Nasdaq Down; Apple Back In Buy Zone; These 5 Top Stocks Thumb Nose At Dip

Major indexes cooled again in afternoon trading Wednesday, but the week-to-date decline remains mild. Apple (AAPL), meanwhile, suffered its first gap down in price in more than four weeks, putting shares nearly back into the proper buy zone.

XAutoplay: On | OffApple, up more than 46% year to date despite losing ground for a fifth straight session, had recently bolted out of a new, very shallow cup with handle at 160.97. The 5% buy zone goes up to 169.02.

At Wednesday's intraday low, the iPhone, iMac and digital services marketer was at 168.38, 4.6% above the proper entry. But it's best to avoid buying while the stock is still trending down.

At 3 p.m. ET, the Nasdaq composite fell 0.4%, bouncing off early-morning lows. The Nasdaq had been down nearly 1% following a sell-off in East Asian equity markets. U.S. Treasury bonds rallied, sending the benchmark 10-year note's yield down around 5 basis points to 2.33%.

The S&P 500 dropped 0.4% while the Dow Jones industrial average lost 0.5%. Caterpillar (CAT), 3M (MMM) and Home Depot (HD) led the downside for the 30-stock Dow Jones industrials, each falling 2 points or more.

Truck transport, major discount chain retailing, chipmaker, cement, heavy construction, airfreight and chemical stocks paced the market's downside.

The Dow transports slipped 0.4%.

The Dow Jones industrial average is a price-weighted index, meaning that point moves, up or down, in triple-digit-priced stocks have more influence over the benchmark than, say, General Electric (GE). GE is up 1.5%, but the 26-cent gain has less impact.

Back to Apple, which also has a big influence over the Dow. The megacap tech may be falling in response to reports of some users of the new iPhone X experiencing eye pain due to the newly enhanced OLED screen. Or investors may be reacting to news that retail sales in China, a key Apple market, rose 10% in October, missing a consensus estimate of 10.5% as reported by Bloomberg.

Whatever the true reason may be, Apple continues to act like a big-cap leader should.

In addition to continuing a string of higher highs and higher lows, Apple is still trading on the north side of both its 50- and 200-day moving averages. Plus, both of those averages continue to rise.

Apple's Relative Price Strength Rating (see it, track it at IBD Stock Checkup or on an IBD daily chart) is now a solid 86, meaning that over the past 12 months, it's outperformed 86% of all companies in IBD's database.

Apple also leads the Telecom-Consumer Products group with a 93 Composite Rating in IBD Stock Checkup.

Meanwhile, Inogen (INGN) may represent one of a new batch of emerging stock market leaders. The respiratory care products expert is hardly budging after gapping out of a seven-week flat base at 105.45 last week. The breakaway gap followed a strong third-quarter report (adjusted earnings up 32% to 33 cents a share, revenue up 27% to $69 million).

Goleta, Calif.-based Inogen, a small cap at $2.5 billion in market value, is also up more than 70% past a 69.45 entry in a superb eight-week flat base. Inogen cleared that base in late February.

Four more stocks that are showing strength after breaking out are Applied Materials (AMAT), which reports quarterly results Thursday; Sector Leader MKS Instruments (MKSI), which cleared a new cup with handle at 86.70 in September; Nvidia (NVDA), which on Tuesday returned to Sector Leaders; and variety retailer Five Below (FIVE), which cleared a four-month cup without a handle at 54.23 in late September.

Applied is part of IBD Big Cap 20, currently ranked No. 3 on that list.

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