Dow Jones Futures: Tesla, Nvidia Lead 7 Stocks In Buy Zones; Bitcoin Soars As Coinbase IPO Looms
Dow Jones futures were little changed Tuesday night, along with S&P 500 futures and Nasdaq futures after a mixed session for the stock market rally. Investors are looking ahead to JPMorgan and other big bank earnings Wednesday morning, while cryptocurrency exchange Coindesk is set to debut with Bitcoin surging to a record high.
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On Tuesday, the Dow Jones fell slightly after U.S. health regulators called for a pause in administering the Johnson & Johnson coronavirus vaccine after it was linked to a small number of cases of a rare type of blood clotting. But the Nasdaq composite rose sharply, helped by lower Treasury yields. The Nasdaq 100 hit new highs, fueled by Apple (AAPL), Amazon.com (AMZN), Microsoft (MSFT), Adobe (ADBE) and especially Tesla stock.
Apple stock and Amazon are moving up the right side of bases while MSFT stock is at the edge of a buy zone. Tesla (TSLA) flashed an early buy signal, along with Adobe stock and vaccine play Maravai LifeSciences (MRVI).
Roblox (RBLX), Nvidia (NVDA), Atlassian (TEAM) and Shutterstock (SSTK) broke out Tuesday.
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Key Earnings
JPMorgan Chase (JPM), Goldman Sachs (GS)Â and Wells Fargo (WFC) all report Wednesday. Lovesac (LOVE) also is on tap, while Coinbase (COIN) will go public with Bitcoin above $63,000.
JPM stock, Goldman and Wells Fargo all have buy points from tight patterns. LOVE stock rebounded bullishly from key support last week.
Wells Fargo, Roblox, Microsoft and Nvidia stock are on IBD Leaderboard. Microsoft and Adobe stock are on the IBD Long-Term Leaders list, while TEAM stock is on the Long-Term Leaders watchlist. LOVE stock is on the IBD 50. SSTK stock was Tuesday’s IBD Stock Of The Day, while Tesla was Monday’s.
Coinbase IPO
Coinbase is going public via a direct listing as opposed to a traditional initial public offering. It’s the first cryptocurrency exchange to go public. Coinbase is the largest U.S. cryptocurrency exchange, trading some 50 different digital assets. Coinbase is significantly profitable and has seen huge growth as interest in Bitcoin and other digital assets booms. Q1 revenue of $1.8 billion exceeded full-year 2020 revenue of $1.3 billion.
The Nasdaq late Tuesday announced a $250 reference price for the Coinbase stock direct listing. That would give Coinbase a $65 billion valuation.
In a virtuous circle, the Bitcoin price has buoyed Coinbase, while Coinbase IPO buzz is buoying Bitcoin.
The Bitcoin price topped $63,000 for the first time on Tuesday, reaching $63,774.39 intraday. Bitcoin was trading above $63,500 Tuesday night, up 6% vs. 24 hours earlier.
Bitcoin-related plays such as Grayscale Bitcoin Trust (GBTC) and Riot Blockchain (RIOT) were big winners Tuesday.
Dow Jones Futures Today
Dow Jones futures about even with fair value. S&P 500 futures were little changed and Nasdaq 100 futures edged lower.
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.
J&J Vaccine
The FDA and CDC on Tuesday recommended a temporary halt to giving the J&J vaccine. The vaccine has been linked to six serious cases of an extremely rare and severe type of blood clotting, including one fatality, after 6.8 million shots. All of the cases involve women aged 18-48.
The FDA said that the suspension call may only last a few days, indicating that its main goal was to make sure health care providers are aware of how to treat this rare clotting, as opposed to most blood clots. But there is a concern that even a brief suspension could scare more people from getting the J&J vaccine, or any alternative.
The J&J vaccine has proved popular because it requires just one shot. It’s easier to store than the Pfizer (PFE) and Moderna (MRNA) vaccines, and many states used the J&J vaccine for reaching rural areas.
JNJ stock fell 1.3% on Tuesday, well off morning lows. Pfizer stock gained 0.5% while partner BioNTech (BNTX) climbed 6.7%, nearing a buy point. Moderna stock popped 7.4% to just above its 50-day line. Novavax (NVAX), which is close to seeking FDA approval for its vaccine, leapt 11%. AstraZeneca (AZN), which also has been associated with an extremely low risk of clotting, dipped 0.5%.
After the close, Pfizer said it can deliver 10% more doses to the U.S. by the end of May than it previously agreed to. Moderna said its vaccine is 90% effective six months after the second dose. It also said an updated version of its vaccine is effective vs. the South African variant.
Coronavirus News
Coronavirus cases worldwide reached 138.01 million. Covid-19 deaths topped 2.97 million.
Coronavirus cases in the U.S. have hit 32.07 million, with deaths above 577,000.
Stock Market Rally
U.S. Stock Market Today Overview |
||||
|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 33679.44 | -65.96 | -0.20 |
| S&P 500 | (0S&P5) | 4141.66 | +13.67 | +0.33 |
| Nasdaq | (0NDQC ) | 13996.10 | +146.10 | +1.05 |
| Russell 2000 | (IWM) | 221.14 | -0.58 | -0.26 |
| IBD 50 | (FFTY) | 45.75 | +0.17 | +0.37 |
Last Update: 4:14 PM ET 4/13/2021 |
||||
The stock market rally had a mixed session but closed near session highs.
