stock’s performance vs. the S&P 500 index, fell yet again. (The RS line is the blue line in the charts below.) Already at consolidation lows, Apple’s RS line is now approaching longer-term levels. Apple’s stock hasn’t made much headway vs. the S&P 500 for several months.
A growing number of Apple analysts are warning of weak iPhone demand . Perhaps the bad news is being priced, or overpriced, into the stock ahead of earnings next week.
Lam Research earned $4.34 a share in its fiscal second quarter excluding various items including a tax-related charge, up 94% vs. a year earlier and well above views for $3.69 according to Zacks Investment Research. Revenue rose 37% to $2.58 billion, just above analyst forecasts for $2.57 billion.
For fiscal Q3 ending in April, Lam Research expects EPS of $4.20-$4.50 and revenue of $2.73 billion to $2.98 billion. Wall Street was looking for EPS of $3.81 and revenue of $2.66 billion.
Lam Research shares rose 3.7% to 217.50 in late trading after closing down 2.5% to 209.73. The stock had rallied in the prior six sessions.
Lam’s after-hours action suggests the stock could test its 219.80 cup-base buy point . Lam’s RS line remains off its highs near the left side of the consolidation. But the RS line has made some progress, clearing some short-term highs.
Lam’s results follow strong earnings and a bullish outlook from ASML Holding (ASML) last week, as well as strong preliminary revenue figures and sales guidance from Ichor Holdings (ICHR) and Electro Scientific (ESIO).
KLA-Tencor (KLAC), which is at the edge of a buy zone, reports earnings Thursday.
Xilinx earned 76 cents a share excluding various items and a tax-related charge, up 46% vs. a year earlier. That was the best gain in four years and easily beat fiscal third-quarter views for 63 cents. Revenue rose 8% to $631.2 million vs. views for $630 million. That’s just OK, but is the best top-line growth in five quarters.
For the current quarter, Xilinx sees revenue of $635 million to $665 million. That $650 million midpoint is above Wall Street forecasts and would be a 6.7% yearly gain.
Xilinx rose 5.2% to 77.30 in late trade, suggesting a move back above a 75.24 buy point. Xilinx fell out of buy range during the regular session, losing 2.7% to 73.48.
The RS line is definitely a concern. It’s well below the consolidation’s high and hasn’t made headway for the past year. A powerful price move Thursday could push the RS line over short-term levels.
Teradyne earned 46 cents a share in its fourth quarter on sales of $479 million vs. views for 34 cents and $438 million, respectively. The chip-equipment maker also hiked its quarterly dividend by 29% to 9 cents a share.
But Teradyne gave EPS and revenue guidance that, at the midpoint, is below the consensus.
Teradyne shares fell 5.7% to 44.99 in late trading. The stock had closed down 3.4% to 46.79, moving back into buy range from a 44.72 entry. Extended trading doesn’t always carry over to the next regular session, but Teradyne looks set to test its buy point.
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