The Dow Jones futures will open Sunday evening, along with the S&P 500 and Nasdaq futures. The rise of the stock market became a confirmed upward trend, as the main indices broke long weekly losses.
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Thursday’s follow-up day on the Nasdaq was followed by stronger gains on Friday. Investors should take part in this new market rally, but not jump into it.
DLTR, Atkore (ATKR), Delta Air Lines (DAL), Onsemi (ON) and Microsoft (MSFT) are worth seeing. Dollar Tree (DLTR), Atkore, Onsemi and DAL stocks are showing the first entries, although they are definitely on the aggressive side. Investors may want to wait for the right buying points.
Microsoft actions cannot be triggered. It is far from actionable. But it’s a megacap growth action that doesn’t look horrible. In contrast, Tesla (TSLA) and Nvidia (NVDA) had bigger rebounds than Microsoft last week. But both had fallen more than 50% from all-time highs.
ATKR shares are on the IBD Leaderboard and IBD 50 watchlist. MSFT shares are on IBD Long-Term Leaders. The ON shares were the IBD shares on Friday.
The video embedded in this article highlighted a crucial market week and analyzed the actions of DAL, Onsemi and Regeneron Pharmaceuticals (REGN).
Dow Jones futures today
Dow Jones futures open Sunday at 6 p.m. ET, along with the S&P 500 and Nasdaq 100 futures.
Dow futures will normally be traded on Sunday evenings and Mondays. But U.S. stock markets will close on Monday in commemoration of Memorial Day. Other stock exchanges around the world will be open.
Remember that overnight action on Dow futures and elsewhere does not necessarily translate into actual trading at the next normal stock market session.
Join IBD Experts as they discuss actionable stock recovery actions on IBD Live
Stock market meeting
Stock market recovery began volatile with the Nasdaq hitting a 52-week low on Tuesday. But the main indices rose sharply the rest of the week, with strong weekly gains.
The Dow Jones Industrial Average rose 6.2% on the stock market last week. The S&P 500 index rose 6.6%. The Nasdaq compound rose 6.8%. The small Russell 2000 capitalization rose 6.55%.
The 10-year Treasury yield fell four basis points to 2.74%, just above the 50-day line.
U.S. crude oil futures rose $ 115.07 a barrel last week.
ETFs
Growth and sectoral funds reflected broad market growth.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) rose 9% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 4.9%. The iShares expanded technology software (IGV) ETF gained 6.1%, with MSFT shares a significant stake. The VanEck Vectors Semiconductor ETF (SMH) xx%. Nvidia shares are a major component of SMH with ON Holding also on the ETF.
SPDR S&P Metals & Mining ETF (XME) rose nearly 10% last week. The Global X US Infrastructure Development ETF (PAVE) was up 7.2%. US Global Jets ETFs (JETS) rose 7%, with Delta shares a significant stake. SPDR S&P Homebuilders ETF (XHB) rose 6.9%. The Energy Select SPDR ETF (XLE) rose 8.6% to new highs, while the Financial Select SPDR ETF (XLF) gained 8.3%. The SPDR Fund for the selected health sector (XLV) increased by 3.3%
Reflecting more speculative stocks, ARK Innovation ETF (ARKK) rose 7.1% last week and ARK Genomics ETF (ARKG) a relatively modest 3%. Tesla shares are the No. 1 stake in Ark Invest ETFs. Ark’s Cathie Wood has also repurchased shares of NVDA.
Top five Chinese stocks to watch now
Actions near points of purchase
Dollar Tree shares shot up 29% last week to 165, more than clearing the 20% drop from the previous week. The existence of DLTR was exhausted after Walmart (WMT) and Target (TGT) lost sight of EPS and were appreciated. But the dollar chain of stores easily outperformed the views and gave a solid outlook. If you put a giant thumb in the middle of the DLTR stock chart, it almost looks active, trading above the 50-day line and a trend line. But investors should probably wait for the stock to settle. Perhaps Friday’s intraday high of 166.35 could serve as a new area of resistance. MarketSmith analysis shows that the relative strength line is already at its maximum.
ATKR shares fell above a 112.34 buy point from a double-bottomed base after gains in early May, but then fell behind with market selling. Shares fell below their 50- and 200-day lines on Tuesday, but rebounded the rest of the week, ending 5.4% at 107.72 for the week. Undoubtedly, Atkore’s shares are breaking a short-term downtrend, offering early entry. But the three-day rally has come at a slight volume while the downward trend is strong. Investors may want to expect a new base within a larger consolidation, with 115.88 as a possible point of purchase.
