Dow Jones futures dipped into tight losses early Wednesday, as the Dow Jones Industrial Average threatened to snap its year-end rally. Tesla climbed, as Chief Executive Elon Musk sold the last of his Tesla stock options due to expire in ’22. And the No. 1 Dow Jones stock — Microsoft — neared a new buy point.
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Among the Dow Jones leaders, Apple (AAPL) rose 0.2% premarket Wednesday, while Microsoft (MSFT) gained 0.15% in today’s stock market. Also on the Dow 30, Home Depot (HD) continues to rebound from support, while Nike (NKE) battled to retake a key level.
Electric-vehicle leader Tesla (TSLA) traded up more than 1% premarket Wednesday. Its rival, Rivian (RIVN), dropped around 2%. Lucid Group (LCID) was down around 1%. And Chinese EV leaders Li Auto (LI) and Xpeng Motors (XPEV) were mixed Wednesday morning ahead of their December sales reports, expected over the weekend.
Among Wednesday’s top stocks to buy and watch, Applied Materials (AMAT), ArcBest (ARCB), Fortinet (FTNT), Icon (ICLR) and Mosaic (MOS) are in or near new buy zones. Following Thursday’s bullish market signal, investors have the green light to purchase new breakouts.
Icon, Microsoft and Tesla are IBD Leaderboard stocks. Fortinet was featured in this week’s Stocks Near A Buy Zone column. Applied Materials and Mosaic are IBD SwingTrader stocks.
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Dow Jones Today
Ahead of the stock market open Wednesday, Dow Jones futures lost 0.1% vs. fair value, while S&P 500 futures also moved down 0.1%. Nasdaq 100 futures reversed 0.1% lower as well. Small caps were lagging, with Russell 2000 futures trading a fraction in the red. Remember that premarket action in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.1% premarket Wednesday, while the SPDR S&P 500 ETF (SPY) traded up less than 0.1%.
Elsewhere, the 10-year Treasury yield advanced to around 1.5% Wednesday morning, following its close at just above 1.48% Monday.
U.S. markets will operate on a normal schedule this week, ahead of the New Year.
Stock Market ETF Strategy And How To Invest
Stock Market Rally
The stock market posted mixed action Tuesday, as the Nasdaq and S&P 500 snapped four-day win streaks. Meanwhile, the Dow Jones industrials extended its win streak to five sessions, nearing a new high.
Following some strong action last week, the market outlook is back in a “confirmed uptrend.” This means investors can buy top-rated growth stocks breaking out past correct buy points.
Tuesday’s The Big Picture commented: “Indeed, Tuesday’s moderate loss can be taken as a needed pause. The S&P 500’s loss Tuesday may not be enough to reset the table for buyers. But the S&P right now has to be careful to not run off its rails and not get too extended.”
For daily stock market commentary, check out IBD’s The Big Picture.
Dow Jones Stocks To Watch: Home Depot, Nike
Home Depot stock rallied 0.5% Tuesday, rising for a sixth straight day, as the home improvement chain continues to rebound from its 50-day support level. Shares are in a buy zone on a rebound from support. Amid the current win streak, Home Depot is the No. 2 Dow Jones performer in 2021, up 52.9% year to date through Tuesday’s close. (The top Dow Jones stock is Microsoft with a 53.4% advance.) HD shares were unchanged premarket Wednesday.
Dow Jones retail leader Nike is tracing a new flat base that has a buy point at 179.20, according to IBD MarketSmith chart analysis. Shares continue to see strong resistance around their 50-day line following Tuesday’s 0.7% loss. It has a year-to-date gain of 17.6%. Nike shares were slightly higher premarket Wednesday.
Four Top Growth Stocks To Watch In The Current Stock Market Rally
Stocks To Buy And Watch: Applied Materials, ArcBest, Fortinet
Chip equipment maker Applied Materials ended just above a 159.10 buy point in a flat base following Tuesday’s 1.9% decline. Shares are in the 5% buy area that runs up to 167.06. AMAT shares were slightly higher premarket Wednesday.
