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Dow Jones futures will open Sunday night, along with S&P 500 and Nasdaq futures. The stock market remains divided, but the rally is widening significantly, with more and more stocks from a variety of sectors.
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The only notable exception is the Nasdaq and growth stocks, but even they had a provisionally positive week.
Delta Airlines (OF), Las Vegas Sands (LVS) and Marriott International (MAR) are part of several travel stocks moving bullish into similar patterns, with United Airlines (UAL) already clearing a new point of purchase.
Volkswagen (VWAGY) will host a battery-focused Power Day event ahead of the US markets open on Monday, similar to Tesla’s Battery Day last year. VW’s earnings are expected on Tuesday, while the ID.4 crossover will launch in China and the United States later this month. VW is leading the charge with traditional automakers rushing into electric vehicles. All of this could put pressure on Tesla’s sales and prices, as well as Tesla’s shares. VW stock has skyrocketed in recent months, outpacing the rapid rise General Motors (GM) and Ford engine (F).
Swing Trade Ideas Can Turn Into Trade Position Through Strength
Additions to the S&P 500
To finish, NXP semiconductors (NXPI), Penn National Gaming (PENN), Generac Holdings (GNRC) and Caesars Entertainment (CZR) are expected to join the S&P 500 Index before the opening on March 22. Stocks rose 3% to 7% on Friday night on the S&P 500 news. NXP stock could offer a buying opportunity as it bounces off its 10 week line, while Penn National, Genera and Caesars do appear. not exploitable.
Generac and GM are on the IBD rankings. Generac stock and Tesla are on the IBD 50 list.
Dow Jones Futures today
Dow Jones futures will open at 6 p.m. ET, as will S&P 500 and Nasdaq 100 futures.
Remember that an overnight action in 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 119.60 million. Covid-19 deaths have exceeded 2.65 million.
Coronavirus cases in the United States have reached 29.99 million, with deaths exceeding 545,000.
Stock market rally
The stock rally has continued to strengthen and widen over the past few days, with the Dow Jones, S&P 500 and Russell 2000 reaching all-time highs.
The Dow Jones industrial average rose 4.1% in stock trading last week, hitting a record high in the past four sessions. The S&P 500 index rose 2.6% while the Russell 2000 jumped 7.35%. The Nasdaq composite climbed 3.1%.
The 10-year Treasury yield jumped to a new 13-month high, up 10 basis points on Friday to 1.63%.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) climbed 8% last week and the Innovator IBD Breakout Opportunities ETF (BOUT) jumped 9.6%, both easily recovering their 50-day lines. . The iShares Extended Tech-Software Sector (IGV) ETF rose 2.7% and the VanEck Vectors Semiconductor ETF (SMH) rose 0.9%. both below their 50 day lines.
Reflecting more speculative stocks, Ark Innovation ETF climbed 8.2% and Ark Genomics ETF 7.8%, but both are well below their 50-day limits.
Read The Big Picture every day to stay in tune with market direction and major stocks and sectors.
Swing trade ideas can turn into a strength trade position
VW Power Day
Monday’s VW Power Day is Volkswagen’s de facto response to last year’s Tesla Battery Day, but without a year-long build-up. . It is expected to detail its battery and infrastructure strategy, perhaps showing advances in pack or cell technology.
VW will release annual figures on Tuesday.
VW stock has jumped 19% so far in March, reaching its best level since 2009, as investors buy into its EV strategy. GM and Ford shares are both up 15% this month. VW and Ford are considerably extended. GM’s stock posted a messy consolidation on Friday, but at 15% above its 50-day line, it also looks extended.
Tesla stock is up 2.7% in March and 16% last week. But it has encountered resistance at its 21-day exponential moving average and still well below its 50-day line. Many popular growth stocks look like the TSLA stock chart.
Stock market analysis
The stock market continues to have a split personality with the Dow Jones, S&P 500 and Russell 2000 at new highs while the Nasdaq is just below its 50 day line.
Economic reopening areas are doing well, including mining, manufacturing, travel, transportation, various retailers and more.
And no wonder. The US economy will go from a massive recession to a huge economic boom in about a year. Coronavirus restrictions are diminishing as vaccinations increase and cases decline, fueling a return to normal activity, including long-term sleepy trips. Meanwhile, the $ 1.9 trillion Biden stimulus just passed with 1,400 checks for most Americans, weeks after a more modest Covid aid package with 600 checks. The White House and Congressional Democrats look to an even bigger spending bill later this year, with billions of dollars for infrastructure.
Just to highlight travel stocks, Trip.com (TCOM) jumped past a tight three-week pattern on Friday. The three-week tightening is just above the previous base, so it offered investors the option of adding stocks or starting a new position in TCOM stock. United action looked at a similar short consolidation – but not a tight pattern – slightly above base.
Stock Delta, Marriott, Hilton (HLT) and Hyatt (H) settle in their own shelves. The same is true of the Las Vegas Sands action, which has a three-week lead time that looks messy on a daily chart but is extremely tight over a week.
Nasdaq lagging behind, but not losing
The Nasdaq posted a solid gain last week, closing near the top of its weekly range after starting with a 2.4% drop on Monday. The Nasdaq slipped back below its 50-day mark on Friday as Treasury yields soared. But it held up relatively well, closing just 0.6% on Friday, the session high.
The Nasdaq has yet to confirm that its attempted rally has legs and remains vulnerable to rising Treasury yields. A day of tracking at the Nasdaq would alleviate fears that tech stocks are dragging the wider market down, as they did earlier in March.
But even if the Nasdaq rebounds, the growth names still look damaged. An immediate return to new highs for Tesla stocks or other highly regarded names wouldn’t seem normal. Also remember that Tesla and a lot of those stocks performed amazingly last year. So there are several reasons why they may need weeks or months to relocate to appropriate bases.
What to do
The good news about the divided market is that while growth stocks are in injured reserves, many economic recoveries have erupted and delivered solid gains.
Investors therefore do not have to stay on the sidelines. While CAN SLIM investors look to growth stocks for obvious reasons, many all-time “model book” winners have been turning games. You need to be flexible and recognize which stocks are working and which are not.
Look for stocks with strong relative strength. Pay close attention to those who have robust profit estimates and those who are setting themselves up on a solid foundation.
If you don’t feel comfortable buying non-growth stocks, you can buy ETFs like SPY, IWM, or various sector games like XME (mines), JETS (airlines) or XHB ( home builders). And you can still stay in cash until tech stocks really recover.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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