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Dow Jones futures fell slightly on Thursday night, as did S&P 500 and Nasdaq futures, as Walt disney (DIS), Datadog (DOG), Cloudflare (NET) title earnings.
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The stock rally had a mixed session Thursday, but the Nasdaq Composite Index and S&P 500 Index hit a record high at the close. Tilray (TLRY) and other marijuana stocks plunged Thursday after being raised like a kite in recent days.
Stocks traded higher and lower on Thursday, with a solid finish pushing the Nasdaq above the 14,000 level fueling warning signs. Bitcoin has hit record highs, amid the latest signs of institutional support.
Screen of the day: Prepare your own list of top actions
Apple’s megacap technologies, Microsoft (MSFT), Amazon.com (AMZN) and Google parent Alphabet (GOOGL) were meh. But big chip names such as Taiwan Semiconductor (TSM), Nvidia (NVDA), Lam Research (LRCX) and Applied materials (AMAT) had strong sessions.
Disney stock, Datadog, Cloudflare and recent IPO To affirm (AFRM) reported profits after all four buying markets closed.
Disney title edged up with strong results. The stock of DDOG changed little after initially falling on mixed indications. NET stock fell on an online orientation. Affirms selling stocks despite sweeping views in its very first report since going public.
Marijuana stocks
Cannabis Aurora (ACB) also announced its results Thursday evening. The Canadian pot producer has exceeded revenue expectations. Aurora stock rose 4% in extended trade, offsetting the initial gains. ACB stock fell 23.5% on Thursday but is still up 13% for the week.
Marijuana stocks plunged on Thursday after huge gains. Tilray stock fell 50% to 32.16 on Thursday, after rising sharply before the open. It is still above its 10-day line after closing 117% above this short-term level on Wednesday.
Aphria (APHA), which merges with Tilray, slipped 36% on Thursday. Canopy growth (CGC) and Cronos (CRON) lost 22%.
TLRY stock fell slightly overnight, but most other marijuana stocks rose slightly after Aurora’s earnings report.
Justice probe GME Stock Frenzy
Reddit investors rushed into cannabis stocks after the rapid rise and fall of GameStop (GME) and AMC Entertainment (AMC). The Department of Justice has issued subpoenas to Robinhood and various brokerage and social media firms over massive pressure on GME and others’ shares. The Commodity Futures Trading Commission is investigating Reddit investor discussions on silver futures and related ETFs.
In addition, the House Financial Services Committee is planning a February 18 hearing on the GameStop stock market frenzy. Reddit CEO Steve Huffman will testify.
GME stock fell 0.2% to 51.10 on Thursday, the fourth day in a row of below-par volume. GME stock is 89% below its Jan 28 high of 483. AMC stock fell 3.3% on Thursday, 73% from its Jan 27 high of 20.66.
Apple (AAPL), Microsoft, Nvidia and TSM are part of the IBD ranking. Nvidia and Taiwan Semi shares are on SwingTrader. Microsoft’s stock is on IBD Long-Term Leaders. TSM, Nvidia and AMAT stocks are on the IBD 50 list.
Dow Jones Futures today
Dow Jones futures fell 0.1% below fair value, with Disney shares providing a slight boost. S&P 500 futures fell 0.15%. Nasdaq 100 futures fell 0.15%.
Keep in mind that overnight action on Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular trading session.
Join the IBD experts as they analyze the exploitable stocks during the stock market rally on IBD Live.
Coronavirus news
Coronavirus cases around the world have reached 108.25 million. Covid-19 deaths have exceeded 2.37 million.
Coronavirus cases in the United States have reached 27.98 million, with deaths exceeding 486,000.
Stock exchange rally
The stock rally continued to hover at record levels, trading higher and lower on Thursday, but within a relatively narrow range.
The Dow Jones Industrial Average closed just below the breakeven point in Thursday stock trading. The S&P 500 index rose 0.2% and the Nasdaq composite rose 0.4%.
The price of Bitcoin climbed to a record high above $ 48,400 on Thursday, falling to just over $ 47,000. MasterCard (MA) said it facilitates Bitcoin and some other cryptocurrency transactions, while Bank of New York Mellon (BK) said it would be a custodian of cryptocurrency assets. On Monday, Tesla said it bought $ 1.5 billion in Bitcoin, causing the digital currency to explode.
