Futures for the Dow Jones industrial average, S&P 500 index and Nasdaq 100 rose modestly late Monday after tech titans such as Apple (AAPL), Facebook (FB) and Netflix (NFLX) sold off for a second straight session. But despite the big shift, three very highly rated techs stocks, Proofpoint (PFPT), NetEase (NTES) and YY (YY), are in buy range right now.
Nasdaq 100 futures rose 0.25% above fair value, while Dow and S&P 500 future climbed 0.15%.
XAutoplay: On | Off During Monday’s session, the Nasdaq composite fell hard again intraday, though it did close well off lows. The Dow industrials and S&P 500 suffered slim losses. Apple, a member of all three major indexes, slid 2.5% after losing 3.9% on Monday. Apple, closed below its 50-day moving average for the first time in six months. Facebook and Netflix also settled below that key support line. Amazon.com (AMZN) and Google parent Alphabet (GOOGL), the other two members of the FANG internet giants, did close well above that area after intraday tests.
A week ago, the Nasdaq was 5% above its 50-day line, an area that has signaled at least short-term pauses in the strong uptrend over the past year.
Cybersecurity firm Proofpoint and Chinese internet plays NetEase and YY are all currently in buy range. They also all have Composite Ratings of 95 or above, which means they outperform at least 95% of stocks based on a variety of fundamental and technical factors. All-time stock winners often have 95+ Composite Ratings near the beginning of big price gains.
The market uptrend is under pressure, so investors should be cautious about making purchases.
Proofpoint, which has a 97 CR, cleared an 84.46 buy point last month. Last week, shares moved more than 5% beyond that entry, meaning they were extended. Shares tumbled 5.25% on Friday, bringing Proofpoint back into buy range, though the high-volume retreat should have given investors pause. On Monday, shares fell again, dropping intraday below the buy point, but closing down just 0.2% at 87.91.
NetEase is a leading Chinese mobile gaming portal. In addition to its own homegrown games, NetEase licenses games such as “World of Warcraft” from Activision Blizzard (ATVI).
(Video gaming will be in focus at the Electronic Entertainment Expo 2017, which kicks off in Los Angeles on Tuesday. IBD will have extensive coverage at E3, including live video broadcasts.)
NetEase shares broke out of a cup-with-handle base with a 301.92 buy point on June 6, then extended gains the next day. On Friday, shares fell 3.2% to 303.62, still in buy range after undercutting the entry point intraday. On Monday, shares again fell below the buy area, but finished up 0.9% at 306.39.
NetEase has had strong growth and boasts a best-possible 99 Composite Rating. But the stock is a late-stage breakout, which is less likely to succeed. So investors should be wary of that.
YY, like NetEase, has a best-possible 99 CR. Its social-networking platform provides live online broadcasting, where users take part in group activities via voice, video and text.
YY cleared a cup-with-handle base with a 56.31 buy point on May 23. In early June, YY was trading slightly above the 5% chase zone. But shares have pulled back relatively modestly in the past three sessions, closing Monday at 57.68.
YY was recently profiled in IBD’s New America section.
Japan’s Nikkei fell 0.1% in Tuesday intraday trading and China’s Shanghai composite lost 0.25%. Hong Kong’s Hang Seng advanced 0.2% while Australia’s S&P/ASX 200 gained 0.6%.