Dow Jones Futures: Market Rally, Tesla Holds Key Levels When Fed Officials Signal Faster Action

Dow Jones futures were little changed Wednesday night, along with S&P 500 futures and Nasdaq futures, ahead of Thanksgiving. The stock market closed mixed on Wednesday. But the major indices and many growth names found support at key levels, including the Tesla stock, InMode (INMD), Unity software (U), Shopify (SHOP) and Snowflake (SNOW).


Some Fed politicians signaled that they would be open to a faster downsizing and earlier rate hikes if inflation continues to warm. It was in a recently released minutes from the Fed meeting in early November, where politicians approved the reduction of bond purchases.

Meanwhile, chip leaders Nvidia (NVDA) and Advanced micro devices (AMD) recovered near record highs on a solid day for growth stocks.

Rivian shares fell modestly and continued to retreat after the first rise after the listing earlier this month. Rivian Automotive (RIVN) will reportedly push back deliveries for its R1S SUV to the spring of 2022 at the earliest.

Energy stocks continued to perform well, even with a fraction of lower crude oil prices on Wednesday. Pioneer natural resources (PXD) rose 1.2%, still within range of an early entry after jumping 4.2% on Tuesday, breaking a trend line and rebounding from the 50-day line.

Tesla (TSLA), Snowflake, Unity Software, InMode and Nvidia shares are on the IBD Leaderboard. The PXD stock is on SwingTrader. INMD shares, AMD, Nvidia, Unity Software and Tesla are on IBD 50.

The video embedded in this article reviewed the market action and analyzed the AMD stock, Ovintiv (OVV) and Dell technologies (DELL).

Dow Jones Futures today

Dow Jones futures rose 0.1% relative to fair value. S&P 500 futures rose 0.1% and Nasdaq 100 futures fell.

US stock and bond markets will be closed on Thanksgiving, but other markets around the world will be open. Dow Jones futures will be traded until 13.00 ET on Thursday and then normally opens at. 18.00 ET. But trade can be particularly thin.

The stock exchange closes on Friday at 13.00 ET.

Keep in mind that overnight trading in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular trading session.

Join IBD experts as they analyze powerful stocks in the stock market rally on IBD Live

Stock market rally

The rise in the share price opened lower, but then returned to almost break-even and closed close to peaks.

The Dow Jones Industrial Average closed just below break-even in Wednesday’s trading session. The S&P 500 index rose 0.2 percent. The Nasdaq composite rose 0.4 percent. Small-cap Russell 2000 rose 0.1%.

The 10-year government interest rate fell around 2 basis points to 1.645% after reversing from just below 1.69%, close to six-month highs. The 10-year government interest rate did not change much with the publication of ET Fed’s minutes of the meeting at 14.00. There has already been speculation that the Fed could increase the pace of bond cuts, perhaps as early as the December meeting, with 30-year inflation high.

U.S. crude oil futures fell 0.1 percent to $ 76.39 a barrel.

Among the best ETFs, Innovator IBD 50 ETF (FFTY) rose 2.45%, while Innovator IBD Breakout Opportunities ETF (BOUT) rose 0.5%. iShares Expanded Tech-Software Sector ETF (IGV) rose 0.5%. VanEck Vectors Semiconductor ETF (SMH) rose 1%. Nvidia shares and AMD are important SMH components, rising 2.9% and 5.3% respectively.

ARK Innovation ETF (ARKK) reflects more speculative history stocks, up 1.7% and ARK Genomics ETF (ARKG) 1.5%. The Tesla share is still the top holding in ARK Invest’s ETFs.

The SPDR S&P Metals & Mining ETF (XME) fell 0.5% and the Global X US Infrastructure Development ETF (PAVE) fell 0.3%. The US Global Jets ETF (JETS) rose 0.1 percent. SPDR S&P Homebuilders ETF (XHB) lost 0.2%. Energy Select SPDR ETF (XLE) rose 1% and Financial Select SPDR ETF (XLF) tipped 0.2% lower.

Five best Chinese stocks to see now

Shares find key support

Tesla shares tested their 21-day line for a second session in a row, recovering from early losses of a 0.6% gain to 1116. Shares found support on their 21-day line earlier this month. The TSLA stock may start to form a new base, but it is only a few weeks back.

