Market rally contains most recent gains
Dow Jones futures edged lower after hours, along with S&P 500 futures and Nasdaq futures after a modest decline for the rally. Two recent IPOs, Mobileye and Sprinker, moved overnight on news.
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The major indexes pulled back on Monday, with the Nasdaq and S&P 500 turning negative as AAPL stock turned slightly lower. But they held on to the bulk of last week’s gains.
apple (AAPL) reversed slightly lower following the unveiling of the long-awaited Vision Pro mixed-reality headset,
Tesla (TSLA), Fortinet (FTNT), DexCom (DXCM), Shopify (SHOP) and Wing stop (WING) is in buy territory.
Bitcoin plunged as the SEC filed charges against Binance, the world’s largest cryptocurrency exchange, and co-founder Changpeng Zhao, for alleged securities violations and illegal operations in the US COIN stock, and Bitcoin miners such as Marathon Digital also fell. The SEC has threatened action vs. Coin base (COIN).
IPOs move late
Late Monday, marketing software maker Sprinkler (CXM) reported a better-than-expected profit and revenue gain in the first quarter. CXM shares rose more than 3% in late trading. The sprinkler stock, an IPO in 2021, had closed just above a brief consolidation that can be seen as a handle to an eight-month consolidation.
Meanwhile, Mobileye (MBLY) fell 3.5% in late trade, signaling a pullback below the 50-day. The self-driving systems company said it will sell 35 million shares on behalf of Intel (INTC), which spun off Mobileye in an IPO last year. MBLY shares fell 2.7% to 42.37 on Monday. Shares are set to fall below their 50-day line.
Tesla stock is on the IBD Leaderboard, with Wingstop on the Leaderboard watch list. FTNT stock was added to SwingTrader on Monday and is on the IBD Long-Term Leaders. WING Stock and Fortinet are on the IBD 50. Fortinet was Monday’s IBD Stock Of The Day.
The video embedded in this article discusses Monday’s market action and analyzes FTNT stock, Samsara (IOT) and Fluence energy (FLNC).
Dow Jones Futures today
Dow Jones futures fell 0.1% relative to fair value. S&P 500 futures lost 0.1% and Nasdaq 100 futures fell 0.1%.
Keep in mind that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular session.
Apple Vision Pro
Apple unveiled the long-awaited mixed reality headset, the Vision Pro, at its annual Worldwide Developers Conference. Aimed at gaming, communication and productivity use, the glasses combine virtual and augmented reality. The $3,499 price tag, higher than speculation for around $3,000, may deter potential buyers.
In the past, Apple has unveiled some new Mac computers and delivered updates on the latest operating systems for iPhone, iPad, Mac, Apple TV and Apple Watch.
Apple shares closed down 0.8% at 179.58 after hitting an intraday high of 184.95 ahead of the Vision Pro unveiling.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
Stock market rally
The stock market recovery showed generally modest declines on Monday, after the Nasdaq pulled back from a solid morning rally.
The Dow Jones Industrial Average fell 0.6 percent in Monday’s trading. The S&P 500 retreated 0.2%. The Nasdaq composite fell 0.1 percent. The small-cap Russell 2000 fell 1.3%.
US crude oil prices rose 0.6% to $72.15 a barrel, well off intraday levels. Saudi Arabia said it would cut production by 1 million barrels per day in July.
The 10-year government rate was unchanged at 3.69%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.85%. The iShares Expanded Tech-Software Sector ETF ( IGV ) climbed 0.7%, with FTNT stock an IGV share. VanEck Vectors Semiconductor ETF ( SMH ) fell 1.25%.
ARK Innovation ETF ( ARKK ), reflecting more speculative history stocks, rose 1.1% and ARK Genomics ETF ( ARKG ) rose 0.75%. Tesla stock is the No. 1 holding across Ark Invest’s ETFs. COIN stocks and Shopify are also top 10 holdings for Cathie Wood’s Ark ETFs.
The SPDR S&P Metals & Mining ETF ( XME ) fell 0.8%. The US Global Jets ETF (JETS) fell 0.2 percent. The SPDR S&P Homebuilders ETF ( XHB ) was down nearly 1%. The Energy Select SPDR ETF (XLE) fell 0.7% and the Health Care Select Sector SPDR Fund (XLV) rose 0.4%.
The Financial Select SPDR ETF (XLF) fell 0.5 percent. The SPDR S&P Regional Banking ETF (KRE) fell 2.5 percent.
Top five Chinese stocks to watch now
Shares in buying areas
Tesla shares rose 1.7% to 217.61 on Monday after hitting a 2023 intraday high of 221.29. The shares are still in the area from 207.79 buy points, but are at the upper end of the 5% hunting zone. Tesla stock broke out Friday from what is either a cup or double bottom. The EV giant has advanced on above-average volume for six straight sessions.
FTNT shares jumped 4.6% to 71.27, reclaiming a 69.07 buy point from a flat V-shaped base, according to MarketSmith analysis. The volume was heavy. Fortinet initially broke out on May 19, but soon reversed lower to test the 50-day line before recovering.
DXCM shares climbed 1.7% to 124.66 on Monday, also hitting the 126.44 flat-base buy point intraday. Shares retook the 50-day line late last week and broke a short trend line. Dexcom stock topped a short-term high Monday.
SHOP stock rose 2.8% to 59.92, retreating from its 21-day line. That makes for an early entry, though Shopify stock has teased aggressive buy points several times over the past few weeks, only to quickly stumble. The shares are working on a possible base after a sharp earnings gap at the beginning of May.
WING stock fell 3%% to 203.69, rebounding from the 50-day and 10-week lines, just above an earlier consolidation. Shares also retook their 21-day line and broke a downtrend line. The volume was light but not terrible. Investors can use Monday’s move as a buy signal. Wingstop stock is on track to have a flat base, part of a base-on-base pattern, by the end of the week.
Market rally analysis
The rise in the stock market saw a crash on Monday, but seemed normal after last week’s big rises. The Nasdaq led at first, but turned red as Apple shares turned lower. So did the S&P 500.
The Dow Jones retreated modestly but remains above its 50-day line.
The Russell 2000 fell solidly, closing just below the 200-day mark. It is a reflection of weak width. After winners dominated at the end of last week, losers won easily on Monday.
The Nasdaq 100 rose 0.1%, off session highs. It is still 9.3% above the 50-day mark.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) also rose 0.1%.
The Invesco S&P 500 Equal Weight ETF ( RSP ) fell 0.3% but remains above its 50-day line and 200-day. Holding that level and eventually heading towards 2023 highs will be important.
The market rally has been led by tech titans and AI stocks, including many chip plays. While some continued to rise on Monday, the Apple stock reversal and recent pullback in chips isn’t entirely unwelcome.
While the market breadth was negative on Monday, some sectors showed or hinted at strength.
That includes cyber security, with FTNT stock just one of several top performers. Several restaurant names, including WING stock, are still on the menu. Medical products and systems that DXCM stocks are at or near listings. Housebuilders and, to a lesser extent, travel stocks are doing well.
Time the market with IBD’s ETF market strategy
What to do now
After last week’s bullish, broad market rally, investors should look to increase exposure gradually.
Several stocks flashed buy signals Monday, though it wasn’t a flood given Monday’s slightly lower action.
Do not force yourself into heavy exposure. Let the market rally pull you in. If the market continues to improve and top stocks are flashing buy signals, you can add to your portfolio over time. If the market starts to waver, you should keep an eye on the exit.
Have the watch lists ready. Finding new leaders and spotting early contributions is key.
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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