The stock market traded mildly higher amid a relatively quiet day of news on Tuesday. Perhaps the most interesting feature of the day's market action: Small caps took the reins amid a roughly 0.4% lift by the Nasdaq composite. Meanwhile, growth stocks in the IBD 50 and other key Investors.com stock lists continued to reward astute traders looking for breakouts.
Beating The Nasdaq
The Russell 2000 dominated the upside with a 2.7% gain. Midcap stocks nearly mirrored the bullish action, with SPDR S&P Mid Cap 400 rising almost 2.1%.
At 1855, the small-cap Russell index is recouping even more losses caused by the downfall of regional banks SVB Financial and Signature Bank of New York in March. However, its year-to-date performance continues to lag.
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The Russell 2000 finished Tuesday with a 5.3% gain year to date, vs. advances of 26.8% by the Nasdaq composite and 11.6% by the S&P 500.
On March 9, the Russell swan-dived below its 50-day moving average, a critical technical level.
Indeed, banks thrived on Tuesday, as SPDR S&P Regional Banking ETF leapt 4.9%, its fourth largest single-session gain in the current quarter. KRE continued to make headway above its 50-day line, which is trying to flatten out.
Notice on a daily chart how the Russell 2000 index's 50-day line is now tilting a bit higher, a promising sign. (Note: the Russell 2000 chart updates once per day on Investors.com and MarketSmith; please use IWM for intraday action.)
Meanwhile, the large-cap S&P 500 lagged with a gain of around 0.2%. The Dow Jones Industrial Average traded slightly lower. Volume was running sharply higher vs. the same time on Monday.
The yield on the key U.S. Treasury 10-year bond edged up less than 1 basis point to 3.69%.
The last time the Russell 2000 gained more than 2.5% and the Dow finished lower was Oct. 10, 2008, according to Dow Jones Market Data. It's on track to be only the third such occurrence since the inception of the Russell 2000.
Elsewhere, the IBD 50 hosted no fewer than 14 issues that climbed 3% or more for the day.
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IBD 50 Leader
The IBD 50's top dog on Tuesday: Fluence Energy, which is getting further past a cup with handle and the proper entry point just above 24.77.
Notice on the weekly chart how Fluence also saw its relative strength line vault into new high ground since the base began forming near 26 in early February.
The base has a lot of wide weekly swings, however, so beware of potential sharp pullbacks. Fluence Energy got some airplay in Tuesday's IBD Live show.
The midcap growth stock has a market value of $4.7 billion and 176 million shares outstanding. Over the past three fiscal reporting years through September 2022, Fluence piled a cumulative net loss of $3.12 a share. In FY 2023, analysts expect the provider of energy storage products and services to lose 64 cents a share, then turn a profit of 11 cents in FY 2024.
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Sales fell 14% vs. a year earlier in the June-ended fiscal third quarter last year to $239 million. But since then, the top line has roared higher, up 135%, 78% and 104% in the three most recent quarters through March.
According to MarketSmith, 283 mutual funds owned shares in Fluence Energy as of the end of the first quarter, up from 254 in the year-ago period. Top-rated funds owning a piece of the stock include ClearBridge Value Trust (LGVAX).
Fluence management owns 1% of the company.
On June 1, Fluence announced that it sealed contracts to supply its Nispera asset performance management software to seven solar power plants under the management of MPC Energy Solutions in El Salvador, Colombia and Mexico. The deal represents the company's entrance into the former two markets and business expansion in the latter.
Outside the Nasdaq: IOT Rockets
Samsara, which is now extended past a breakout point at 22.59, gushed higher in heavy volume for a third straight session. Shares rose as much as 6.7% and entered the 20% profit zone from its buy point.
A new holder could consider holding the stock a minimum eight weeks and see if the specialist in harnessing data from the IoT (Internet of Things) realm and related markets can extend its gains.
Samsara has yet to turn a profit. But the Street sees a profit of 3 cents a share in fiscal 2025, ending in January that year. Net losses continue to shrink as the top line expands.
Sales grew 52%, 49%, 48% and 43% vs. year-ago levels in the past four quarters.
According to IBD Stock Checkup, Samsara gets a seriously good 96 Composite Rating on a scale of 1 to 99. The Composite rating combines key fundamental, technical and institutional ownership metrics into a single easy-to-use number.
Use the Composite Rating as a screening tool, not for timing your buys and sells.
Breakout In This Nasdaq Stock
Monday.com remains in the 5% buy zone after clearing a cup base at 171.89. Shares rose 1.4% to 179.31 in dull turnover on Tuesday and briefly notched a 52-week high.
The cup-like pattern also featured the contours of a double bottom base, another bullish chart pattern found among many of the greatest stock market winners, per decades of IBD research. This pattern yielded a lower buy point above 145.46.
As the daily chart shows, MNDY had two key sell-offs in February to March and in April to early May. These declines produced a pair of lows at 126.05 and 108.34.
The middle peak of 145.46 in between the two lows produced a new buy point. Monday.com raced past this new entry on strong first-quarter results issued on May 15. The bottom line jumped from a net loss of 96 cents a share a year earlier to a profit of 14 cents a share.
The cloud-based platform helps workers more efficiently operate across multiple software applications. It hosts an 81 Earnings Per Share Rating that cloaks strong earnings in the past three quarters.
Sales have exceeded $600 million on a trailing 12-month basis and jumped 75%, 65%, 57% and 50% in the past four quarters.
Monday.com's Composite Rating is also excellent at 98, according to IBD Stock Checkup. The midcap stock has a market value of $8.6 billion, 47.9 million shares outstanding and a float of 22 million.
Keep in mind this significant gap between the float of freely traded shares and the total shares outstanding. According to MarketSmith, management owns 22% of the company, or roughly 10.5 million shares. The stock debuted on the Nasdaq in June 2021 at $155 a share.
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Kinsale Capital is actionable as it clears a 345.75 buy point in a five-week base that carries the elements of a flat base. The stock rose 2.9% as volume jumped above average on an up day for the fourth straight session.
The specialty property and casualty insurer traded on average 142,000 shares a day. On Tuesday, more than 204,000 shares exchanged hands, or 43% above its 50-day average.
Outside the Nasdaq, Copa is now extended. Shares in the Panama-based airline rolled 2.7% higher and are exiting the 5% buy zone from a breakout at 98.11. Watch for a potential pullback into the proper buy zone.
Meanwhile, NYSE-listed tech stock Dynatrace briefly reentered the 5% buy range after recently jetting past a 48 buy point in a three-month-plus cup without handle. It is now extended.
From 48, the 5% buy zone goes up to 50.40. The expert in automation of IT operations fell briefly near 50 but cut its losses to less than 0.3%. Volume ran 27% above average.
Please follow Chung on Twitter: @saitochung and @IBD_DChung