Trucker ArcBest eased 1.2% Tuesday, giving back a small part of Monday’s 9.1% surge that saw the stock break out past a 116.89 buy point in a shallow consolidation. The buy range ends at 122.73. The stock edged higher early Wednesday.
Cybersecurity leader Fortinet remains in the 5% buy area above a 355.45 buy point in a consolidation after Tuesday’s 0.45% decline. The buy area tops out at 373.22. Bullishly, the stock’s relative strength line hit a new high Monday on the breakout, confirming the stock as a market leader. The RS line measures a stock’s price performance vs. the S&P 500. Fortinet shares were flat premarket Wednesday.
IBD Leaderboard stock Icon is still in buy range past a 301.82 buy point in a consolidation, according to IBD MarketSmith chart analysis, in the wake of last week’s breakout move. The 5% buy area runs to 316.91. Per Leaderboard commentary, Icon also cleared resistance around 290, which served as an early entry. The stock was unchanged in early morning trade Wednesday.
IBD SwingTrader stock Mosaic bullishly reclaimed its 50-day moving average during last week’s strong advance. The stock is forming the right side of a cup base with a 43.34 buy point. Be on the lookout for a handle to offer a more risk-optimal entry. MOS stock shows a strong 98 out of a perfect 99 IBD Composite Rating, according to the IBD Stock Checkup. Mosaic stock was up 0.4% premarket Wednesday after Tuesday’s 0.35% fall.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
EV Stocks: Li Auto, Xpeng, Lucid Motors, Rivian
Li Auto continues to work on the early stages of a new base, after triggering the 7%-8% loss-cutting sell rule below a cup-with-handle base’s 34.93 buy point. Shares are below their 50-day line after finding support around the long-term 200-day moving average. The stock was unchanged premarket Wednesday.
Xpeng Motors activated a round-trip sell signal from a 48.08 buy point during early December’s sharp sell-off. XPEV shares continue to test resistance around the key 50-day moving average. Wait for the stock to form a new base, which would offer a fresh entry. Shares dropped 0.5% premarket Wednesday.
Lucid Motors shares dropped around 1% premarket Wednesday, threatening to add to Tuesday’s 4.3% skid. LCID stock remains extended past a 28.49 buy point in a cup-with-handle base, but huge gains have faded. Shares are trying to find support at their 50-day line, but are having trouble getting back above that level.
Recent initial public offering Rivian declined about 2% premarket Wednesday, on pace to add to Tuesday’s 3.9% loss. RIVN shares closed Tuesday about 43% off their post-IPO highs. Continue to wait for an IPO base to form before considering a purchase. Recent sharp losses are a significant setback in the stock’s basing process and there is no new buy point in sight.
Five Best Dow Jones Stocks To Watch Now
Tesla Stock
Tesla stock rallied 1% premarket Wednesday, looking to rebound from Tuesday’s 0.5% decline. 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 of the options exercises, according to regulatory filings.
On Monday, Tesla shares briefly topped a downward-sloping trendline buy point around 1,115 before closing beneath it. Getting above Tuesday’s intraday high could serve as a trigger, while a handle would be the most constructive price action at this point. Meanwhile, a double bottom with a 1,202.05 buy point continues to take shape.
Shares traded as high as 1,243.49 on Nov. 4, but the stock ended Tuesday about 12% off its 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple stock snapped a four-day win streak Tuesday with a 0.6% loss. The stock is about 17% above a 153.27 buy point out of a cup-with-handle base, according to IBD MarketSmith chart analysis, and just off new highs. AAPL shares rose 0.2% premarket Wednesday.
Software leader Microsoft decisively regained its 50-day line last week, placing the top Dow Jones stock in a new buy area. Meanwhile, MSFT shares are forming a flat base with a 349.77 buy point with an early entry at 343.89. Shares moved up 0.15% premarket Wednesday, on pace to rebound from Tuesday’s 0.35% loss.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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The post Dow Jones Futures Slip; Tesla Rallies — Is Elon Musk Through Selling Shares? appeared first on Investor’s Business Daily.
