The Dow Jones Industrial Average held steady, pulling off mild intraday lows to edge up 0.2% at around 2 p.m. in New York. Megacap techs bludgeoned the Nasdaq, sending the composite index down roughly 0.7% in mid-afternoon trading. The current stock market also showed ongoing strength in oil and gas, and financial plays.
IBD's current outlook remains the market in a confirmed uptrend.
The S&P 500 fell mildly, down less than 0.2.%. Small caps cooled off more but also trimmed early-morning losses. The iShares Russell 2000 ETF fell less than 0.8%.
Innovator IBD 50 slipped 1.7%. But the growth stock-centered exchange traded fund still holds a 16.9% gain year to date.
The S&P 500, lagging top growth stocks with a 4.5% advance since Jan. 1, still holds a nice cushion above the 21-day exponential moving average.
Did The Regression Channel On The Nasdaq Spell A Future Pullback? Join The Conversation At IBD Live!
Outside The Dow Jones
Meanwhile, as banking members of the Dow Jones extend their post-breakout gains, Wells Fargo broke out.
The megacap financial powerhouse has been lagging its peers in the wake of a sales scandal several years ago that resulted in the exit of former CEO John Stumpf. But the stock is having one of its best days in months, zooming 4.5% higher and rising past a 35.20 entry point in a large, deep cup with handle.
The base could be considered a bottoming-base pattern, and the recent action shows a tight, narrow consolidation following the recent run-up off the lows.
Turnover was triple its average level over the past 50 sessions in afternoon trading. This indicates institutions are getting greedy again, a good sign for investors long in Wells Fargo stock.
Watch to see if the Relative Strength Rating improves from a current mediocre 59 score. The relative strength line hit multimonth highs, a bullish sign.
In The Dow Jones: Is It Time To Buy Verizon? Or Wait?
Meanwhile, Verizon dominated the headlines on news that Warren Buffett is increasing his stake in the veteran telecom giant.
But Verizon is still trading below both its 50-day moving average and the longer-term 200-day line.
MarketSmith charts draw the 50-day line in red on a daily chart and the 200-day in black.
IBD research of the biggest stock market winners shows that the best growth stocks, including fundamental turnarounds, tend to spend a significant amount of time above the 50-day moving average while completing a new base.
The best time for individual growth investors to buy is when a stock delivers a strong breakout.
Verizon's sales have fallen four quarters in a row. Earnings have grown at a dismal rate lately, up on average 4.1% vs. year-ago levels over the past eight quarters. Hence, its Earnings Per Share Rating is a mediocre 69 on a scale of 1 to 99.
Verizon Stock Checkup
According to IBD Stock Checkup, the member of IBD's integrated telecom services industry group holds a 10 Composite Rating on a scale of 1 (wretched) to 99 (wizardly).
The Composite Rating stresses key fundamental, technical and mutual fund ownership quality metrics.
In general, focus on those stocks with a Composite of 90 or higher.
Turnarounds and brand-new IPOs may show a Composite in the 80s when they break out to new highs.
Fast-Moving New IPOs In Stocks Today
In the consumer lending space, Affirm struggled, falling 4.7% to 113.53.
Notice on a MarketSmith daily chart how the stock undercut its newly drawn 21-day exponential moving average for the first time.
That said, the innovator in "buy now, pay later" financial services still holds a marvelous gain since debuting on the Nasdaq last month at $49 a share.
AFRM delivered a loss-cutting sell signal for those who bought during last week's breakout attempt past a 138.08 buy point in a narrow IPO base.
Cutting losses at 7%-8% from your purchase price in every stock ensures you'll live to invest another day.
At this point, watch to see if Affirm can hold above recent lows just below 100.
The stock, for now, has the opportunity to build a new base next to the failed IPO base.
The San Francisco-based firm lost 13 cents a share in the fourth quarter, matching its net loss a year earlier. Sales jumped 57% to $204 million, a quarterly record.
That impressive increase in the top line also comes on top of an 86% lift in the same quarter a year ago.
Please follow Chung on Twitter: @saitochung and @IBD_DChung
