Dow Jones Aims For New Closing High, But Nasdaq Slips As Tesla Stock Reverses

Stocks were mixed early Wednesday, as the Dow Jones Industrial Average inched toward a new closing high but the Nasdaq and S&P 500 pulled back.

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The Dow Jones industrials climbed 0.2%, on track to extend a win streak to six days. The S&P 500 was flat in the stock market today, while the Nasdaq fell 0.3%. Small caps tracked by the Russell 2000 edged higher. Volume was slightly higher on both exchanges vs. the same time Tuesday.

Among exchange traded funds on Wednesday, Innovator IBD 50 (FFTY) rose 0.6%, after hitting resistance Tuesday at its 200-day moving average. The iShares Russell 1000 Growth ETF (IWF) and Invesco QQQ Trust (QQQ) each slipped about 0.5% Wednesday.

Materials, up 0.4%, led the 11 sectors tracked by S&P, while health, financials and industrials climbed more than 0.2% each. Communication services, down 0.2%, was the only decliner.

The U.S. economy has been struggling to recover from the Covid-19 pandemic, which triggered nationwide lockdowns more than a year and a half ago. A resurgence in cases fueled by the more contagious delta variant had been slowing as vaccinations rise.

But a new coronavirus variant with a large number of mutations is raising concerns. Though much is still unknown about the omicron variant, currently available vaccinations and boosters may offer some protection against the highly transmissible virus.

Globally, Covid-19 cases have topped 283 million, with over 5 million deaths, according to Worldometer. In the U.S., cases have now passed 54 million with more than 842,000 deaths.

Growth Stocks To Watch

Roblox (RBLX) stumbled nearly 4% to move further below its 50-day moving average, which it breached on Tuesday. Shares recently triggered the round trip sell rule, after erasing a 36% gain from a Nov. 9 breakout. RBLX, which came public in March, is an IBD Leaderboard stock.

Over in the IBD 50, Zim Integrated Shipping Services (ZIM) led with a 4% gain in twice normal trade to climb back near a 57.05 buy point of a cup with handle. The stock tried to clear the buy point Tuesday and on Dec. 10, but closed below the entry both times.

Alpha & Omega Semiconductor (AOSL) rallied 4% in heavy volume to a new high, recovering most of Tuesday’s 4.4% loss. Shares are well extended from a 43.10 buy point of a cup base cleared last month, according to MarketSmith chart analysis. AOSL’s relative strength line is at a new high, a bullish sign.

Among other IBD 50 winners, data storage stocks Silicon Motion Technology (SIMO) and Seagate Technology (STX) advanced more than 1.5% each.

Silicon Motion is extended past an 81.97 buy point of a consolidation cleared on Dec. 7. But Seagate is close to the 117.03 buy point of a cup base — it’s about 1% away from the entry. Seagate’s relative strength line is already at new highs, which would bolster a potential breakout.

But Tesla (TSLA) fell 1.3% after erasing early gains. TSLA stock continues to work on a double-bottom base with a 1,202.05 buy point. On Tuesday, CEO Elon Musk exercised all of his options expiring next year, which could signal that he has, at least temporarily, finished selling his shares.

In addition, Musk sold another 934,090 shares, worth about $1.02 billion, to cover the associated taxes on the options exercised, according to regulatory filings.

Dow Jones Movers

Nike (NKE) led the Dow with a nearly 2% gain to retake its 50-day line. The stock is working on a new flat base with a buy point at 179.20, after a small gain from a cup-base breakout early last month. Nike shares are up nearly 20% this year.

Walgreens Boots Alliance (WBA), IBM (IBM) and Home Depot (HD) added about 1% apiece.

Home Depot rose 0.6% for its sixth straight advance as the home improvement chain continues to rebound off its 50-day line. Shares are in a buy zone on a rebound from support. Home Depot stock is up more than 52% this year.

Boeing (BA) and Verizon (VZ), down about 0.6% each, were the biggest Dow losers.

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Follow Nancy Gondo on Twitter at @IBD_NGondo

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The post Dow Jones Aims For New Closing High, But Nasdaq Slips As Tesla Stock Reverses appeared first on Investor’s Business Daily.