The trouble that had been brewing in the market indexes in July has started to boil in August. Across a wide range of industries, IBD Leaderboard stocks like Nvidia, ServiceNow, PulteGroup and Agnico-Eagle Mines continue to navigate the turbulence — with varying degrees of success.
After a magnificent run leading to an all-time high in June, Nvidia stock has now lost two key lines of support, revealing the eight "secrets" of selling with a focus on No. 2. And as the artificial intelligence juggernaut runs into trouble, fellow leaders like ServiceNow, Pulte and Agnico-Eagle Mines have taken hits but remain above crucial levels of support.
In such market conditions, risk management is of prime importance. Regularly monitoring IBD's recommended market exposure level provides one key tool to help protect your portfolio. Following sharp declines in the Nasdaq and S&P 500 in recent days, the recommended level has gradually dropped from the highest-possible 80%-100% in July to the lowest 0% -20% on Monday.
Nvidia Joins Search for Support At These Key Points
Well before reports of an AI chip delay came out on Monday, Nvidia had lost support at two key moving averages: the 50-day line and the 21-day exponential moving average. But looking to prove its resilience, the still-troubled stock has bounced back above the 97.40 buy point it cleared back in May. A declining slumping relative strength line shows how Nvidia continues to underperform the general market.
At the same time, the tech-heavy Nasdaq fell nearly 4% Monday, once again in above-average volume. One silver lining is how the index found support at its 200-day line as it tries to regain its footing.
Meanwhile, Agnico-Eagle Mines shows it has the strength to dig out of a hole. Shares of Agnico-Eagle stock bounced off the 50-day line Monday, propelling it back above the 71.50 entry it cleared last month. PulteGroup showed similar resilience to retake its 21-day line and move back above its prior entry.
While still below the buy point ServiceNow shot past on earnings, the AI-driven enterprise software stock has found support at its 50-day line on the way to retaking its 21-day line.
Showcasing healthy action in a sickly market, long-term medical care provider Ensign remains extended despite taking some lumps. Already over 7% above its 50-day benchmark, Ensign managed to close above its 21-day line on Monday.
So as waves of volatility shake up Wall Street, investors should keep an eye on action in and around these key moving averages in indexes, as well as in Nvidia, ServiceNow and other leaders.
Risk Management — One Of The 4 Pillars Of The IBD Methodology
Keep An Eye On Watchlist As Market Vies With Volatility
As Nvidia, ServiceNow, Pulte and other IBD Leaderboard names navigate the current storm clouds, continue to monitor stocks on the Leaderboard watchlist.
Current names include India-based travel firm MakeMyTrip and cybersecurity stock CyberArk Software. IBD 50 stock Sarepta Therapeutics also makes the list.
The watchlist also houses two exchange-traded funds: SPDR S&P Homebuilders and SPDR S&P Insurance. Both ETFs have held strong above their 50-day moving averages.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
