Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. The stock market rally revived this past week, with key indices moving above key resistance.


It’s not a final victory, but it’s close. Leading stocks and other indicators are pointing to a rally in the market, which is healthier than the large-cap indexes alone indicate. While many market challenges remain, investors should add exposure gradually and prepare to take a deeper dive.

Tesla (TSLA) availability, Arista Networks (NETWORK), Enphase Energy (ENPH), Neurocrine Biosciences (NBIX) and Clean storage (PSTG) are in or near buy zones. Tesla (TSLA) and ANET shares are likely around early entries, while Pure Storage apparently did on Friday. ENPH shares initially fell on Friday but bounced back after holding above the trendline entry. NBIX shares are also holding just above the trend line.

NBIX shares are included IBD ranking. PSTG shares included SwingTrader. Shares of TSLA, Arista Networks, Enphase Energy and Pure Storage are in the market IBD 50. Shares of ENPH and Arista are also at IBD Big Cap 20.

The video embedded in the article analyzes the action of the market rally over the past week and analyzes Tesla, GlobalFoundries (GFS) and PSTG shares.

Dow Jones futures today

Dow Jones futures open at 6 PM ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.

Remember this night action in Dow futures and elsewhere does not necessarily become an actual trade in the next regular Stock Exchange session.

Join IBD’s experts as they analyze active stocks on IBD Live’s stock market rally

Stock market rallies

The stock market rally extended recent losses on Tuesday, but then rebounded for strong weekly gains.

The Dow Jones Industrial Average rose 2.7% last week Exchange Trading. The S&P 500 jumped 3.65%. The Nasdaq Composite jumped 4.1%. The small-cap Russell 2000 rose just over 4%.

The yield on the 10-year Treasury note rose 13 basis points to 3.32 percent, a sixth weekly advance and near an 11-year peak of 3.48 percent in June.

U.S. crude oil futures hit their lowest levels since January during the week, but recovered to finish down just 0.1 percent at $86.79 a barrel. Natural gas futures fell 9%.


Avg the best ETFsInnovator IBD 50 ETF (FFTY) bounced 2.6% last week, while the Innovator IBD Breakout Opportunities ETF (BOOTH) gained 2.55%. iShares Expanded Tech-Software Sector ETF (IGV) jumped 5.6%. VanEck Vectors Semiconductor ETF (SMH) rose 4.35%.

SPDR S&P Metals & Mining ETF (XME) jumped 6.1% last week. Global X US Infrastructure Development ETF (PAVING) jumped 5.1%. US Global Jets ETF (STREAMS) rose 5.2%. SPDR S&P Homebuilders ETF (XHB) rose 4.5%, even with higher government bond yields. Energy Select SPDR ETF (XLE) posted a gain of 0.8%, and the Financial Select SPDR ETF (XLF) added 4.5%. Select Healthcare Sector SPDR Fund (XLV) jumped 4.4%.

Reflecting the more speculative stocks of history, the ARK Innovation ETF (ARKK) shot up 9.9% last week, and the ARK Genomics ETF (ARKG) 8.85%. Tesla stock is a major holding in Ark Invest’s ETF.

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Stocks to watch

Tesla shares jumped 10.9% last week to 299.68, bouncing off its 50-day line to move back above its 200-day moving average. However, the volume was anemic. Investors could potentially buy TSLA shares here or just above the 300 level, with 314.74 as a quasi-handle. The EV giant is still far from official points of purchase.

Tesla has recovered from the Covid restrictions and significantly expanded its production capacity. But competitors are also stepping up, with Chinese EV makers in particular producing new models in volume and significantly expanding their international presence. It’s sure to be an interesting few months in the EV space.

ANET shares jumped 6.1% in the past week to 124.11, bouncing off the 10-week moving average and reclaiming the 200-day and 21-day lines, albeit on light volume. Arista Networks stock has a 132.97 buy point from a double bottom base, but investors could take an early entry around current levels. Arista’s earnings and sales have accelerated over the past three quarters.

ENPH shares jumped 9.5% to 305.70 this past week. The stock retook its 21-day line on Tuesday, possibly offering an early entry on a brief consolidation after the post-earnings surge to new highs. On Wednesday, Enphase shares were definitely actionable, hitting new highs. On Friday, ENPH shares fell to 294.20 intraday on analyst downgrades, but bounced off the bottom after never breaking the trendline entry or reaching its 21-day line.

The line of relative strengthapart from Friday’s decline, rose to record highs as Enphase shares outperformed the S&P 500.

Shares of NBIX rose 3.4% in the short week to 106.51, bouncing off a 10-week line. Shares cleared the trend line on Thursday, then held above that on Friday.

Shares of PSTG rose 3.9% to 30.30 for the week after testing its 50-day and 200-day lines. After the August breakout failed, a new handle formed with a 31.62 buy point. But on Friday, the stock broke the downtrend on that handle and moved above the 21-day line, suggesting an early entry.

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Market Rally Analysis

On Tuesday, the stock market rally appeared to be in its final moments. The major indexes were starting to lose sight of their 50-day line after crashing off the 200-day line in mid-August. The Nasdaq Composite bottomed out in late July, but notably did not close below that zone.

Since then, the underlying averages have recovered.

On Friday, the small-cap S&P 500 and Russell 2000 retook their opening 50-day moving averages, followed by the Nasdaq in the afternoon. The Dow Jones briefly cleared its 50-day line, but closed just below that key level.

While the S&P 500 now has some space above the 50-day line, it may be premature to say that the overall market rally has decisively cleared the key test.

One reason is that mega-cap stocks have been notable resistance for the large-cap Dow, S&P 500 and Nasdaq composite, masking the underlying upside action.

NYSE advancers beat decliners 5-1, while Nasdaq winners outpaced losers 5-2.

The S&P MidCap 400 regained its 50-day line on Thursday, then broke above the 21-day on Friday.

Invesco S&P 500 Equal Weight ETF (RSP), which does not exceed megacaps such as An apple (AAPL), Microsoft (MSFT) and Tesla actually retook its 50-day line on Wednesday, added to Thursday’s gains, then climbed above the 21-day line convincingly on Friday.

To be fair, megacaps did well on Friday. Shares of Tesla posted solid gains, while shares of Apple and Microsoft moved to key levels.

Despite the pullback in ENPH shares on Friday, solar stocks remain market leaders, along with pollution control and various medical names. But tech stocks like shares of ANET and Pure Storage are also starting to rise.

Steel names are making a comeback, while there’s scattered strength in retail and restaurants.

Oil and gas names steadied against underlying commodity prices after falling earlier in the week.

The market rally remains “under pressure”.

It won’t take much to make the indices fall back below the 50-day line and revisit last week’s lows. On the upside, the 200-day moving average is still a huge test.

In addition to technical headwinds, Tuesday’s consumer price index for August loomed large. The CPI inflation report likely won’t prevent the Federal Reserve from raising rates by 75 basis points for a third consecutive meeting on September 21. But the modest report could bolster expectations for a slowdown in rate hikes later in the year.

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What should we do now

The stock market rally has seen real progress over the past three sessions. Investors should probably add some exposure by this point.

If the Nasdaq decisively clears the 50-day moving average, investors are likely to become more aggressive, with little room to work before the indexes reach the 200-day.

Create your watchlists. Cast a wide net in general, but definitely focus on acting or potentially acting names.

As you look for opportunities, be flexible. If the market rally slows again, be ready to switch back to a more defensive mindset and portfolio.

Read it The big picture every day to stay in sync with market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.


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