Megacap actions
Apple shares edged down 0.2% to 135.13. Stocks consolidate just below a 138.89 cup handle buy point. AAPL stock is finding support around its 21-day exponential moving average and just above its 50-day / 10-week lines.
MSFT stock, a component of the Dow Jones, S&P 500 and Nasdaq like Apple, rose 0.7%. It’s always in a shopping area.
The two trillion-dollar FANG stocks, Amazon and Google, lost 0.7% and gained 0.1%, respectively. AMZN stock forms a handful as it returns to its 50 day range. GOOGL stock is trading closely after hitting record highs last week on earnings.
Stocks of chips
TSM stock, no slouch at a market cap of $ 722 billion, jumped 4.1%, breaking through a short consolidation to a new high. Nvidia stock rose 3.3% to 610.03, still within the range of Wednesday’s breakout above a buy point of 587.76. The graphics chip leader broke an early entry of $ 560.07 billion on Monday.
LRCX stock jumped 7.5%, just below a new high. AMAT stock jumped 6.7% to an all-time high. Several other chip gear manufacturers have made big gains.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) climbed 1%, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 1.2. The iShares Expanded Tech-Software Sector (IGV) ETF rose 0.7%, with Microsoft shares being a major component. The VanEck Vectors Semiconductor (SMH) ETF jumped 3.7%, with TSM being the largest SMH component. Nvidia, AMAT and LRCX shares are also major components.
Earnings
Disney revenue and sales have beaten as Disney + subscribers now surpass 94.9 million. Disney’s inventory rose 2% overnight. The DIS stock edged up 0.75% to 191.05 on Thursday. Disney posted a fixed base buy point of 183.50 on Monday after rebounding bullish from its 50-day line recently. The buy area for Disney shares extends to 192.68.
Datadog’s earnings exceeded views, but its earnings forecast fell below some estimates. Datadog action was little changed in extended trading, erasing strong losses on Thursday night. DDOG’s stock rose 1.7% to 117.60 on Thursday, in the range of a 111.59-cup entry with handle, according to MarketSmith. The DDOG stock purchase zone ends at 121.37.
Cloudflare’s earnings edged down as forecasts were in line. Cloudflare stock fell 7% overnight, below recent buy points. NET stock rose 0.4% to 91.24 on Thursday. Shares traded a consolidation buy point of 88.87 on Monday, with 87.25 as an earlier entry. The official buying range ends at 93.31 for NET stock.
Claiming that both earnings and revenue have exceeded fiscal Q2 views, with Q3 revenue guidance online. Affirm stock fell 8% in extended trading. The AFRM stock rose 2.8% to 139.99 on Thursday. This erased the IPO basis after trying to close above the 138.08 buy point in the previous two sessions. An early entry of 123.55 cleared Tuesday was a better entry.
Analysis of stock market rallies
Both bulls and bears have been battling for the 14,000 Nasdaq in recent days, with the bulls taking the upper hand in Thursday’s close. It would be healthy if the composite could maintain itself around these levels for several days or weeks. The Nasdaq is now 7.5% above its still-stretched 50-day moving average and at risk of some kind of pullback. But the 50-day line could quickly catch up if the Nasdaq holds around or slightly below 14,000.
Investors can thank Apple stock and other megacaps. By not going anywhere, they help prevent the stock rally from overheating. This leaves a bit of room for other leaders, such as chip and IPO names, to keep working. Of course, if Apple and the tech titans start to soar, as they did at the end of January, the Nasdaq could quickly become very large.
The major indices have risen and fallen over the past two sessions, but daily fluctuations have been relatively modest with slight changes at the closing bell. However, there are many top stocks that have seen big gains or losses – not just GME or Tilray stocks. Investors should keep this in mind when developing a game plan.
If the stock rally ends with the Nasdaq retreating towards the 21-day or even 50-day line, many highfliers, especially IPOs, could fall 10%, 20% or more. What is your strategy for your investments?
Read The Big Picture every day to stay in sync with market direction and major stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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