Dow Jones Futures: S&P 500 Regains Key Levels, But Be Cautious; Tesla doubles discounts in the US
Dow Jones futures rose slightly after hours, along with S&P 500 and Nasdaq futures. Micro technology (MU) and Tesla (TSLA) was concentrated overnight.
The stock market rally took a solid turn on Tuesday, with Nike (NKE) increase and FedEx (FDX) leads in earnings, while supporting a number of peers and related stocks.
The S&P 500 index rose just above its 50-day moving average, a positive but not decisive sign.
Apple (AAPL) managed to rise modestly, extending the rally from just above Tuesday’s bear market low. Tesla (TSLA) failed to gain ground, closing slightly lower. Tesla is said to have doubled its year-end delivery discount in the US
Investors should remain cautious. The market rally remains under pressure, and there has been a nasty habit of stepping back after showing any strength.
While, first sun (FSLR), space (MEDP), Aehr . test system (AEHR), imprint (Pi) and Schlumberger (SLB) are the top stocks that remain near their 50-day or 10-week moving averages.
MEDP stock has been added IBD Rankings on Wednesday, with PI stock on the Leaderboard watchlist. Stocks SLB and KLA Corp. IBD Large Hat 20.
Micron reported a larger-than-expected loss while Q1 revenue fell 47%. The memory chip giant has slightly lower instructions for the current Q2.
Micron said it will continue to cut capital spending. That’s not good news for memory-contact chip device makers Application materials (amateurs), Lam study (LRCX) and KLA (KLAC)
MU shares fell 2% in extended trading. Shares were up 1% to 51.19 in Wednesday’s trading.
Meanwhile, AMAT and Lam Research shares fell 2% overnight while KLAC stock fell less than 1%.
Drive manufacturer Western Digital (WDC), Seagate Technology (STX) decreased by 2.2% and 1.5% respectively.
Dow Jones Futures Today
Dow Jones futures are up 0.2% above fair value. S&P 500 futures were up 0.3% and Nasdaq 100 futures were up 0.35%.
The yield on the 10-year Treasury note fell 3 basis points to 3.65%.
Remember that action overnight in future index and other places that don’t necessarily translate into actual transactions the next time stock market meeting.
Join IBD experts as they analyze stocks that could act in the stock market rally on IBD Live
Stock market recovers
The stock market rally rallied on Wednesday, quickly gaining more than 1% and largely keeping that gain into the session.
The Dow Jones Industrial Average rose 1.6% on Wednesday stock market trading. The S&P 500 Index rose 1.5% with Dow Jones giant Nike, the S&P 500’s top performer of the day for the day. The Nasdaq composite also gained 1.5%. The Russell 2000 small-cap index recovered 1.7%.
Shares of Apple rose 2.4% to 135.45 on Wednesday, still well below the moving average. On Tuesday, AAPL stock hit 129.89, just above the June bear market low of 129.04.
US crude oil prices rose 2.7% to $78.29 per barrel.
The yield on the 10-year Treasury note was unchanged at 3.68%.
Among the best ETFsIBD 50 Innovator ETF (FFTY) rose 2.2%, while Innovator’s IBD Breakthrough Opportunity ETF (HOUR) is 1.6% higher. iShares Expanded Tech-Soft Sector Sector ETF (IGV) increased by 1.2%. VanEck Vectors Semiconductor ETF (SMH) increased by 2.2%. Micron stock is a notable stock that SMH is holding, along with chip equipment stocks AMAT, LRCX and KLAC.
Reflecting more speculative stocks, the ARK Innovation ETF (ARKK) rose 1.7% and the ARK Genomics ETF (ARKG) 2.2%. Tesla stock is the primary stock held on Ark Invest ETFs.
SPDR S&P Metals & Mining ETF (XME) rose 2.6% and the Global X US Infrastructure Development ETF (PAY THE ROAD RED) 1.7%. US Global Jets ETF (jet plane) increased by 1.3%. SPDR S&P Homebuilders ETF (XHB) increased by 1.9%. Energy Select SPDR ETF (XLE) and the Financial Select SPDR ETF (XLF) increase by 1.55%. SPDR Foundation for healthcare sector (XLV) added 1.3%.
