Dow Jones futures will open Sunday evening, along with S&P 500 and Nasdaq futures.
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After some difficulties for much of the week, the new stock market rally took an upward direction on Friday. Major indexes saw an upward reversal and a number of stocks issued buy signals.
NVIDIA shares, Metaplatforms (META), Arista Networks (A NET), Qualys (QLYS), Elie Lilly (THERE IS), CME Group (CME), Vertiv Holdings (VRT), CrowdStrike Titles (CRWD), Cadence Design Systems (CDNS) and Palo Alto Networks (PANW) were among those that broke buy points or early entries. All have relative strength lines at or near the highs, reflecting strong performance relative to the S&P 500.
With these 10 actions, You’re here (TSLA) rebounded from key support on Friday and rose for the week despite a wave of bad news.
Investors should prepare their watchlists this weekend, looking to gradually add exposure if the market continues to perform well.
Nvidia (NVDA), LLY shares, Arista Networks, Vertiv and Meta Platforms are in the IBD rankings, with Tesla shares on the rankings watch list. PANW stocks and meta platforms are on SwingTrader. CDNS stock is on IBD Long-Term Leaders. Meta, Nvidia, Qualys, Arista Networks, Cadence Design, Palo Alto Networks, Tesla and Eli Lilly stocks are on the IBD 50. Nvidia, Tesla, Palo Alto and ANET stocks are on the IBD Big Cap 20.
Eli Lilly was Friday’s IBD Stock of the Day, with stock picks from CrowdStrike, Arista Networks and PANW also during the week.
Dow Jones Futures Today
Dow Jones futures open Sunday at 6 p.m. ET, along with S&P 500 and Nasdaq 100 futures.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading during the next regular trading session.
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Stock market rally
The stock market struggled for much of the week, with the Dow and S&P 500 undercutting their recent lows, ending their rally attempts. But the Nasdaq’s attempted rally continued. The major indexes saw a bullish reversal in higher volume on Friday, with major stocks moving higher.
The Dow Jones Industrial Average edged down 0.3% in last week’s stock trading. The Dow undercut the lows again Friday morning, but then recovered for a 0.9% gain. The S&P 500 index rose 0.5%, rebounding from the 40-week line on Friday. The Nasdaq Composite Index jumped 1.6% on Friday and over the week, surpassing the 21-day line. The small-cap Russell 2000 index fell 2.1% after hitting a five-month low on Tuesday.
Market breadth was positive on Friday, but the overall trend has been very weak for weeks or months.
The 10-year Treasury yield jumped 21 basis points to 4.78%, but closed well below Friday morning’s high of 4.89%. The 10-year bond yield rose several basis points on Friday, but the dollar fell for a third straight session.
U.S. crude oil futures plunged 8.8% to $82.79 a barrel last week. Gasoline futures fell 8.6% last week and just over 19% over the past three weeks. They hit a 2023 low during the week.
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Among growth ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.5% last week. The iShares Expanded Tech-Software Sector ETF (IGV) jumped 2.2%, reclaiming the 50-day line. Cybersecurity plays the role of CRWD, Qualys and Palo Alto are all members of the IGV. The VanEck Vectors Semiconductor ETF (SMH) gained 2.3%, with Nvidia stock the top holding. CDNS stock is in SMH and IGV.
Reflecting more speculative stocks, the ARK Innovation ETF (ARKK) fell 1.2% last week and the ARK Genomics ETF (ARKG) fell 5.7%. Tesla stock remains the No. 1 position among Ark Invest ETFs.
The SPDR S&P Metals & Mining ETF (XME) slipped 3.2% last week. The Global X US Infrastructure Development ETF (PAVE) edged down 0.4%. The US Global Jets ETF (JETS) fell 1.5%. The SPDR S&P Homebuilders ETF (XHB) fell 2.1%. The Energy Select SPDR ETF (XLE) fell 5.2% and the Health Care Select Sector SPDR Fund (XLV) rebounded 1% higher, with LLY stock a notable member. The SPDR Industrial Select Sector Fund (XLI) slipped 0.6%.
The Financial Select SPDR ETF (XLF) fell 0.4%, with CME stock a member.
