Dow Jones Futures: Stock Market Rally Has Sleepily Seated; Tesla finds support when electric car rivals rise

Dow Jones futures changed little overnight, along with S&P 500 futures and Nasdaq futures. The rise in the stock market slowed to small losses on Thursday, but is still in good shape.

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The Tesla stock reduced losses after finding key support on its 50-day intraday line. Meanwhile, EV rivals had a big day, led by Chinese startups Nio (NIO), Xpeng (XPEV) and Li Auto (LI) shot up 10% to 15% when US listed Chinese stocks and hard-hit growth names picked up sharply again. China’s electric car giant WORLD (BYDDF) jumped 4.3%. Lucid Motors (LCID) and Rivian Automotive (RIVN) also made solid progress.

While Tesla (TSLA) lagged behind on Thursday, leading the EV charge in a powerful four-day rally after just undercutting a previous base. The Tesla stock is close to a trend line buying point. XPEV shares and Li Auto undoubtedly made aggressive entries in the new consolidation.

Early next week, perhaps over the weekend, Tesla will report global production and delivery data for the fourth quarter, while Nio, Xpeng and Li Auto will provide delivery figures for December. BYD will probably publish December sales later this week.

The Tesla stock is on the IBD Leaderboard and IBD 50.

Dow Jones Futures today

Dow Jones futures were reduced in fair value. S&P 500 futures and Nasdaq 100 futures were unchanged.

The US stock markets are open for a full trading session on New Year’s Eve. Some exchanges around the world will be closed, including Germany’s, while others will have half – day sessions early. So the trading volume, which is already low, could be directly anemic to end 2021.

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

Coronavirus news

Coronavirus cases worldwide reached 286.72 million. Covid-19 deaths peaked at 5.44 million.

Coronavirus cases in the United States have reached 55.2 million, with deaths above 845,000.

While new cases have exploded around the world, the more contagious omicron variant has only a modest impact on hospital admissions without increasing the number of deaths.

Stock market rally

The rise in shares traded modestly higher in large parts of Thursday’s session, but withdrew in the last hour.

The Dow Jones Industrial Average fell 0.25% in Thursday’s trading session. The S&P 500 index rose 0.3 percent. The Nasdaq composite lost 0.2 percent. Small-cap Russell 2000 achieved a fractional gain.

The 10-year government interest rate fell 3 basis points to 1.51%. Crude oil futures rose 0.6% to $ 76.99 a barrel, extending the victory strike to seven sessions. But the prices of natural gas fell sharply.

Among the best ETFs, Innovator IBD 50 ETF (FFTY) fell 0.8%, while Innovator IBD Breakout Opportunities ETF (BOUT) fell 0.3%. iShares Expanded Tech-Software Sector ETF (IGV) rose 0.1%. VanEck Vectors Semiconductor ETF (SMH) fell 1.1%.

SPDR S&P Metals & Mining ETF (XME) and Global X US Infrastructure Development ETF (PAVE) retreated 0.6%, along with SPDR S&P Homebuilders ETF (XHB) and Energy Select SPDR ETF (XLE). Financial Select SPDR ETF (XLF) fell 0.1%. The US Global Jets ETF (JETS) closed just below breakeven. Health Care Select Sector SPDR Fund (XLV) rose 0.2%.

ARK Innovation ETF (ARKK) reflects more speculative history stocks, up 3.1% and ARK Genomics ETF (ARKG) 3.5%, as declining highly valued growth names had a strong increase. Tesla is still number 1 across ARK Invest’s ETFs. ARK also owns some BYD and XPEV shares.

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Tesla shares

Tesla shares fell to their 50-day line on Thursday morning, on the news that the EV giant recalled almost 500,000 vehicles. But the stock turned around and briefly turned positive before closing down 1.5% at 1,070.34. The TSLA stock has traded close in recent days, and is working on a possible handle when it meets resistance at a trend line. Moving above Tuesday’s high of 1119 would offer an early entry. The Tesla stock has an official buy point of 1,202.05 from a double-bottom base, according to MarketSmith analysis.

The TSLA stock reached a recent low of 886.12, more than wiping out a 38% gain, but then rose more than 23% to the end of December 27th.

Tesla is likely to release fourth-quarter delivery figures on Monday, January 3, but they may be available at any time from January 1 to January 5.

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Other EV shares

Meanwhile, the Nio share shot up 15% on Thursday in its heaviest volume in nine months. But that is after sinking to a low of 14 months on Wednesday. Nine are still well below their 50-day and 200-day lines.

Xpeng shares rose 10%, while LI shares rose 8.6%, and both regained their 50-day lines. These can be seen as aggressive entries in new consolidations alongside previous failed outbreaks. But the risk is high with Xpeng and Li Auto likely to release December delivery figures before Monday’s opening, along with Nio.

The BYD share fell by 4.3%, just below a short trend line, and took back its 21-day line. The 50-day line would be the next hurdle.

The Lucid share climbed 4.8%, but is also below the 21- and 50-day lines. Rivian shares, which do not yet have a 50-day line, rose 4.1%. RIVN stays under its 21 days.

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Market Rally Analysis

The market upturn faded from modest gains to small losses, but it’s hard to get too excited. The Dow Jones and S&P 500 are at record highs.

Nasdaq is not far away. On Thursday, the Nasdaq 100 fell 0.3%, which is behind the composition, as the Tesla stock, apple (AAPL), Microsoft (MSFT), Nvidia (NVDA) and Google parent Alphabet (GOOGL) all edges lower. But these megacaps have been among the big winners in 2021, and they all still look healthy

Nasdaq and Nasdaq 100 are traded close to peaks, with many other leading stocks following and cut-off handles. Setting up potential purchases in low volume at year-end trading is close to ideal.

Russell 2000 rose slightly, but once again failed to close above the 200-day line. Continued improvement in breadth will strengthen confidence in the current market upswing.

Many of Thursday’s big winners, including EV games like Nio and Lucid stock as well as ARK-type history stocks, are not in position right now. But it’s good to see some signs of life in this part of the market.

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What to do now

The stock market rise is in relatively good condition as the year draws to a close. The coming days are a good time to evaluate your trades for 2021, both good and bad. Did you take any big winners? Did you hold on to stocks for too long, gave up gains or suffered large losses? Even modest improvements in your trading – identifying one model book stock, reducing losses – can significantly improve your performance in 2022.

In the meantime, you can build your watch lists for the new year. Throw a wide net. Some winners from the last year will go big races, but many will not.

Be flexible, be vigilant and be determined.

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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