The vaccine suspension news for Dow Jones component J&J didn’t help the blue-chip index. Travel-related plays also fell on the J&J news and because American Airlines (AAL) gave somewhat weak preliminary figures.
The Dow Jones Industrial Average dipped 0.2% in Wednesday’s stock market trading. The S&P 500 index rose 0.3%. The Nasdaq composite jumped 1.05%. The small-cap Russell 2000 fell 0.3%, a little further below its 50-day line but off morning lows.
The 10-year Treasury yield fell 5 basis points to 1.62%. The March consumer price index came in hotter than expected, but less than feared. A 30-year Treasury action went well.
Apple stock rose 2.4% to 134.43, continuing its low-volume move up the right side of its base. Apple announced an April 20 event, where it’s expected to show off new iPad tablets and other products. Microsoft stock rose 1% to 258.49, its fifth straight up session and just within the 5% chase zone. Amazon stock edged up 0.6%, but hit resistance just below an early entry point.
Top ETFs
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) climbed 0.35%, while the Innovator IBD Breakout Opportunities ETF (BOUT) dipped 0.9%.
The iShares Expanded Tech-Software Sector ETF (IGV) popped 1.7%. Microsoft stock is the No. 1 IGV holding, but software overall has been coming back.
The VanEck Vectors Semiconductor ETF (SMH) edged down 0.2%. NVDA stock is a major component, but many chipmakers and chip-gear plays have been pausing and drifting lower over the past several sessions.
SPDR S&P Metals & Mining ETF (XME) was just below break-even and Global X U.S. Infrastructure Development ETF (PAVE) lost 1%. U.S. Global Jets ETF (JETS) descended 0.3%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) jumped 3% and ARK Genomics ETF (ARKG) 4.2%. Tesla stock is the No. 1 holding across ARK Investments’ ETFs.
Nvidia, Roblox Break Out
Nvidia stock rose 3.1% to 627.18, clearing a 615 cup-base buy point, rising in heavy volume for a second straight session. NVDA stock jumped 5.6% on Monday on bullish first quarter guidance and the unveiling of a server processor chip, taking on Intel (INTC) and AMD (AMD). After running up so much in the past few weeks, NVDA stock could pull back here.
Roblox stock surged 9.4% to 82.05, clearing a 79.20 IPO base buy point, according to MarketSmith analysis. Volume was above average and the heaviest in several weeks as Roblox and toy giant Hasbro (HAS)Â announced a partnership. RBLX stock offered an early entry in the prior few sessions from a pseudo-handle. After such a big run-up, investors might want to wait for RBLX to pull back somewhat before starting a position.
Shutterstock stock leapt 6% to 98.99, breaking out of a double-bottom base with a 95.39 buy point. The digital image company’s earnings have surged 88%, 176% and 258% in the last three quarters. Volume was just above normal Tuesday, Up days have tended to come on heavier trade than down days in recent weeks.
Atlassian stock rose 5% to 242.19, clearing a 241.14 buy point from a double-bottom base. TEAM stock climbed 3% overnight after the collaborative software maker guided higher for the current quarter.
Tesla, Adobe Clear Aggressive Entries
Tesla stock jumped 8.6% to 762.32 in above-average trade. A day after rallying above its 10-week line, TSLA stock moved above its 50-day line and its March highs. Like a number of highly valued stocks that are trying to rebound, Tesla stock is moving above a falling 50-day line, which is not ideal. Still, this is the first TSLA buy signal for aggressive investors in months.
Adobe stock rose 1.7% to 514.86, nudging past a 506.61 early entry from a seven-month consolidation. Shares have risen sharply over the past month, but the relative strength line remains weak. Also, volume has been very light over the past several days. A pullback would not be surprising. The official buy point for Adobe stock is 536.98.
Maravai LifeSciences, which makes a key component for the Pfizer/BioNTech vaccine, popped 7.2% to 37.51. That broke a downtrend as MRVI stock rebounded from its 50-day line. Shares rose for a fourth straight session on above-normal trade following a MRVI stock offering.
Market Rally Analysis
The stock market rally continues to show solid action. The S&P 500 hit a new high while the Dow Jones is just below. The Nasdaq is close to regaining all-time levels. The Russell 2000 is lagging, but isn’t tumbling.
Overall market volume has trended lower in the last few weeks, amid signs that retail investors are reducing trading activity.
Coronavirus plays such as Zoom Video (ZM) rose modestly, but are still heavily damaged. Some e-commerce plays such as Etsy (ETSY), Shopify and Amazon stock are at early entries or nearing them.
There are still mini-rotations from day to day or week to week. still rotation from day to day. Within the Nasdaq, there has been a shift out of chip stocks — aside from Nvidia — to Apple, Tesla, e-commerce and software names, though few of these have actually broken out.
Meanwhile, chip stocks are just one day away from a number of breakouts. Recovery and reopening plays haven’t broken down either.
What You Should Do Now
Investors should be concentrated in leading stocks, but not in a specific group. Balance your leaders across a variety of sectors, limiting your risk of a major meltdown while staying in sync with an evolving market.
Your watchlist should be even broader, keeping an eye on up-and-coming sectors — like software — before they flash buy signals.
A poll question on Tuesday’s IBD Live was on whether to buy the breakout or when stocks rebound from or retake their 50-day lines. The answer is that it depends on the stock’s history, current market conditions and your own investing style.
In the current market rally, a hybrid approach has its merits. Consider taking a partial position from an early entry, then fill out that position if and when that stock stages a traditional breakout.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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