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Dow Jones futures rose on Wednesday night, as did S&P 500 and Nasdaq futures. The stock rally rebounded slightly from key levels on Wednesday, ending a streak of Nasdaq losses and, for now, ending a string of weak close in major indexes.
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Energy stocks and steelmakers were the big winners on Wednesday, with Devon Energy (DVN) and Arcelor Mittal (MT) flashing buy signals. But it was a big step forward. Palantir Technologies (PLTR), Microsoft (MSFT) and Copart (CPRT) also offered buying opportunities.
Microsoft and Devon stocks are listed on the IBD rankings. Copart, Arcelor Mittal and PLTR shares are on SwingTrader. Microsoft and Copart stocks are long-term leaders of IBD. The CPRT action was the action of the day for Wednesday.
The video embedded in this story analyzed bullish market action and looked at Devon Energy, Copart and MT stocks.
Dow Jones Futures Today
Futures contracts on Dow Jones increased 0.1% from fair value. S&P 500 and Nasdaq 100 futures rose 0.1%.
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 mixed to slightly lower on Wednesday, but the slowdown gathered momentum.
The Dow Jones Industrial Average rose 0.7% in stock trading on Wednesday. The S&P 500 index jumped 0.85%. The Nasdaq composite gained 0.8%. The Russell 2000 small cap jumped 1.1%.
Crude oil futures have risen sharply due to lower US inventories and Gulf of Mexico production which has remained sharply reduced since Hurricane Ida. Copper prices have also increased.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) climbed 1.5%, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 1.3%. The iShares Expanded Tech-Software Sector (IGV) ETF climbed 1%. The MSFT share is one of IGV’s main holdings. The VanEck Vectors Semiconductor (SMH) ETF rose 0.35%.
The SPDR S&P Metals & Mining ETF (XME) jumped 3.3% and the Global X US Infrastructure Development ETF (PAVE) rose 1.5%. The US Global Jets ETF (JETS) rose 0.5%. The SPDR S&P Homebuilders ETF (XHB) rose 0.8%. The Energy Select SPDR (XLE) ETF jumped 3.7% as the DVN share was held. The ETF Financial Select SPDR (XLF) gained almost 1%.
Reflecting more speculative historical stocks, ARK Innovation ETF (ARKK) rose 0.8% and ARK Genomics ETF (ARKG) rose 0.5%. Highly valued growth stocks are once again struggling.
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ArcelorMittal share
MT stock jumped 6.4% to 34.38, bouncing above its 50-day line and breaking a short bearish trend, offering early entries. Mittal stock also recovered an old buy point of 34.06, although it is not clear whether investors should place that much weight.
Like many other steelmakers, MT stock rose from late July to early August, then fell back, giving up much of its gains.
Wednesday, Steel dynamics (STLD) guided higher in the third quarter and was bullish towards the fourth quarter. The STLD share recovered, as did Nucor (NUE), American steel (X) and above, but the MT action had the clearest early entry.
Copart Stock
The CPRT stock jumped 3% to 148.91 in the largest volume in six months. It briefly broke a buy point of 149.16 from a flat base just before the close, according to MarketSmith analysis. But it’s already doable: Copart stock has issued buy signals by bouncing off its 50-day line, clearing short-term resistance, and breaking a short trendline. CPRT stock initially fell on September 9 following profits at the salvage vehicle retailer, but rebounded to close just at its 50-day line.
Devon Stock
DVN stock jumped 7.3% to 30.33, close to an official buy point of 30.65. But Devon stocks broke a downtrend in the handle in significant volume, offering an early entry. Crude oil prices are recovering on tight supplies, while natural gas prices are booming around the world, providing a renewed tailwind for energy stocks. Cimarex Energy (XEC) crossed an official buy point on Wednesday, although it quickly emerged from consolidation lows in late August. The XLE ETF is back above its 50 day line, breaking a downtrend.
Microsoft actions
Microsoft stock rose 1.7% to 304.82, a record close and just below the all-time high of 305.84 on August 20. Stocks continued to rebound from their 10 week line and broke a short trendline in tight consolidation, offering an aggressive entry. . Late Tuesday, Microsoft announced a $ 60 billion buyback and an 11% increase in its quarterly dividend.
Palantir Action
PLTR stock rose 3.1% to 27.07, clearing resistance from the past two weeks and offering an alternate entry around 26.98. The data analytics firm has generally traded slightly above a base buy point of 26.04 cup with handle since late August, but hasn’t felt like a “breakout.”
Market rally analysis
The stock rally secured a well-deserved victory on Wednesday. It wasn’t a massive bounce and the volume was mixed. But the market rally found support where it was needed. The S&P 500 bounced back from its 50 day line and closed above its 21 day line. The Russell 2000 has gone from almost 200 days to just over 50 days. The Nasdaq rose just below its 21-day line. The Dow Jones rose, but is still below its 50 day line.
Additionally, stocks closed near session highs, a big change from the downtrend of strong openings and weak closings.
The S&P 500 has successfully rebounded around its 50-day line on several occasions in recent months. So it all seems to work like clockwork. And maybe this is the start of another good stretch. But don’t assume that will happen.
Oil and steel inventories were the big winners on Wednesday. These sectors are mercurial, driven by underlying prices. So if you are going to be playing stocks like Mittal or Devon Energy, it is very important to buy as early as possible.
But the market rally was widespread, particularly at the close.
Growth stocks have generally done well, although MSFT stocks have certainly helped. The chips had a quiet session, but are holding on to their highs.
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What to do now
The stock market rally made a nice rebound. Investors could have added some exposure today, especially if they were defensive over the past week. If the market continues to rise from these levels, investors could gradually step in and add more. Of course, Wednesday could be a big blow, with the major indices quickly surpassing recent lows and breaking key support. So don’t rush to increase exposure.
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.
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