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Dow Jones Futures: Stock Market Rally Breaks; Tesla, Google, Meta Near Trend Line buy points




Dow Jones futures rose slightly overnight, along with S&P 500 futures and Nasdaq futures. The rise in shares largely stopped on Tuesday after going up in the four previous sessions. New Covid cases exceeded 1 million on Tuesday, but vaccinations and milder omicron infections have prevented deaths from increasing.




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Meta stock, Tesla (TSLA), Pioneer natural resources (PXD), Skirt (SAIA) and Google parent Alphabet (GOOGL) is all about trend line buying points.

Trendlines can offer early stock listings, and offer a technical resistance. They can be pulled across falling peaks in a base, breaking the descent to a handle or rebounding from a retreat to a 50-day line or another key level. All of these names except the Tesla stock have trend lines that coincide relatively closely with the 50-day lines, giving another reason to consider them.

Metaplatforms (FB) is clearly above the trend line, while Tesla, Google, Saia and PXD stocks all have hit resistance around these listings.

Tesla stock and Google are on the IBD Leaderboard. Google stock is on IBD Long-Term Leaders. The Tesla stock is at IBD 50.

Dow Jones Futures today

Dow Jones futures rose 0.1% to fair value. S&P 500 futures rose 0.15%. Nasdaq 100 futures rose 0.3 percent.

Futures on crude rose slightly overnight. U.S. crude oil stocks fell 3.1 million barrels in the past week, according to the American Petroleum Institute late Tuesday. The Energy Information Administration will release official stocks of crude oil and refined products and production data on Wednesday morning.

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


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Coronavirus news

Coronavirus cases worldwide reached 283.15 million. Covid-19 deaths peaked at 5.43 million.

Coronavirus cases in the United States have reached 54.14 million, with deaths above 841,000.

New coronavirus cases removed 1 million for the first time on December 28, topping 1.2 million. US Covid cases reach record highs. But hospitalizations have not seen a sharp increase and deaths have not picked up. Credit vaccinations, previous infections and a milder omicron variant.

Stock market rally

The stock market rally had a mixed session. The Dow Jones Industrial Average rose 0.3% in Tuesday’s trading session. The S&P 500 index fell 0.1 percent. Nasdaq composites fell 0.6 percent. Small-cap Russell 2000 also withdrew 0.6%.

The 10-year government interest rate was flat at 1.48%, and continued to trade around its 200-day line. US crude oil prices rose 0.5% to $ 75.98 a barrel, from peaks during the day, but extended a winning streak to five sessions.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 1%, while the Innovator IBD Breakout Opportunities ETF (BOUT) fell 0.3%. iShares Expanded Tech-Software Sector ETF (IGV) and VanEck Vectors Semiconductor ETF (SMH) both fell 1%.

The SPDR S&P Metals & Mining ETF (XME) fell 0.75% and the Global X US Infrastructure Development ETF (PAVE) rose 0.1%. The US Global Jets ETF (JETS) rose 0.6 percent. SPDR S&P Homebuilders ETF (XHB) rose 0.3%. Energy Select SPDR ETF (XLE) fell 0.1%, with the PXD stock as a component. The Financial Select SPDR ETF (XLF) was just above breakeven. Health Care Select Sector SPDR Fund (XLV) fell 0.3%.

ARK Innovation ETF (ARKK) reflected more speculative history stocks, falling 1.8% and ARK Genomics ETF (ARKG) 2.1%. The Tesla share is still number 1 across ARK Invest’s ETFs.


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Shares At Trend Lines

Meta Platforms, formerly Facebook, rose 4 cents to 346.22, giving up intraday gains. On Monday, the FB share rose 3.3% to 347.87, withdrawing from the 50-day and 200-day lines. It broke over a trend line that started near the top of the beginning of September, with 344.46 also a relevant point. The meta-stock is still close to these levels, with the short-term high on November 22 at 353.83 another potential resistance area. The FB share is some distance from the official buy point of 384.43.

The PXD stock fell 1.1% to 183.72, barely holding the 50-day line. Shares turned lower after only topping a trend line during the day. Pioneer shares rose 3.2% on Monday to 185.77, reversing higher and taking back their 50-day as recurring crude oil prices lifted many slate games. The PXD stock has an official buy point of 196.74.

Google shares fell 0.8% to 2,933.74 On Monday, shares rose 0.7%, closing mainly right on a short trend line. The GOOGL stock has a flat buying point of 3,019.43, according to MarketSmith.

The Saia share fell 0.9% to 330.19, just around a trend line. On Monday, shares rose 2.9% to 333.05, and declined from the 50-day line, as more truck shares went into higher gear. The Saia share has recovered sharply from the lowest on December 20 at 288.23. It should have a proper base with a purchase point of 365.60 after this week.

Tesla fell 0.5% to 1,088.47 after reaching 1,119 during the day. It follows a four-day, 22% increase to 1,093.24, takes the 50-day line again and stops right around a trend line. Ideally, the TSLA stock will take a breath on the ground and form a handle. But a convincing move over Tuesday’s high intraday would offer a clear trend line break. The Tesla stock has a double-bottomed base with a buying point of 1,202.05.

Market Rally Analysis

The rise in shares stopped on Tuesday, with Nasdaq down slightly after rising 1,000 points from the bottom on December 20 to the end of Monday. The S&P 500 is at a record high while the Nasdaq and Dow Jones are close.

Russell 2000 took back its 200-day line Tuesday morning, but then fell back. It is a reflection of the overall market breadth – improvement over the last week, but still a long way to go.

Losers trumped the winners, by almost 2-to-1 on the Nasdaq. New highs topped new lows on the NYSE and Nasdaq.

A market break to end the year would allow equities to consolidate recent gains, perhaps setting up new listings for 2022 as large institutions and overall volume returns. Stocks like Tesla or Google would look even more impressive by breaking through a trend line after hitting resistance for a few days. Of course, just because a stock is resisting does not mean it will break through.

Travel and cargo freight shares are leading sectors, a particularly positive sign as the market upswing is coping well with the omicron Covid wave. Chips and house building names are also strong. The medical sector has quietly been a leading sector in recent weeks. Energy reserves are in the process of reshaping. The software still seems damaged overall, but a few work well.


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What to do now

In the last four-day run-up, a number of stocks have cleared buying points during the last sessions, which provides a chance to increase the exposure. A few more topped buy points in Tuesday’s mixed action.

If you have already added significant exposure in recent days, you may want to pat New Year. It is not necessary to make massive new efforts in an environment with light volume. The start of a new year can be bullish. But a steep retreat, driven by tax sales, would not be surprising either.

Work with your watchlists. Build a diverse list of potential winners. The new year will offer far more opportunities for big wins than the last three days of 2021.

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.

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