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Dow Jones futures tilted higher on Tuesday, as did S&P 500 futures and Nasdaq futures. The stock rally took a break on Tuesday, retreating slightly after strong gains in recent sessions.
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Royal Caribbean (RCL), Carnival (CCL) and Norwegian Cruise Line (NCLH) belatedly joined a Bloomberg report that the Centers for Disease Control and Prevention recommended that cruises could resume this summer with certain restrictions. This followed reports that cruise line operators would not have to require vaccines for travelers.
Shares of Carnival, NCLH and RCL rose 2% overnight, adding to gains on Tuesday and in recent sessions. All three stocks are approaching possible buying points.
Hold breakouts, new buying signals
Microsoft (MSFT), Facebook (FB) and Google parent Alphabet (GOOGL) continued to hold in the buy range on Tuesday after Monday’s breakouts.
Micron technology (MU), Square (SQ), Sea Limited (I KNOW), Mexican Grill Chipotle (CMG) and Yeti Holdings (YETI) all buy signals flashed, at least intraday.
You’re here (TSLA) is meeting resistance after a recent run. But Tesla stock and other popular growth names are showing signs of life.
Microsoft and Google stocks are listed in the IBD rankings. GOOGL share is on SwingTrader. Microsoft stock is on IBD Long-Term Leaders. Yeti’s stock is on the IBD 50 list. Google and Micron’s stocks are on the Big Cap 20.
Dow Jones Futures today
Futures contracts on Dow Jones increased by a fraction from fair value. Futures contracts on S&P 500 edged up. Nasdaq 100 futures rose 0.1%.
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 132.97 million. Covid-19 deaths have exceeded 2.88 million.
Coronavirus cases in the United States have reached 31.55 million, with deaths exceeding 570,000.
California plans to lift most coronavirus restrictions by June 15, but retain its mask mandate.
Stock exchange rally
The stock rally had a slightly bearish session that did not change the uptrend.
The Dow Jones Industrial Average plunged 0.3% in stock trading on Tuesday. The S&P 500 index lost 0.1%. The Nasdaq composite edged down less than 0.1%.
The 10-year Treasury yield fell 6 basis points to 1.66%.
Read The Big Picture every day to stay in tune with market direction and major stocks and sectors.
Tech titans hold on
Microsoft stock fell 0.5% to 247.86. On Monday, MSFT stock rose 2.8% to 249.07, yielding a fixed-base buy point of 246.23, according to MarketSmith analysis.
Google’s stock slipped 0.4% to 2,209.26. GOOGL’s stock on Monday jumped 4.2% to 2,218.96, also releasing a flat base, with an entry of 2,145.24. Microsoft and Google stocks posted the first entries last week.
Facebook stock fell 0.9% to 306.26. On Monday, FB stock climbed 3.4% to 308.91, above a handle buy point of 299.81 after a six-month consolidation.
Tesla stock
Tesla stock edged up 0.1% to 691.92. On Monday, TSLA stock rose 4.4% to 691.05 after record delivery figures. But it was near session lows after hitting intraday 708.16, hitting resistance at its 10-week moving average. Tesla stock also needs to break above its short-term March highs and 50-day line before investors should pay close attention to the huge 2020 winner.
Best ETFs
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.2%, while the Innovator IBD Breakout Opportunities ETF (BOUT) fell 0.5%. The iShares Expanded Tech-Software Sector (IGV) ETF rose 0.6%, with MSFT leading the way. The VanEck Vectors Semiconductor ETF (SMH) fell 1.4% after several big gains.
The SPDR S&P Metals & Mining ETF (XME) fell 1% and the Global X US Infrastructure Development ETF (PAVE) lost 0.8%. US Global Jets ETF (JETS) climbed 0.8%.
Reflecting more speculative stocks, ARK Innovation ETF (ARKK) jumped 1.8% and ARK Genomics ETF (ARKG) stagnated. Tesla stock is the largest ETF holding of ARK Investments. While TSLA stock was calm on Tuesday, it has rebounded in the past few days, while many other ARK holdings are also recovering, including Year (YEAR), Baidu (BIDU) and Square stock.
Some of Tuesday’s gains in ARK-type stocks may reflect lower Treasury yields. The rise in the yield on 10-year Treasuries has weighed on highly valued growth stocks in recent months.
Stocks in the purchase range
Yeti’s stock rose 3% to 75.06, reaching 78.40 intraday. This briefly gave off a handle buy point of 76.87. YETI closed right on a downward sloping trendline, offering a more aggressive entry. The maker of premium coolers, glasses and now luggage reclaimed its 50-day lineup last week. The Yeti stock was the IBD stock of the day Tuesday.
The square stock rose 2.85% to 236.50, resuming its 50-day line and breaking a downtrend. This could offer early entry for SQ shares. The official point of purchase is 283.29.
Micron stock dipped 0.3% to 93.49 after hitting 96.10 intraday, briefly erasing the 95.85 entry from a short consolidation. MU action was exploitable from the 10-week line following the memory chip giant’s results and forecast last week. Micron stock is just 4.7% above its 10 week line.
The SE stock jumped 5.2% to 247.03, resuming its 50-day line. Depending on where you draw them, the actions of Sea Ltd. also erased a downtrend line. This may be an early entry into SE stock, which has an official buy point of 285.10.
Chipotle stock rebounded 2.4% to 1,487.48, bouncing off its 50-day line and breaking a downtrend. This offers early entry, with the official buy point at 1565.01. CMG stock had its best close since February 12, but needs to move a little higher to break past its March highs. Investors should note that Chipotle’s earnings are two weeks away.
Market rally analysis
The stock rally closed little on Tuesday after trading in a tight range. After consecutive S&P 500 gains of more than 1% to hit record highs and the Nasdaq jumped more than 1.5% for three consecutive sessions to clear key levels – with a number of strong breakouts – a silent session is very good.
A break from the stock rally for a few days would allow more grips to form on the bases, while recent breakouts could consolidate gains. As long as the Nasdaq holds above recent highs and in particular the 50 day line, the uptrend will remain intact.
The stock rally leadership remains fairly broad, with some tech titans, chips, commodities, industrial travel, and some retail names doing well.
Some popular growth names such as 10X genomics (TXG), Sea Ltd. or Square stock are taking shape. Others are like Tesla’s stock, still below the 50-day lines, but at least the first repairs are underway. Of course, just as some home improvement projects go unfinished, there is no guarantee that the next chapter in item inventory will be happy.
Investors are expected to participate in this market rally. Don’t expect a repeat of the race from April to September, but there is reason to be confident now. As you grow your holdings and revise your watchlists, try to have diversity within your core stocks. This will help you avoid large portfolio movements due to group selling, while keeping you in step with the market and major stocks.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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