Up until Tuesday's sharp sell-off, tech stocks had been flashing encouraging signs of recovery from this year's bear market. And savvy investors have taken note. In the latest list of new buys by the best mutual funds, top money managers collectively invested $1.9 billion in Nasdaq, the company that operates the Nasdaq index. That beats the also-impressive $1.2 billion bet they placed on tech giant Apple.
As it sets up a potential breakout, Nasdaq stock also earned a spot on the IBD Breakout Stocks Index, which gets rebalanced each week.
But inflation fears and worries of a recession — and all the uncertainty surrounding those concerns — remain. Time will tell what impact the latest economic news and investor sentiment will have on NDAQ, AAPL stock and the general stock market indexes.
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Nasdaq Nurtures IPOs And SPACs
Headquartered in New York in the heart of Wall Street, Nasdaq is a global technology company serving the capital markets and other industries. Its diverse offering of data, analytics, software and services enables clients to optimize and execute their business vision.
With a long history of attracting young, often tech-focused companies, Nasdaq welcomed 108 IPOs in the first half of 2022. The IPOs raised $12 billion.
Nasdaq maintains its position as the leading U.S. index for health care, consumer and technology IPOs.
Nasdaq also helps companies join the public markets via SPACs, or Special Purpose Acquisition Companies. Noteworthy SPACs include Donald Trump-linked Digital World Acquisition and smart mobility leader Verra Mobility. Featured in the Breakout Stocks column on Aug. 31, Verra is testing a buy zone while DWAC stock continues to struggle.
Continuing its influence in the SPAC market, the Nasdaq welcomed 84% of all SPAC IPOs in the first six months of the year, raising $8.7 billion. A total of 31 SPAC business combinations listed during that time period.
Nasdaq earns mixed results in Stock Checkup. Sales growth has been spotty in recent quarters, leading to a "C" SMR Rating, which tracks sales growth, profit margins and return on equity.
Over the last three years, the company has generated average annual earnings growth of 19%. Analysts expect 10% growth for the current quarter and a 5% gain for the full year.
NDAQ stock earns a passing for its Accumulation/Distribution Rating, scoring an A-. That indicates strong buying by institutional investors over the trailing 13 weeks.
NDAQ Stock Flashes Positive Clue As Breakout Nears
It's a sign of rebounding technical strength when a shorter-term moving average moves back above a longer-term one. NDAQ stock just did that, with its 50-day moving average retaking its 200-day line.
While NDAQ sold off as the indexes plunged Tuesday, it managed to hold support at its 21-day line while forming a handle. Nasdaq is currently working on cup with handle showing a 64.88 buy point.
Since the start of September, NDAQ stock had been climbing nicely toward that entry. The latest inflation report put a damper on that climb, but the stock managed to rise again Wednesday.
AAPL stock and the Nasdaq composite also took a hit on the inflation news. Both are trying to regroup and begin the road to recovery.
NDAQ stock has so far held up better than both AAPL and the Nasdaq index, which have both fallen below their 50-day lines.
If the market indexes can withstand recent volatility, look for NDAQ stock to weather the current storm, complete its chart pattern and break out in heavy volume.
IBD Breakout Opportunities ETF
The IBD Breakout Opportunities ETF from Innovator Capital Management tracks the IBD Breakout Stocks Index. As with other index ETFs, this fund allows you to essentially invest in the entire index in addition to or rather than buying the individual stocks. Learn more here about the ETF and Innovator funds.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
