Dow Jones futures edged lower overnight, along with S&P 500 futures and Nasdaq futures, amid another busy night of earnings. The stock market rally got a strong boost on Wednesday as tech titans rose.
apple stock, Amazon.com (AMZN), Microsoft (MSFT), parent of Facebook Meta platforms (META), Tesla (TSLA) and Google Parent Alphabet (GOOGLE) were among the leaders. An apple (AAPL) offers aggressive point of purchase while Microsoft and Google shares, if you squint, are approaching possible entries.
Highly regarded former growth leaders also had a strong session, with venture capital once again in vogue.
Fortinet (FTNT), Albemarle (ALB), McKesson (MCK), ELF Beauty (ELF) and Axcelis Technologies (ACLS) were notable earnings reports after the close. All closed on Wednesday near points of purchase. But while shares of McKesson, Axcelis, ELF and ALB rose, shares of FTNT fell.
Manufacturer of luxury electric cars Lucid Group (LCID) also reported quarterly results. LCID shares fell on weak revenue and production guidance.
early thursday Eli Lilly (LLY), Lantheus (LNTH), a former software leader Datadog (DOG), Quanta Services (PWR), New fortress energy (NFE), Cheniere Energy (LNG) and a Chinese e-commerce firm Ali Baba (GRANDMA) report.
Shares of LLY fell 2% on Wednesday, below the 50-day line and testing an old buy point. PWR was down 0.9%, trading just below a buy point after a breakout last Friday. LNG shares fell 0.3% on Wednesday, consolidating just below a traditional buy point after already clearing a trend line last week. Shares of DDOG, up 5.7%, are nearing near-term highs but are far from their late-2021 peak. Shares of NFE were down 0.7%, trading near a base cup point of purchase. Shares of LNTH were down 0.3% at 75.89, within a range of a 73.88 buy point.
Shares of BABA rose 3.35% but remained below its 50-day and 200-day lines.
Eli Lilly, Lantheus, Quanta Services and Cheniere Energy are included IBD ranking. NFE shares are on the ranking’s watch list. Shares of Microsoft, Google and FTNT are included IBD long-term leaders. New shares of Fortress Energy and ACLS are on the market IBD 50. PWR stock is at IBD Big Cap 20.
Dow Jones futures today
Dow Jones futures fell to fair value. S&P 500 futures fell 0.1%. Nasdaq 100 futures were down 0.25%.
Stock market rallies
The stock market rally rebounded strongly on Wednesday, led by technology companies after Tuesday’s retreat, led by the Dow.
The Dow Jones Industrial Average rose 1.3% on Wednesday Exchange Trading. The S&P 500 rose 1.6%. The Nasdaq composite jumped 2.6%. The small-cap Russell 2000 gained 1.4%.
The 10-year Treasury yield rose 1 basis point to 2.75%, but was well above its intraday peak of 2.85%.
U.S. crude fell 4 percent to $90.66 a barrel, below the level it closed at on Feb. 23, just before Russia’s invasion of Ukraine. OPEC+ agreed to raise production quotas in September by a slim 100,000 barrels per day, with the actual output increase likely to be modest. But demand concerns continue to weigh on oil prices, with U.S. crude and gasoline inventories unexpectedly rising in the past week.
Megacap Stock Action
Apple shares jumped 3.8% to 166.13, a three-month high. The stock moved above its 200-day line on Friday after the earnings, then pulled back slightly to start the week. Investors could use Wednesday’s move as an aggressive entry even though volume was below average. AAPL shares are still far from the peak and buy point at 183.04, but it line of relative strength is already at a new high.
Shares of MSFT rose 2.8% and Google rose 2.6%. META shares jumped 5.4% but are still below their long-sliding 50-day line. Shares of AMZN rose 4%, moving toward its 200-day line.
Tesla shares rose 2.3%, their sixth straight gain and closing above the 200-day line.
Avg the best ETFsInnovator IBD 50 ETF (FFTY) rose 0.2%, while the Innovator IBD Breakout Opportunities ETF (BOOTH) rose 0.4%, with energy names weighing on funds. iShares Expanded Tech-Software Sector ETF (IGV) jumped 3.2%. MSFT shares are a major holding of IGV, with Fortinet and DDOG shares also components. VanEck Vectors Semiconductor ETF (SMH) advanced by 2.4%.
