By DONALD H. GOLD, INVESTOR’S BUSINESS DAILY
Stocks began Tuesday’s session on a firm note, but saw modest gains fade until the averages showed mixed results and lower volume by day’s end.
The Nasdaq rose 0.2% and the S&P 500 edged up 0.1%. The Dow Jones industrial average, Monday’s leading index, fell 0.2%. Volume fell on both major exchanges, according to preliminary data.
Illumina (ILMN) shot up 4% in red-hot trade. Published reports said Swiss drugmaker Roche Holding (RHHBY) may be considering a bid for Illumina at $60 per share. Roche had abandoned an earlier attempt in April.
Paint maker Valspar (VAL) climbed 2% in weak action. The IBD 50 stock had risen 10% above a 53.85 buy point in a base-on-base pattern. It has since eased to 5% above that mark.
Dick’s Sporting Goods (DKS) rallied 4% in moderately above-average trade and regained its 50-day line. The stock recouped all losses from the past two sessions and is trying to regain its 52.10 buy point from a cup-with-handle base.
AutoNation (AN), which reversed lower Monday, rose 2% to a new high in moderately above-average trade. The lift puts it 6% past a 42.53 buy point from a cup-with-handle base. AutoNation, a retailer of new and used vehicles, has posted accelerating profit growth the past two quarters. Analysts see it extending that streak when it reports fiscal Q3 earnings Oct. 25.
Liquidity Services (LQDT) tumbled 7%, slicing its 50-day and 200-day moving averages. The stock is in a flawed cup-with-handle base. Liquidity’s base corrected a deep 43%. Tuesday’s sell-off puts the correction in the handle at 20%. Proper handles should pull back no more than 12%.
Healthcare Services Group (HCSG) was off its session low, but still down 3% in heavy trading. The stock was off by as much as 5% after Benchmark Co. downgraded it to hold from buy. Intraday, Healthcare Services fell nearly 5% below a 23.65 buy point from a cup base cleared Monday.