Dow Jones Futures: Boeing, Apple Chipmaker in Buy Zones; Tesla is late on the GM deal
Dow Jones futures edged lower overnight, along with S&P 500 futures and Nasdaq futures. DocuSign earnings and a Tesla charging deal with General Motors (GM) was in focus overnight.
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Share price gains showed modest to solid gains on Thursday in the major indices, with the Nasdaq index recovering somewhat from Wednesday’s downward turn. Meanwhile, small caps and midcaps fell slightly, recovering well from declines and giving up only a portion of recent gains.
The Dow Jones giant Boeing (BA), Cardinal health (CAH), Flooring and furnishings (FND) and TG Therapeutics (TGTX) is in buy territory.
So it is Taiwan Semiconductor Manufacturing (TSM). Taiwan Semi is the world’s largest chip foundry, and makes semiconductors for Nvidia (NVDA), apple (AAPL), Qualcomm (QCOM) and many others. Taiwan Semi reports May sales early Friday.
Tesla ( TSLA ) extended a record streak of up days in high volume on Thursday. After the conclusion came the news that General Motors will use Tesla’s Superchargers and charging technology. A similar agreement follows Ford Motor (F) announced at the end of May. TSLA shares and GM both rose in extended trading.
DocuSign (DOCU) reported first-quarter financial results late Thursday. DOCU shares rose 5% in extended trading on earnings and guidance. The digital document and e-signature software company is working on a buy point at 69.45, retracing its 200-day line at the end of May. DocuSign shares rose 2.2% to 58.48 on Thursday.
The Tesla share and Nvidia are on the IBD Leaderboard. BA stock was added to SwingTrader on Thursday, joining FND stock. Flooring and decor was Thursday’s IBD Stock Of The Day.
Dow Jones Futures today
Dow Jones futures fell 0.1% relative to fair value. S&P 500 futures and Nasdaq 100 futures were lower. Tesla stock is a major S&P 500 and Nasdaq 100 member.
Late Thursday, former President Donald Trump said on his Truth Social page that he has been indicted on federal criminal charges related to classified documents retained after he left the White House. Several organizations confirmed Trump’s criminal indictment, his second this year.
Keep in mind that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular session.
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Stock market rally
Equity gains gradually improved throughout Thursday, with indices closing near session highs.
The Dow Jones Industrial Average rose 0.5% in Thursday’s trading. The S&P 500 index rose 0.6 percent. The Nasdaq composite rose 1.0 percent. The small-cap Russell 2000 fell 0.4 percent.
US crude oil prices fell 1.7% to $71.29 a barrel.
The 10-year government yield fell 7 basis points to 3.71%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF ( FFTY ) climbed 0.8%, while the Innovator IBD Breakout Opportunities ETF ( BOUT ) was up 0.5%. The iShares Expanded Tech-Software Sector ETF ( IGV ) rose 1.3%. The VanEck Vectors Semiconductor ETF ( SMH ) rose 1.2%. TSM stock is a huge SMH component, along with Nvidia.
As a result of more speculative stock stocks, the ARK Innovation ETF ( ARKK ) rose 1% and the ARK Genomics ETF ( ARKG ) fell 0.1%. Tesla stock is the No. 1 holding across Ark Invest’s ETFs.
The SPDR S&P Metals & Mining ETF ( XME ) fell 0.2% and the Global X US Infrastructure Development ETF ( PAVE ) was down 0.1%. The US Global Jets ETF (JETS) rose 0.6%. The SPDR S&P Homebuilders ETF ( XHB ) fell 0.35%, with FND stock a notable XHB holding. The Energy Select SPDR ETF (XLE) gave up 0.4% and the Health Care Select Sector SPDR Fund (XLV) climbed 0.6%.
The Financial Select SPDR ETF ( XLF ) gave up 0.1%. The SPDR S&P Regional Banking ETF ( KRE ) retreated 1.2%.
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Shares in buying areas
Boeing shares rose 2.9% to 218.11 on Thursday, moving above various near-term highs and a trendline, making for an early entry. The volume was robust. BA stock is approaching a buy point at 221.33 from a flat base going back nearly four months. It followed a sharp move for the Dow aviation giant from late September to mid-February.