SPDR S&P Metals & Mining ETF (XME) fell 0.4%, and the Global X US Infrastructure Development ETF (PAVING) rose 0.7%. US Global Jets ETF (STREAMS) rose 3%. SPDR S&P Homebuilders ETF (XHB) grew by 0.6%. Energy Select SPDR ETF (XLE) fell 2.9%, and the Financial Select SPDR ETF (XLF) rose 1.5%. Select Healthcare Sector SPDR Fund (XLV) advanced 0.9%, with shares of LLY flat.
Reflecting the more speculative stocks of history, the ARK Innovation ETF (ARKK) jumped 6.1% to a three-month high. ARK Genomics ETF (ARKG) jumped 4.7%, matching a three-month intraday high. TSLA stock is a major holding in the Ark Invest ETF.
McKesson’s earnings peaked views with the drug distributor pointing above the EPS. Shares of MCK were up slightly in overnight trade. Shares fell 2.4% to 327.10 on Wednesday after falling below 340.04 flat base point to buy on Tuesday, according to MarketSmith analysis.
Fortinet earnings slightly beat views in the second quarter, while revenue guidance and the third quarter were roughly in line. Shares of FTNT dipped into extended action, signaling a move below the 200-day and 50-day lines. Shares rose 4.2% to 62.88 on Wednesday, closing above the 200-day, a major stumbling block in recent months. Fortinet shares have a buy point at 74.45, but a strong move above the recent July 12 high of 63.56 could offer an early entry or place to start a long-term leader position.
Revenue of Albemarle beat estimates, while the lithium play also rose again. ALB shares rose steadily overnight. Shares fell 1.8 percent to 239.54 on Wednesday, as a rival Livent (LTHM) turned sharply lower despite seemingly strong gains. ALB shares have a 273.78 deep buy point cup-with-handle base.
ELF Beauty’s earnings easily beat estimates for the fiscal quarter, while sales growth accelerated. The budget cosmetics maker also guided higher for full fiscal 2023. Shares of ELF rose modestly in extended trade. Shares fell 0.6% on Wednesday to 33.87, within a range of a 33.54 buy handle cup point.
Axcelis earnings easily beat, while 50% sales growth slightly beat. The chip game was led by third quarter earnings. Shares of ACLS were modestly higher overnight. Shares rose 3.8% to 72.70 on Wednesday. Axcelis shares are working towards a buy point at 83.83, well extended by possible early entries.
Clear earnings were mixed, with a smaller-than-expected loss but revenue well below views. Lucid again lowered its production target for the full year. While the Lucid Air sedan, a rival to the Tesla Model S, has won critical acclaim, manufacturing and supply chain issues have plagued EV startups like Rivian (RIVN). LCID shares fell in extended action. Shares rose 4% to 20.56 on Wednesday, well below a November peak of 57.75.
Market Rally Analysis
The stock market rally had strong gains on Wednesday after retreating modestly on Tuesday.
The Nasdaq is now well above its highs since early June, with Nasdaq volume much higher than Tuesday. Shares of Apple, Meta, Google and ARK rose.
The S&P 500, Dow Jones and Russell 2000 are still below their early June highs, although the S&P 500 and Russell are closing in.
Market breadth improves as leadership expands.
Oil stocks retreated with lower crude prices, but this could be a chance to build handles at the base of the cup.
Speculative growth names were among the big gainers on Wednesday, reflecting a shift in the risk trade. The majority still need a lot of work to be operational. Although bottom fishing generally works from mid-June, previous attempts to guess the bottom by fickle names have not fared so well.
At this point, many failed stocks have rallied quite a bit while still facing a lot of resistance.
What should we do now
The stock market rally continues to advance. This is a time to invest, but with modest performance. The market rally could still slow as the Fed raises rates and the economy is still highly uncertain. Investors should avoid being too concentrated in a particular industry and may want to continue to receive partial early gains. Sector rotations and stock shakeouts are still common.
Work on those watch lists. Many stocks, including Apple, Tesla and FTNT, are retracing some key long-term averages and may be flashing early entries, or at least signaling that investors should pay attention again.
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