The five best Chinese stocks to watch right now
Tesla Delivery Discount
Tesla has begun offering $7,500 for Model 3 or Model Y deliveries in the United States before the end of the year, Electrek reported late Wednesday. That’s up from $3,750 in early December, with 10,000 free Supercharger miles as well. Tesla is trying to boost its fourth-quarter delivery figures.
Many buyers will be able to delay receiving the goods until January 1, when new US tax credits of up to $7,500 will go into effect. Tesla sales in the United States could also face a negative impact from Elon Musk’s Twitter actions and political tweets.
Tesla stock attempted a rally on Wednesday but failed to end its losing streak in a bull market. TSLA stock fell 0.2% on Wednesday to 137.57, hitting another low. Shares are down 8.4% this week and 29% in December.
stocks to watch
Shares of First Solar rose 3.5% to 162.06 after falling to 150.25 on the day, finding support just above the 50-day line. FSLR stock is currently 5.7% above the 10-week moving average and at a near-term high. The solar leader may be working on a new facility, but a few more weeks is needed.
MEDP stock rose 3.4% to 210.59, recovering from the 50-day line and reclaiming the 21-day line. Investors can buy Medspace stock now or wait for a trendline break starting Nov. 15. MEDP stock has a buy point of 235.82 from a 16% deep consolidation next to the base. 45% deep cup.
PI stock rose 2.3% to 117.15, continuing to bounce off its 10-week moving average but just 4% above that level. That RFID chip game is possible from that sale after earnings broke out in late October.
AEHR rose 1.3% to 22.80, bouncing off the 50-day moving average. A move above the 21-day line will provide an entry into the volatile stock. The company’s chip testing company exposed EVs is delivering explosive revenue growth.
SLB stock rose 3% to 53.31, continuing its recovery Tuesday from the 50- and 21-day lines. Now clearly breaking the trendline in a short-term consolidation, Schlumberger stock could still work here.
Analysis of market recovery
OK, now the stock market is up again. After posting gains on Tuesday, the major indexes had a strong session on Wednesday.
The Dow Jones, supported by Nike, continues to recover from its 50-day moving average.
The S&P 500 and S&P MidCap 400 have just regained their 50-day moving averages, but only by a margin. The S&P 500 needs a definitive move above the 50-day line and that will only be the first step to a market rally.
Nasdaq and Russell 2000 remain below their 50-day moving averages.
Many other top stocks have found support or rebounded from key levels, including First Solar and Aehr Test Systems. Some are flashing buy signals, but in an unstable market.
Market Timing with IBD’s ETF Market Strategy
What to do now
After last week’s bad downtrend reversal and losses on Monday, the past few days have been positive, but don’t get too excited.
Market exposure remains light. Bulls remain under pressure with the S&P 500 right at the key level, with some other hurdles ahead.
Even if the market rallies recoup most of last week’s losses, there’s still the risk that this is another trap to lure investors right before a pullback.
So while some stocks signal buy, investors should be wary of any new positions. Yes, if the major indexes continue to rise again, the fresh buys of the past few days are likely to succeed. But if the S&P 500 falls to its lows on Tuesday or worse, those fresh buys are likely to fail.
If you try to play on the current market, keep the positions small and quickly lock in at least part of the profits. A broad market ETF can be a way to jump into a small rally without risking individual stocks.
But, a lot of stocks are setting up. So investors should be ready to act, update their watchlists, and stay engaged.
Read Big picture every day to stay in sync with market trends and top stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
YOU MIGHT ALSO LIKE:
Why This IBD Tool Simplifies Sautéch For top stocks
Catch the next big winning stock with MarketSmith
Want to get quick profits and avoid big losses? Try SwingTrader
IBD Digital: Unlock IBD’s premium list of stocks, tools and analytics today