CAH shares climbed 2.5% to 85.33, rebounding from the 21-day and 10-week lines and breaking a brief downtrend in a small consolidation just above a five-month base that was clearly established in early May. Early Thursday, Cardinal Health slightly raised the midpoint of its 2023 earnings guidance and announced a $3.5 billion buyback of CAH stock.
TGTX stock jumped 7.3% to 28.98, moving off the 10-week line, reclaiming the 21-day and breaking a downtrend. Shares nearly doubled from a breakout in late March to early March before retreating. TG Therapeutics is still losing money. Sales soared 286% last quarter, but only to $7.8 million. Investors may get an indication of monthly sales next week.
FND shares fell 1.2% to 96.55 in light volume on Thursday. But that followed a 5.1% jump on Wednesday in heavy trading, retaking the 50-day line. The flooring dealer can still do something about it. Floor and decor stock also has a purchase point of 101.49 cup with handle.
TSM stock was down 0.35% at 99.94, still above a consolidation buy point at 98.99, according to MarketSmith analysis. Taiwan Semi first jumped into a buy zone on May 25, following Nvidia’s blowout earnings and guidance. On Monday, Taiwan Semi shares fell to near their 21-day line before paring losses. Taiwan Semiconductor will report May sales early Friday.
Meanwhile, Nvidia shares rose 2.8% to 385.10, continuing to trade in a range after its May 25 earnings gap. NVDA stock currently has no buy option, although a tight pattern or pullback to, say, the 21-day line could provide chances to add shares.
Tesla shares
Tesla shares rose 4.6% on Thursday to 234.86, the highest in seven months. The EV giant has now rallied for 10 sessions, its longest winning streak since 11 sessions in January 2021. But that’s a record nine straight increases in above-average volume. TSLA stock is increasingly extended from a buy point at 207.79.
Tesla-GM charging agreement
In the Tesla-GM deal Thursday night, General Motors will get access to 12,000 SuperChargers via an adapter next year. GM will also begin using a charging port used by Tesla starting in 2025 models. The agreement will give a boost to Tesla’s revenue, but will also significantly increase charging options for GM and Ford as they increase EV production.
Tesla shares jumped 5% late.
GM shares climbed 4% overnight, signaling a move back above the 200-day mark.
Market rally analysis
The stock rally had another constructive day, with Wednesday’s losers generally finding support while recent big winners resisted significant pullbacks.
The Nasdaq bounced from above its 10-day line after leading Wednesday’s retreat. But it is unclear whether it can make a big move without a longer pause or retreat. The composite and Nasdaq 100 are no longer extended from their 50-day lines, but it won’t take much to look stretched again.
The S&P 500 is trading right at the 2023 highs and just below a 52-week high. The Dow Jones moved past last week’s peaks and is not far from the best levels of the year.
Overall, winners and losers were roughly even, after the frontrunners won decisively in the previous two sessions.
The Russell 2000 and S&P MidCap 400 held almost all of Wednesday’s strong gains.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) rose 0.85%, still right around 52-week highs.
The Invesco S&P 500 Equal Weight ETF (RSP) posted a small gain after back-to-back 0.7% wins.
Ideally, the Nasdaq and many leading technology stocks will pause or retreat modestly for a time, while other sectors take over in greater breadth. There are signs of that in the last week, but it may not last.
Leadership can rotate, or it can expand. Right now, there aren’t many stocks flashing buy signals.
The software took a thunderous Wednesday, although the chart damage depended on whether the individual names extended or were recent breakouts hovering around buy points. Some of these names may recover quickly, but others may not. Chipmakers, which generally fared better on Wednesday, have a number of stocks showing constructive action.
Housing stocks generally show strength. Travel is on the move, but there aren’t many stocks that look actionable right now. BA stock is among several aerospace names showing strength, along with machinery and industrial plays in general. Some manufacturers of biomedical and medical products are doing relatively well.
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What to do now
The stock rally is in a confirmed upward trend, with the Nasdaq and S&P 500 at peaks in 2023 and some signs of better breadth. So investors may be looking to add exposure, even if buying opportunities are limited.
A number of stocks from a wide range of sectors are establishing or potentially doing so by coming up to buy points and retreating bullishly. Keep your watchlists up to date.
Adapt to market conditions and leadership as they are, not what you want them to be.
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