Dow Jones Futures: Stock Market Rally Higher, Should You Jump In? Google, Microsoft Flash Buy Signals
Dow Jones futures tipped higher Tuesday night, along with S&P 500 futures and Nasdaq futures. Previously, the stock market rally attempt continued with strong gains for a second session in a row, as fears of the omicron variant fade.
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The Nasdaq and S&P 500 had their best gains since March, when Apple stock, Nvidia (NVDA), Tesla (TSLA), Microsoft (MSFT) and Google parent Alphabet (GOOGL) helped lead the way. apple (AAPL), Tesla and Nvidia shares had the larger percentage gains, but MSFT shares and Google offered listings.
It was a broad-based advance far beyond technical titans. Energy names were among the strongest. Shipping-related companies were strong. Retail, finance and housing-related players had solid gains.
While aggressive traders could choose to take some pilot positions, the attempt at a stock market rally has not yet been confirmed.
Earnings after working hours
After the end, Toll Brothers (To land SentinelOne (S) reported earnings.
Toll Brothers revenues beat a solid outlook, a positive sign for the now leading housing sector. The TOL share rose a fraction in expanded trading. The shares of the luxury builder rose 0.55% to 71.24 on Tuesday, slightly expanding from a buy point of 67.43.
SentinelOne shares fell overnight despite better-than-expected Q3 results and revenue guidance. The S-share jumped 13% on Tuesday, but the cyber security company has plummeted from the tops in early November.
Also moving late: Technical service company Epam systems (EPAM) jumped on the word that it will join the S&P 500. The EPAM stock is set to rise above its 50-day moving average and break a trend line.
Tesla, Google, Microsoft and Nvidia shares are on the IBD Leaderboard. The Google stock is on SwingTrader. Google, Epam Systems and Microsoft shares are on IBD Long-Term Leaders. The Nvidia and Tesla shares are on IBD 50. The GOOGL share was also Dagens IBD share.
The video embedded in this article discussed Tuesday’s positive market action and analyzed Silicon Motion (SIMO), society (CIVI) and Google shares.
Dow Jones Futures today
The Dow Jones futures were slightly above fair value. S&P 500 futures rose 0.2% and Nasdaq 100 futures rose 0.2%.
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
Attempts at stock exchange rally
The stock market rise followed up Monday’s rise with an even stronger rise.
The Dow Jones Industrial Average rose 1.4% in Tuesday’s trading session. The S&P 500 index rose 2.1 percent. Nasdaq composition rose 3 percent. Small-cap Russell 2000 increased 2.3%.
Apple shares rose 3.5%, reaching record highs. The Dow Jones tech titan expands from any point of purchase. Nvidia shares rose 8% after rising from just over the 10-week line on Monday. But the stock is 16% over its 10 weeks now.
Tesla shares rose 4.2% after surviving a 50-day line test on Monday. But the EV giant is still below its 21-day line and possible trend lines. China Passenger Car Association will launch Tesla China sales and exports Wednesday morning, along with industry-wide electric cars and total car sales.
Crude oil futures rose 3.7% to $ 72.05 a barrel after jumping 5% on Monday. The 10-year government interest rate rose 5 basis points to 1.48%. The two-year government interest rate also rose 5 basis points to 0.69%, the highest since March 2020.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 4.4%, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 2.8%. iShares Expanded Tech-Software Sector ETF (IGV) rose 3.8%. The MSFT share is an important IGV component. VanEck Vectors Semiconductor ETF (SMH) rose 4.85%. The NVDA share is a central SMH holding.
The SPDR S&P Metals & Mining ETF (XME) rose 2.2% and the Global X US Infrastructure Development ETF (PAVE) 1.75%. The US Global Jets ETF (JETS) rose 0.05 percent. SPDR S&P Homebuilders ETF (XHB) rose 1.3%. Energy Select SPDR ETF (XLE) rose 2.3% and Financial Select SPDR ETF (XLF) rose 1.8%.
ARK Innovation ETF (ARKK) reflects more speculative history stocks, up 5.4% and ARK Genomics ETF (ARKG) 7.7%, after both reached a 52-week low recently. The Tesla share is number 1 across ARK Invest’s ETFs.
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Google shares
Google stock rose 1.9% to 2,945.39, rebounding from its 50-day moving average, removing its 21-day line and breaking a short trend line. A 50-day line-up can be a good time to buy a long-term leader.
The GOOGL share has also regained the old buying point of 2,925.17 with flat base. It is unclear whether investors should focus too much on that listing anymore, but that is a good sign.
Finally, the Google stock has a three-week tight pattern with a listing of 3,019.43.
Microsoft action
Microsoft shares rose 2.7% to 334.92, breaking a short downtrend and moving above its 21-day line. It comes a day after it returned from its 50-day / 10-week lines. With 3.3% above its 10-week line, investors could choose to take a position in the MSFT stock.
Stock market rally analysis
After Monday’s solid session, the Nasdaq had its best percentage increase in nine months, skipping the 50-day moving average and 21-day line. So, stock market correction over? Not so fast. Historically, some of the market’s best days are in corrections or bear markets.
It is still only the second day of a stock market rally attempt on the S&P 500 and Nasdaq. It was the fourth day of a rally attempt on the Dow Jones. Dow’s price gain was strong enough for a follow-up day to confirm the new rally, but the NYSE volume fell vs. Monday. So Tuesday was not a Dow Jones follow-up day.
The volume also fell on the Nasdaq.
Nevertheless, it was a positive session. The winners easily passed the losers for a second session in a row. New highs trumped new lows, especially on the NYSE.
The S&P 500, after regaining its 50-day line on Monday, rose above its 21-day line on Tuesday and broke a downward trend. The Dow Jones climbed over its 50-day and a trend line. Russell 2000 moved to its 200-day line.
As the indices indicated, the market showed broad gains.
Homebuilders continue to do well. The 10-year government interest rate, which did not rise much, probably helped. Energy kept going. Offshore shipping companies and trucking companies did well. Many chip and software names had big wins, but many of these charts look damaged.
Although a small study suggested that the Covid variant partially escapes the Pfizer coronavirus vaccine, investors are more confident that the omicron variant is not a serious threat. This is positive for energy stocks. That should be good news for travel stocks, even if they closed mixed after the upturn on Monday. If omicron is not going to derail the economic recovery, the Federal Reserve has signaled that it could accelerate the bond tapering, perhaps as soon as next week’s political meeting.
Ultimately, the stock market will do what it is supposed to do.
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What to do now
If you’ve added some exposure during the last couple of sessions, you’ll probably be up for these positions. But be ready to scale out quickly. There is a reason why IBD is looking for a follow-up day to confirm a new rally attempt. After a market sale, it is not surprising to see stocks rise for a day or two, often sharply.
Investors can start testing the rally trial. One argument for stepping on the toes of a name like Microsoft or Google stock is that they are unlikely to suddenly fall 5%, 10% or more. There is also nothing wrong with standing pat for the time being.
You will see real evidence of institutional support for a new meeting before you commit heavily. If the stock market rise ends up having a follow-up day and runs for several weeks, investors will have many opportunities.
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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