S&P 500 Index Nasdaq Are Trading At Highs But Big Winners Lacking As Apple Tesla Falter

The S&P 500 index, Nasdaq composite and Dow industrials are all near record highs. So where are the big winners? Apple (AAPL) and Tesla (TSLA) sold off last week to drop below recent buy points, with Apple undercutting its 50-day moving average as well. Nvidia (NVDA) got off to a strong start, but has pared much of its gains. Meanwhile, many "breakouts" are like Alibaba (BABA), creeping into buy zones but just stalling. All of that suggests that the risk-reward for investors isn't great.

XAutoplay: On | OffFutures for the S&P 500 index, Nasdaq 100 and Dow industrials were not yet active Sunday.

75 Breakouts

Using pattern recognition via IBD's Marketsmith, there have been 75 recent breakouts of stocks trading at least $15 million worth of shares a day, with current Composite Ratings of 90 or better. That doesn't include every breakout: Apple's Composite Rating was above 90 until its recent sell-off. Tesla now has a 77 CR, though that's in part due to a lack of profits. Citigroup (C) and JPMorgan Chase (JPM) have decent but not great fundamental and technical readings. But still, this is a fairly large list to study.

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Winnebago Is Hot

Of those 75 recent breakouts, just 14 are more than 5% past the entry point, making them extended. Most are just out of range. The biggest winner is RV and towables maker Winnebago (WGO), with a 13.7% advance. There are several auto parts firms in the mix. A few chip gear makers are the only tech representatives.

The Alibaba Stall

Meanwhile, dozens are like Alibaba, SAP (SAP), Square (SQ), Amgen (AMGN) — nudging out to buy zones, stalling out and sometimes briefly undercutting their entry areas. Some of these breakouts have come in light or lackluster volume, suggesting a lack of institutional support. Unless you bought right at or just above buy point, there's good chance you're down.

Boeing Taking Off?

Boeing (BA) and chipmaker Texas Instruments (TXN) are Sept. 15 breakouts that have advanced to near the high end of their 5% buy zones. Maybe Boeing and TI are on their way to be big gains.

Nvidia Pulls Back

On the other hand, some stocks such as Nvidia and Universal Display (OLED), have made big initial moves but then pulled back.

Nvidia broke out on Sept. 15. In the next session, the graphics and AI chipmaker rose as high as 9.5% above the buy point. But shares have fallen for the past four days, and are now just 2.5% over the entry.

Universal Display, a maker of parts and tech for OLED screens as those next-generation displays are being used in high-end TVs, Samsung handsets and the upcoming Apple iPhone X, was 13.6% above its double-bottom entry Tuesday intraday. But thanks to three days of selling, Universal Display is now just 3.8% over the buy point. You don't want to see a 10%-plus winner roundtrip to the buy point.

Failed Breakouts

Meanwhile, 17 of the 75 recent breakouts are below their buy points now. Some are just below their entries. But Proofpoint (PFPT), MGM Resorts (MGM) and Apple iPhone chipmaker Skyworks (SWKS) fell so far that those buy points are now invalid.

Because of the current 90+ Composite Rating screen, the number of underwater or failed breakouts may be higher. Apple and Tesla are definitely below their buy points but technically not quite failed breakouts, though Apple's above-average volume tumble through its 10-week line gave an additional reason for investors to cut losses. Oracle (ORCL), with its heavy-volume plunge below its buy point and 50-day line after issuing weak guidance, is a failed breakout.

If the market picks up, with even a modest uptrend, you might see stocks that are hovering at or above buy points take off. On the other hand, a market slide, even modest, would likely push many more breakouts underwater.

Investors need to recognize the current landscape, despite the market direction being "confirmed uptrend." There are stocks that are working, but big winners are scarce. Pay close attention to your portfolio as well as the major averages and leading stocks.

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