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Actions in buying zones
Nvidia stock rose 2.4% to 457.62 on Friday and was up 5.2% for the week, crossing the 50-day line, providing early entry. As of Friday’s close, NVDA stock has a new base with a buy point of 502.66. Stocks fell slightly late Friday, as The Information reported. Microsoft (MSFT) will launch an AI chip next month to reduce its reliance on Nvidia GPUs.
Meta stock jumped 3.5% to 315.43 on Friday, clearing a 310.64 cup-with-handle buy point as well as a 312.87 entry.
Arista stock jumped 3.2% on Friday and 45.5% for the week to 194.02. Shares cleared an early entry of 189.90. ANET stock now has a flat base with a buy point of 198.70.
Eli Lilly stock rebounded from its 50-day line on Friday, jumping 4.4% to 565.22 and surpassing the 21-day moving average. This offered a new buying opportunity. LLY stock fell below its 50-day line on Tuesday, but recovered it on Thursday. Eli Lilly had a bullish outdoor week.
Qualys stock jumped 4% Friday to 160.97, breaking through short-term resistance around 155 as well as a recent 52-week high at 157.88. This recent area could be considered a de facto flat base or a handle towards a base dating back to September 2022.
CrowdStrike stock jumped 6.9% Friday to 176.69 on heavy volume, rising from the 21-day line to erase a few months of disorderly consolidation. CRWD stock, however, closed 11.4% above its 50-day line.
Palo Alto stock jumped 4.2% to 246.69 on Friday, rising from near the 50-day line and breaking through some very near-term levels. PANW stock has a consolidation buy point of 258.88. However, investors could use 254.23, or a trendline around 250, as additional early entries.
CME stock jumped 4.85% to 211.93 in a big week that swallowed up the last two months of trading. On Thursday, stocks rebounded from the 50-day line. On Friday, shares broke through the flat buy point of 209.31, according to MarketSmith analysis.
Vertiv stock rebounded 6.9% to 39.77 for the week, including Friday’s 4.2% gain. Stocks rebounded from the 21-day and 10-week lines while clearing near-term levels, providing early entry. VRT stock, one of the big winners of 2023, now has a new flat base with a 40.41 buy point.
Cadence Design stock jumped 3.9% Friday to 243.95, rebounding from the 50-day line and breaking the downtrend by a handful, providing early entry. CDNS stock is working on a buy point of 247.50 cup with handle.
Tesla Stock
Tesla stock jumped 4.1% to 260.53 for the week. On Wednesday, shares jumped 5.9%, surpassing the 50-day line and providing early entry. Stocks fell back to the 50-day line Friday morning, but rebounded for a slight gain. A move above Thursday’s intraday high of 263.20 could offer another early entry after breaking a downtrend in the handle. Tesla stock has a cup-and-handle base of 278.98.
Tesla has shown surprising strength given a wave of seemingly bad news. Early Monday, Tesla reported third-quarter deliveries that fell much more than expected. On Monday evening, Tesla launched a new, cheaper Model Y, $3,750 less than the previous base variant. On Thursday evening, Tesla slashed prices on the Model 3 and Model Y in the United States, as well as reductions on the Model Y in Norway.
Bulls are eagerly awaiting an updated Model 3, which will begin deliveries soon in China and Europe, as well as the upcoming Cybertruck and more speculative long-term bets on autonomous driving, AI and robotics.
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What to do now
The attempted stock rally showed bullish action to close out the week, with major indexes seeing an upside reversal on Friday and a slew of top stocks issuing buy signals.
Investors could and perhaps should have increased their exposure on Friday. If the market continues to perform well, continue to move away from cash, but do so gradually.
Remember, stocks rebounded Friday as Treasury yields fell from their highs, but the rise in market rates continues. It’s easy to imagine the major indexes falling again if the 10-year Treasury yield gets closer to 5%.
So be prepared to take a step back if the market or your positions start to weaken.
But this weekend is an opportunity to prepare. Make sure your watchlists are up to date. Pay particular attention to actions that are actionable or almost actionable.
In the coming week, investors will receive the CPI and PPI inflation reports. The results season will begin, with JPMorgan Chase (JPM), UnitedHealth (UNH) and Delta Airlines (DAL) among the headliners.
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