Futures for the S&P 500 index, Nasdaq 100 and Dow Jones industrial average were fractionally lower early Tuesday morning. On Monday, the Nasdaq composite led the way, fueled by Apple (AAPL), along with chip-equipment and rebounding fiber-optic stocks. Apple also pushed the Dow to yet another record high and its 10th straight advance. The S&P 500 index ticked up to just below a record high.
XAutoplay: On | Off Apple itself retook a buy point in Monday's regular session initially cleared last Wednesday following strong earnings and guidance. Meanwhile, Universal Display (OLED) and chip-equipment supplier Applied Materials (AMAT) are two IBD 50 stocks that are seen benefiting from the Apple iPhone 8 and other smartphones moving toward OLED screens. Meanwhile, Lumentum is another IBD 50 member seen as an iPhone play, but that fiber-optic stock no longer has a valid entry point.
S&P 500 index futures fell 0.1% vs. fair value. Nasdaq 100 and Dow futures retreated a fraction.
Universal Display supplies materials and technology for organic light-emitting diode (OLED) displays and lighting. The Apple iPhone 8 is widely expected to use OLED screens. Other big makers of smartphones are moving toward OLED screens.
Late last Thursday, Universal Display reported a 115% earnings per share gain with revenue up 59% to $102.5 million, both well above estimates.
Universal Display shares were volatile on Friday, closing down 1.3%, but just above their 50-day moving average. Shares rose 0.13% in Monday stock market trading, snapping a six-session losing streak.
The stock is in a cup-with-handle base with a 127.88 buy point.
Applied Materials is a major semiconductor- and display-equipment maker. Pacific Crest Securities recently tapped it as one of five chip plays that could benefit from Apple and others moving toward OLED screens.
Applied Materials is in a short cup base with a relatively deep handle, giving it a 47.69 buy point. Shares rose 2.7% to 43.96, approaching to their 50-day moving average after falling below that key level last week.
Lumentum is one of the top-performing fiber-optic stocks in 2017, and its 3D sensor gear could be tapped for the iPhone 8 as Apple embraces augmented reality. Lumentum reports quarterly earnings on Wednesday.
On July 24, Lumentum surged to close slightly above a 67.40 buy point. Shares quickly reversed, pulling back to support near the 50-day line for the next couple of weeks. But Lumentum tumbled 5.8% on Friday following weak guidance late Thursday from Applied Optoelectonics (AAOI), one of several fiber-optic plays to give cautious results or guidance. That pushed Lumentum's stock more than 10% below the buy point, more than enough to make that entry invalid.
Fiber-optic stocks rebounded Monday, with Applied Optoelectronics up 7.9% (after Friday's 34% crash). But Lumentum dipped 0.2% to 58.75.
Lumentum did edge higher late Monday as Inphi (IPHI), a chipmaker that's seen as an optical play, surged on strong results.
After such a strong run-up, Lumentum could use a breather, giving the stock time to set up in a proper consolidation before breaking out again to new highs.