Shares of DAL flew last week, rising 9.3% to 42.23, with all those gains and more in the last three days. On Thursday, Delta stocks rebounded above the 50- and 200-day lines, breaking a downward trend from the short-term high of April 21, 46.27. . Even with Friday’s gain, investors could take an early position here. But 46.37 may serve as the best buying point, with the 45-46 area acting as a resistance several times over the past year. United Airlines (UAL), Marriott International (MAR) and other travel stocks made similar moves last week.
Travel stocks rose as JetBlue (JBLU) and Southwest Airlines (LUV) gave second-quarter earnings forecasts, following United’s optimistic guidance earlier this month. However, Delta said it would reduce flights this summer amid staffing problems.
Onsemi shares rebounded 200- and 50-day lines late last week, also eliminating some short-term resistance. Investors who want to bet on a growth name could have bought ON shares here. The official point of purchase is 71.35. The RS line is already at a new high. In terms of fundamentals, Onsemi has five consecutive quarters of three-digit profit growth.
Microsoft stock
Shares of Microsoft rose 8.2% to 273.24 last week after reaching a low of 11 months the previous week. MSFT shares are still below its 50-day line and especially below its 50-day line. A strong move above the 200-day line could provide an entry as a long-term leader. But Microsoft’s stock is a long way from its November 22 high of 349.67. Its RS line is well off the highs.
But with the possible exception of Apple (AAPL), Microsoft’s shares look better than other megacap growth names. Microsoft’s earnings estimates are higher than Apple’s. In addition, its operations are less exposed to supply chain problems and a weaker consumer than Apple might be.
If large-cap technologies are to be sustained, Microsoft is likely to be involved.
Tesla stock
Shares of Tesla on Tuesday reached a 10-month low of 620.37, just over 50% below its November high of 1,243.49. But stocks rebounded sharply, closing the week up 14.4% to 759.63. These advances came at a higher volume, after a large number of large losses in huge trade in recent weeks. Still, Tesla’s stock chart needs a lot of repair, with a lot of resistance. The 50-day line crosses below the 200-day line again.
Tesla Rival seizes the EV crown, takes the Model 3 and issues the buy signal
Nvidia stock
Nvidia surpassed the views, but guided the low on Tuesday night, just after setting a 52-week closing low. But stocks still bounced back over the next three days, ending with a 12.7% weekly advance to 188.11. But after falling 55% since late November, Nvidia shares have considerable work to do.
Market concentration analysis
The rise of the stock market is in a confirmed upward trend, with the follow-up buying on Friday providing some stimulus.
The Nasdaq held a follow-up day on Thursday with the Nasdaq volume higher than Wednesday despite being below average. The Nasdaq had another big price gain in higher volume on Friday.
The S&P 500 and Dow Jones offered good price gains on Thursday and Friday, but the volume of the NYSE fell in both sessions. S&P 500 follow-up days require a higher NYSE volume than the previous session. However, given the large amount of capitalization of the Nasdaq in the S&P 500, including shares of Apple, Microsoft, Facebook (FB) meta platforms (Alphabet (GOOGL), Amazon.com (AMZN), Tesla shares, and Nvidia, possibly the S&P. 500 has organized an FTD based on total volume.
But ultimately, the market doesn’t need a day of Dow or S&P 500 tracking right now. An index that confirms an attempt at concentration is all that is needed.
The Dow Jones broke an eight-week losing streak, while the S&P 500 and Nasdaq ended the seven-week falls, all decisively. It’s nice to see a rally on a weekly chart.
All major indexes have moved above their 21-day moving averages. They are all above their highs on May 17, when they followed up before falling the next day. The indices are still below their 50- and 200-day lines, however, with other points of resistance along the way.
Thus, although the market rally has not collapsed immediately, it is unclear whether it will be a negotiable rally or something more lasting.
One problem is that not many stocks are in a good position. Not surprisingly, given the sharp decline in the market since the end of March.
Energy stocks continue to lead, although many are expanding again. Lithium games are hot again, but they already seem to be widespread. Some drug and biotech names still seem strong. Perhaps some retailers, such as DLTR and Ulta Beauty (ULTA) shares, will be established. Travel works such as DAL shares are recovering again, but they have made a number of short round trips in recent months. Actions may be set to ON, but most growth names are still in the off position.
Time to market with IBD’s ETF market strategy
What to do now
Investors should take advantage of the current market rebound, perhaps delving a little deeper into the pool after diving into Thursday’s follow-up.
If you don’t see individual stocks you trust, a broad market ETF can offer some exposure.
Keep your portfolio mostly in cash. And consider taking …