Dow Jones Futures Loom: Time to Buy These 5 Mid-Market Stocks?
Dow Jones futures open Sunday night, along with S&P 500 futures and Nasdaq futures.
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The stock market recovery retreated last week, with a long-awaited pullback. Sales have been orderly for Nasdaq and the S&P 500. Nvidia (NVDA), apple (AAPL) and Meta platforms (META) held firm or marched higher, while Google parent Alphabet (GOOGL) regained a key level at Friday’s close. Tesla ( TSLA ) retreated modestly, but after huge gains recently.
However, the Dow Jones, Russell 2000 and other measures showed more damage.
MongoDB (MDB), HubSpot (HUBS), Chipotle Mexican Grill (CMG), Shockwave Medical (SWAV) and DexCom (DXCM) is holding well and trading near buy points.
MDB shares, HubSpot, Chipotle and Shockwave have all traded close amid bullish technical action. DXCM stock is trading right around the top of a base.
On Friday night, DexCom raised its fiscal 2025 revenue guidance at its investor day.
With the market rally retreating, this is a time to keep a close eye on leading stocks to see which names hold up the best. Remember that a stock may find support or rebound from a key level on any given day, such as Super micro computer (SMCI) but then reverse lower.
NVDA stock continues to stand out as the true chip and AI leader. Meanwhile Advanced Micro Devices (AMD) and speculative plays such as C3.ai (AI) broke hard below their 21-day lines.
Apple shares quietly set a new record high with META shares marching to a 16-month best.
Tesla, Nvidia, MongoDB, Meta Platforms and HUBS stocks are on the IBD Leaderboard, with CMG stocks on the Leaderboard watch list. CMG shares are also on SwingTrader. Tesla stock and HubSpot are on the IBD 50. Tesla, Chipotle, HubSpot and MDB stock are on the IBD Big Cap 20.
The video embedded in this article discussed the market rally’s action and analyzed HubSpot, Rockwell Automation (ROK) and the Google stock.
Dow Jones Futures today
Dow Jones futures open at 6 p.m. ET, along with S&P 500 futures and Nasdaq 100 futures.
Keep in mind that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
Stock market rally last week
The stock rally took several weeks of winning streaks, with the Nasdaq showing modest declines while small caps struggled.
The Dow Jones Industrial Average fell 1.7% in last week’s trading. The S&P 500 index and the Nasdaq Composite fell 1.4%. The small-cap Russell 2000 fell 2.95%.
The 10-year government yield fell 3 basis points to 3.74%.
US crude oil futures fell 3.85% to $69.16 a barrel last week. Copper futures fell 2%, including Friday’s 2.1% plunge. Adding to concerns about global demand, the US dollar had a strong week.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF ( FFTY ) fell 1.65% last week, while the Innovator IBD Breakout Opportunities ETF ( BOUT ) fell 1.7%. The iShares Expanded Tech-Software Sector ETF ( IGV ) fell just over 3%, with the HUBS stock as a component. The VanEck Vectors Semiconductor ETF ( SMH ) yielded 3.8%. Nvidia stock is No. 1 in SMH, with AMD stock also a notable component.
Reflecting more speculative storied stocks, the ARK Innovation ETF ( ARKK ) retreated 4.9% last week and the ARK Genomics ETF ( ARKG ) lost 5.3%, after seven weeks of gains for both. Tesla stock is the top holding across Ark Invest’s ETFs.
The SPDR S&P Metals & Mining ETF (XME) fell just over 2% last week. The Global X US Infrastructure Development ETF ( PAVE ) was down 0.5%. The US Global Jets ETF (JETS) fell 1.75% after three big weekly gains. The SPDR S&P Homebuilders ETF (XHB) rose 0.5 percent. The Energy Select SPDR ETF (XLE) fell 4.3% and the Health Care Select Sector SPDR Fund (XLV) fell 0.2%. The Industrial Select Sector SPDR Fund ( XLI ) retreated 2.1% after a three-week boom.
The Financial Select SPDR ETF ( XLF ) fell 2.5% and the SPDR S&P Regional Banking ETF ( KRE ) fell 8.1%.
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Shares close to buy points
MongoDB shares rose 2.7% to 389.99 in an outside week of upside. MDB stock is within a three-week tight pattern or high-tight flag with a buy point at 398.89. The relative strength limit is around a 10-month high, and has increased sharply since the beginning of May. It reflects MDB’s strong outperformance compared to the S&P 500.
MDB shares fell 4.1% on Thursday as the database software firm made more AI announcements and an expanded Google Cloud partnership at its investor day. That made an aggressive entry around 385 or 389. MongoDB stock rallied on Friday, holding strong as several Thursday winners sold off.
HubSpot shares fell 1.4% to 512.21, continuing to find support at the 21-day line. HUBS stock has a buy point at 535.12 from a four-week tight pattern. A move above Friday’s high of 522.20 could offer an early entry.
Chipotle shares closed higher but rose 0.5% last week to 2,043.68, continuing to trade around the 21-day and 10-week lines. CMG stock has a five-week tight pattern that is now also a flat base, both with a buy point at 2,139.88, according to MarketSmith analysis. However, investors could use a move above Wednesday’s high of 2,092.51 as an early entry.
