Dow Jones Futures: Stock Market Rally Holds Gains As Square, Sea, Chipotle Flash Buy Signals; Tesla Faces Key Test
Dow Jones futures tilted higher early Wednesday morning, along with S&P 500 futures and Nasdaq futures. The stock market rally took a breather Tuesday, edging lower after strong gains over the past few sessions.
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Royal Caribbean (RCL), Carnival (CCL) and Norwegian Cruise Line (NCLH) rallied late on a Bloomberg report that the Centers for Disease Control and Prevention recommended that cruises could resume this summer with certain restrictions. That followed reports indicating that cruise line operators wouldn’t have to require vaccinations for travelers.
Carnival, NCLH and RCL stock rose 2%-3% overnight, adding to gains Tuesday and over the past several sessions. All three stocks are approaching possible buy points.
Carnival earnings are due Wednesday morning.
Breakouts Hold, New Buy Signals
Microsoft (MSFT), Facebook (FB) and Google parent Alphabet (GOOGL) continued to hold in buy range Tuesday after Monday’s breakouts.
Micron Technology (MU), Square (SQ), Sea Limited (SE), Chipotle Mexican Grill (CMG) and Yeti Holdings (YETI) all flashed buy signals, at least intraday.
Tesla (TSLA) is hitting resistance after a recent run. But Tesla stock and other highly valued growth names are showing signs of life.
Microsoft and Google stock are on IBD Leaderboard. GOOGL stock is on SwingTrader. Microsoft stock is on IBD Long-Term Leaders. Yeti stock is on the IBD 50 list. Google and Micron stock are on the Big Cap 20.
Dow Jones Futures Today
Dow Jones futures rose 0.1% vs. fair value. S&P 500 futures advanced and Nasdaq 100 futures were up less than 0.1%.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live.
Coronavirus News
Coronavirus cases worldwide reached 133.05 million. Covid-19 deaths topped 2.88 million.
Coronavirus cases in the U.S. have hit 31.56 million, with deaths above 570,000.
California plans to lift most coronavirus restrictions by June 15, but keep its mask mandate.
Stock Market Rally
The stock market rally had a slightly down session that didn’t alter the bullish trend.
The Dow Jones Industrial Average dipped 0.3% in Tuesday’s stock market trading. The S&P 500 index lost 0.1%. The Nasdaq composite edged down less than 0.1%.
The 10-year Treasury yield fell 6 basis points to 1.66%.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Tech Titans Hold Up
Microsoft stock dipped 0.5% to 247.86. On Monday, MSFT stock rose 2.8% to 249.07, clearing a 246.23 flat-base buy point, according to MarketSmith analysis.
Google stock slipped 0.4% to 2,209.26. GOOGL stock on Monday popped 4.2% to 2218.96, also clearing a flat base, with a 2145.24 entry. Both Microsoft and Google stock flashed early entries last week.
Facebook stock retreated 0.9% to 306.26. FB stock on Monday climbed 3.4% to 308.91, above a 299.81 handle buy point from a six-month consolidation.
Tesla Stock
Tesla stock inched up 0.1% to 691.92. On Monday, TSLA stock rose 4.4% to 691.05 following record delivery figures. But that was near session lows after reaching 708.16 intraday, hitting resistance at its 10-week moving average. Tesla stock also needs to get above its March short-term highs and its 50-day line before investors should pay close attention to the huge 2020 winner.
Top ETFs
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) edged up 0.2%, while the Innovator IBD Breakout Opportunities ETF (BOUT) dipped 0.5%. The iShares Expanded Tech-Software Sector ETF (IGV) advanced 0.6%, with MSFT stock the top holding. The VanEck Vectors Semiconductor ETF (SMH) sank 1.4% after several strong gains.
SPDR S&P Metals & Mining ETF (XME) retreated 1% and Global X U.S. Infrastructure Development ETF (PAVE) lost 0.8%. U.S. Global Jets ETF (JETS) climbed 0.8%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) popped 1.8% and ARK Genomics ETF (ARKG) was flat. Tesla stock is the biggest holding across ARK Investments’ ETFs. While TSLA stock was quiet Tuesday, it has rebounded over the last several days, while many other ARK holdings also are perking up, including Roku (ROKU), Baidu (BIDU) and Square stock.
Some of Tuesday’s gains in ARK-type stocks might reflect declining Treasury yields. The rising 10-year Treasury yield has weighed on highly valued growth stocks in the past few months.
Stocks In Buy Range
Yeti stock rose 3% to 75.06, reaching 78.40 intraday. That briefly cleared a 76.87 handle buy point. YETI closed right at a downward-sloping trend line, offering a more-aggressive entry. The maker of premium coolers, drinkware and now luggage reclaimed its 50-day line last week. Yeti stock was Tuesday’s IBD Stock Of The Day.
Square stock climbed 2.85% to 236.50, reclaiming its 50-day line and breaking a downtrend. That could offer an early entry for SQ stock. The official buy point is 283.29.
Micron stock dipped 0.3% to 93.49 after hitting 96.10 intraday, briefly clearing 95.85 entry from a short consolidation. MU stock has been actionable from the 10-week line following the memory chip giant’s earnings and guidance last week. Micron stock is just 4.7% above its 10-week line.
SE stock popped 5.2% to 247.03, retaking its 50-day line. Depending on where you draw it, Sea Ltd. shares also cleared a downward-sloping trend line. This can be an early entry in SE stock, which has an official buy point of 285.10.
Chipotle stock rallied 2.4% to 1,487.48, rebounding from its 50-day line and breaking a downtrend. That’s offering an early entry, with the official buy point at 1,565.01. CMG stock had its best close since Feb. 12, but needs to move a bit higher to get above its March peaks. Investors should note that Chipotle earnings are in two weeks.
Market Rally Analysis
The stock market rally closed little changed Tuesday after trading in a tight range. After back-to-back S&P 500 gains of more than 1% to record highs and the Nasdaq jumping more than 1.5% for three straight sessions to clear key levels — with a number of strong breakouts — a quiet session is just fine.
A stock market rally pause for a few days would let more handles form on bases, while recent breakouts could consolidate gains. As long as the Nasdaq holds above recent highs and especially the 50-day line, then the bullish trend remains intact.
Stock market rally leadership remains fairly broad-based, with some tech titans, chip, commodity, industrial travel and some retail names doing well.
Some highly valued growth names such as 10X Genomics (TXG), Sea Ltd. or Square stock are shaping up. More are like Tesla stock, still below 50-day lines, but at least early repairs are underway. Of course, just as some home improvement projects go unfinished, there’s no guarantee that the next chapter for story stocks will be a happy one.
Investors should be participating in this market rally. Don’t expect a repeat of the April-September run, but there are reasons to be confident now. As you expand your holdings and revise your watchlists, try to have diversity within your leading stocks. That will help you avoid big portfolio moves from group sell-offs, while keeping you in tune with the market and leading stocks.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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