[ad_1]
Dow Jones futures fell slightly on Tuesday night, as did S&P 500 and Nasdaq futures, with Adobe earnings, Chinese markets and a key Fed meeting in the spotlight. The stock rally attempted to rebound on Tuesday after Monday’s sell-off, but faded to a mixed close. Growth stocks performed relatively well, with Nvidia (NVDA) and Break (SNAP) trading around aggressive entries. AutoNation (AN) passed just below a point of purchase.
X
Adobe (ADBE), FedEx (FDX) and Point correction (SFIX) titled the main results after the close. Adobe earnings slightly exceeded views, but ADBE stock fell after hours, signaling a dip below a key level. FDX stock fell to new lows due to a shortfall in higher costs due to labor and supply chain issues. SFIX stock jumped in strong results, but stocks have been trending down for months.
Meanwhile, attention is turning to China, where the Shanghai Stock Exchange will open after a long weekend, as Evergrande default fears rock financial markets around the opening. The Hong Kong Stock Exchange, which was opened, is closed on Wednesday. Real estate-led conglomerate Evergrande, which has $ 300 billion in debt, pays no interest. A big question is whether the Chinese authorities will bail out Evergrande.
Finally, the Federal Reserve concludes a key two-day policy meeting on Wednesday afternoon. Will policymakers agree to cut back on asset purchases, or will they defer to the Fed meeting in early November in the wake of weak US job growth and Evergrande concerns? Meanwhile, will the majority of Fed policymakers support an interest rate hike in 2022? Following the announcement of the Fed meeting at 2 p.m. ET, Federal Reserve Chairman Jerome Powell will hold a press conference at 2:30 p.m. ET.
A relatively accommodating announcement from the Fed and comments from Powell could support the stock rally. But statements and the market could go the other way.
Adobe, Nvidia, and Snap stocks are listed in the IBD rankings. The ADBE share is on IBD Long-Term Leaders. Nvidia and AutoNation stock are on the IBD 50. AN stock was also the IBD stock of Tuesday.
Dow Jones Futures Today
Futures contracts on Dow Jones fell 0.4% from fair value. S&P 500 futures fell 0.4%. Futures on the Nasdaq 100 fell 0.45%. Adobe stocks are a drag on S&P 500 and Nasdaq futures.
Keep in mind that overnight action on futures contracts on Dow and elsewhere doesn’t necessarily translate into actual trades during the next regular trading session.
Join the IBD experts as they analyze the exploitable stocks in the stock market rally on IBD Live
Stock exchange rally
The stock rally started with modest gains, with the main indices generally positive during the session, before fading to become mixed at the close.
The Dow Jones Industrial Average fell 0.15% in stock trading on Tuesday. The S&P 500 Index fell 0.1%. The Nasdaq composite climbed 0.2%. Russell 2000 small cap advanced 0.2%.
Among the top ETFs, Innovator IBD 50 (FFTY) rose 1.5%, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 0.6%. The iShares Expanded Tech-Software Sector (IGV) ETF rose 0.2%. Adobe stock is a major IGV component. The VanEck Vectors Semiconductor (SMH) ETF edged up 0.2%. The Nvidia share is a big stake from SMH.
The SPDR S&P Metals & Mining ETF (XME) fell 1% and the Global X US Infrastructure Development ETF (PAVE) fell 0.8%. The US Global Jets ETF (JETS) fell 1%. The SPDR S&P Homebuilders ETF (XHB) lost 0.5%. The Energy Select SPDR ETF (XLE) edged up 0.2% and the Financial Select SPDR ETF (XLF) fell 0.1%.
Mirroring stocks with more speculative histories, ARK Innovation ETF (ARKK) climbed 0.9% and ARK Genomics ETF (ARKG) climbed 1.2%.
Five best Chinese stocks to watch right now
Adobe earnings
Adobe’s profits and revenues slightly exceed estimates for the third fiscal quarter. The software giant has also guided upward for the current fourth quarter. But Adobe stock fell 4% in extended trading, signaling a move below the 50-day line for the first time since June. Shares edged up 0.7% on Tuesday to 645.89, rebounding from the 50-day period.
Nvidia stock
Nvidia stock edged up 0.6% to 212.46 on Tuesday after rebounding intraday Monday from its 50-day line. At Monday’s low, Nvidia erased a double-digit gain, a strong enough sell signal for investors who bought during the breakout in late August. If NVDA stock breaks above Monday’s intraday high of 214.33, aggressive investors could attempt to initiate a position. But you might want to wait for Nvidia to move back above its 21-day line and break a downtrend, alongside the broader market rally.
Instant Stock
Snap stock rebounded sharply from its 50 day line and broke a trendline, triggering an early buy opportunity. Shares closed 6.1% higher at 76.08, near session highs. Snap stock has a flat base with an official buy point of 80.95, according to MarketSmith analysis. The relative strength line, the blue line in the charts provided, is near record highs.
Is this another false head? It’s a risk, especially in the current market climate.
AutoNation Stock
AutoNation stock rose 1.9% to 121.09 on Tuesday, approaching a breakout of the base of the cup. The point of purchase is 125.31. AutoNation could start to form a grip which would be a real advantage given that stocks have rallied almost straight from the bottom. The relative strength line for AN stock has already hit a new high, a very bullish sign.
When it’s time to sell your favorite stocks
Market rally analysis
Tuesday’s mixed action, as well as Monday’s late afternoon rebound, could have been worse. At least the market didn’t break through Monday’s lows and trigger a correction call.
But Tuesday’s weak close was not encouraging. The market rally remains under pressure and in a short term downtrend. The Nasdaq composite, which led the major indices, stopped ahead of the 50-day line, even at intra-day highs. The Dow Jones and the S&P 500 are still some distance from this key level. The Russell 2000 is still under its 200 days.
Growth stocks had a fairly good day. Some white-hot IPOs, such as Reached (UPST) and Task (TASK), break a record or close highs.
What to do now
If you are a particularly aggressive trader, you may have tried snacking Break (SNAP) or an ETF such as QQQ or FFTY, but there was also no need to add exposure. The major indices are all below their 50 day lines and still tend to go down in the last few weeks. Waiting for a little more strength may mean that you are missing out on some buying opportunities. But you also avoid another down leg.
Chinese markets and the announcement of the Fed meeting on Wednesday offer possible market catalysts, but in what way?
If this stock rally is to take another sustained run, you will have a number of quality stocks rebounding from key support or giving other buy signals. If it’s a one-day pop or a short one, you’re probably not going to make any progress.
In the meantime, focus on building those watchlists. When the market rally shows real strength, you’ll want to profit quickly. Stay alert and open-minded.
Read The Big Picture every day to stay in tune with the market direction and major stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
YOU MAY ALSO LIKE:
Why this IBD tool makes it easy to find the best stocks
Want to get quick profits and avoid big losses? Try SwingTrader
Best growth stocks to buy and watch
Time the market with IBD’s ETF market strategy
Vertical Violations: Why You Should Recognize This Bear Market Indicator
[ad_2]
Source link