Shockwave stock has had some wild moves on a daily chart, but on a weekly chart it has shown tight closes. Shares fell 0.6% to 292.63, ending four weeks of modest gains. The SWAV share has found support on the 21-day and 10-week lines. Investors can still use the buy point 308.09 cup with handle. The 300 level has been a key level and can serve as an early entry.
DexCom shares fell 2.6% to 126.75 last week. But DXCM stock snapped a four-day losing streak on Friday, finding support at the 21-day line and holding a 126.44 buy point. The diabetes product giant is trying to clear a selection dating back to early November.
Late Friday, Dexcom said it expects 2025 sales of $4.6 billion to $5.1 billion. That’s an increase of $600 million from the previous range. The company also slightly raised some forecasts for the 2025 profit margin.
S&P 500 Giants Lead 5 Stocks Near Buy During Market Pullback
Nvidia shares
Nvidia fell 1.1% to 422.09 last week, falling just short of its all-time high to 10-day line. A pullback to the 21-day line could potentially offer a buying opportunity.
AMD stock skidded 8.4% to 110.01, breaking through the 21-day line and falling to just above the 10-week line. The shares are 17% off a 52-week intraday high of 132.83 on June 13, when AMD unveiled new AI chips aimed at competing with Nvidia’s offerings.
Meanwhile, AI stock plunged 25% to 33.39. On Friday, C3.ai stock fell 10.8%, below its 21-day line and now back to a deep consolidation seen earlier this month. AI stock is still essentially a double from its early May lows, but it’s now nearly 32% off its 52-week high of 48.87 set just a week earlier.
Tesla shares
Tesla shares fell 1.5% to 256.60 after reversing from 276.99 on Tuesday, the highest point in nearly nine months. It came amid three analyst downgrades during the week, mostly on valuation.
After another big rally in 2023, including a record 13-day winning streak, Tesla stock is headed for a break, especially amid a broad market decline. It is still extended from even the 21-day moving average.
It is possible that TSLA stock will start to take hold of a consolidation back to the end of September. Given the depth of the consolidation and the strong recent run, Tesla could use a handle with some length and depth.
Apple Stock, Meta
Apple and Meta shares did not behave as if there was a pullback in the market. Both found steady support from their rapidly rising 10-day lines. AAPL shares climbed around 1% to hit a new record high. Meta shares rose 2.7% to a 16-month best.
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Market rally analysis
The stock market recovery retreated last week. So far, it’s been an orderly retreat for the S&P 500, Nasdaq and most leading stocks, although breadth remains an issue.
The Nasdaq, which had been extended from an eight-week run, fell back to around the 10-day line but came well off Friday’s lows and never broke Thursday’s lows. The S&P 500 fell slightly below the 10-day mark. Apple shares, Meta, Nvidia and Tesla held up provided some support.
The Dow Jones fell below its 21-day line to test its 50-day line on Friday. The Russell 2000 also fell through its 21 days and is nearing its 200 days and the top of a previous streak.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) fell 2.8% for the week, far worse than the Nasdaq 100’s 1.5% decline. The QQEW fell to its 21-day line.
The Invesco S&P 500 Equal Weight ETF ( RSP ) fell 2.7%, falling below its 21-day line and its April highs. It is not far from a 50-day line test. The RS line for RSP continues to weaken, falling to its worst level since late 2020. It shows how RSP continues to underperform the S&P 500.
The advance decline lines weakened significantly last week. While it is natural to see losers take control in a market downturn, a little more strength outside of growth leaders would be nice.
Is the pullback in the market almost complete? It is possible. But with the Nasdaq 6.5% above its 50-day and the Nasdaq 100 7.7% above that line, they would quickly look significantly extended again if they marched higher.
Nasdaq and S&P 500 pulling back to their 21-day lines over a week or two would be helpful. That would bring the 50-day lines much closer.
During a strongly trending market, second-tier names and even laggards will advance. The retreat separates the true leaders, but it is an ongoing process. Some resilient stocks today may start to rally, while others that have taken a few hits may move higher. The Google share is an example of the latter. After falling below the 21-day line on Wednesday and approaching the 10-week line on Thursday morning, GOOGL stock bounced back above the 21-day line.
Chip, software and megacap growth names remain market leaders, including MongoDB and HubSpot, along with homebuilders and some other housing stocks. Medical products is a growing area, with SWAV shares and DexCom in that field. Some restaurants that CMG creates are also on the menu.
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What to do now
The stock rally appears to be in a healthy, normal decline, with relatively modest losses. But it can get more intense. Also, you don’t know how individual stocks and sectors will hold up.
Investors should generally hold steady and wait for signs that the pullback is over. Look for stocks that respect key levels and show improved relative strength.
If you feel compelled to act now, be ready to jump back out. Thursday’s market termination produced some aggressive entries. The MDB stock is holding up for now, but several others quickly became slim or even solid losers.
The current pullback could set the stage for a number of buying opportunities in the coming days or weeks. So it’s time to prepare and build your watchlists. Stay engaged, watch the action in the general market and be ready to pounce on buying points.
Read The Big Picture every day to stay in sync with market direction and leading stocks and sectors.
Follow Ed Carson on Twitter at @IBD_ECarson for stock exchange updates and more.
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