The Snowflake stock tested its 50-day line for the second day in a row, climbing 3.4% to 355.36. But this upturn comes in the midst of an almost vertical fall in the SNOW stock, not an ideal retreat by any means. Snowflake revenues will also come next week, which increases a level of uncertainty.

Unity shares climbed 3.3% to 181.81, returning from its 21-day line after testing the support area. Can the Leaderboard stock return from this level or at least form a short consolidation? Or will the Unity stock fall to its 50-day line, or worse.

The Shopify share rose 3.5% to 1,628.70, a day after closing just above the 21-day limit. On Tuesday’s lowest, the SHOP share was 7.1% below the official buy point of 1,650.10. Shopify also received a gain of 13% round trip from an early entry of 1,564.43. In any case, it was a strong sell signal. But for aggressive traders, the SHOP stock undoubtedly gave a buy signal on Wednesday.

INMD shares rose 1.7% to 84.68, back above the 50-day line. The shares are 1.6% below the 10-week limit. While the InMode stock is down 4.4% so far this week after falling 5.2% last week, it did not have a huge sale like many growth leaders. Investors can use the 21-day line as an early entry point for INMD shares, which are a few weeks into a new consolidation.

Rivian delays?

Rivian Automotive is postponing initial deliveries of its all-electric R1S SUV from January to at least March 2022 and possibly May-June. It is according to several reports, which cites Rivian emails to reservation holders. Rivian has already started limited deliveries of its R1T pickup. But much of the production focus will be on making vans for (AMZN), a key customer and major RIVN equity investor.

If true, it suggests that the Rivian R1S may not beat the Cadillac Lyriq on the market, the exclusive large SUV from General motors (GM). Both will compete against the aging Tesla Model X.

Rivian shares fell 4.2% to 114.85 on Wednesday. After consolidating in six sessions, the RIVN share now has a stock exchange listing base. But it is a long way from the official buying point of 179.57. Investors may want to look for an early entry in the Rivian stock.

Inflation Sizzling; Economy and market will pay the price

Market Rally Analysis

After a couple of sessions where growth stocks were thrown out, investors can be thankful that the stock market rally is not a turkey.

Nasdaq just below Tuesday’s lowest intraday on Wednesday, but rose once more to complete above its 21-day moving average. The Nasdaq 100 and S&P 500 also found support on the 21-day line. The Dow Jones is trading only between 21 days and the peak of consolidation in August-October. Russell 2000 finds support on the 50-day line.

A number of growth stocks found support, including Tesla and others mentioned here, but also many others.

Just because an index or a leading stock finds support at a key level does not mean that it will continue to maintain that level. But it is a positive sign. Growth in equities led to a decline, a welcome change, but new downturns still exceeded new highs, especially on the Nasdaq.

Ideally, the stock market rise would go sideways in a few weeks, allowing the 50-day line to close the gap with the Nasdaq and give executives a chance to form new bases or retire bullishly. So far this week, the Nasdaq is down 1.3% while the Russell 2000 is down 0.5%. Meanwhile, the S&P 500 and Dow Jones are up a bit.

Oil names such as Ovintiv and PXD shares look strong. The financial sector keeps the latest gains. A sharp fall in crude oil prices or government interest rates will of course affect the respective sectors.

Time market with IBD’s ETF market strategy

What to do now

Growth stocks often do not make it easy to buy them, especially after the first outbreak after correction. So investors may be tempted to buy or add these names when they return from the 50-day or even 21-day lines. It is a high-risk strategy with a high reward. If the market upswing continues to bounce, you will probably soon have a decent cushion in leading stocks, and the brave purchase will look “obvious” in hindsight. But if the market upturn lags, or certain sectors rotate unfavorably, you can see rapid losses.

It comes down to your investment style. How aggressive are you comfortable with, and how quickly will you end losing trades?

If you make a purchase, you may want to take the opportunity to diversify your leaders, with energy names such as PXD stocks, an industrial spectacle such as. Deere (DE), or even a slower technology name like the DELL stock.

In any case, you should probably not increase your exposure significantly at current levels.

There is also nothing wrong with standing pat after reducing the exposure earlier in the week. Investors do not always have to trade.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

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


Why this IBD tool simplifies the search for top stocks

Get the next big winning stock with MarketSmith

Best growth stocks to buy and look at

IBD Digital: Unlock IBD’s Premium Stock Lists, Tools, and Analyzes today

Source link

Back to top button