The stock market rallied on solid gains and clearing key levels in the last week. The S&P 500 briefly encountered resistance at the 200-day line, but broke above that key level on Friday. Many blue-chip stocks are burning buy points.
X
Dow futures will open Sunday evening along with S&P 500 futures and Nasdaq futures. Bitcoin continued its recent rapid rally over the weekend.
Investors can gradually add exposure as the market improves. While many large stocks are already extended, Wendy (wn), Exxon Mobil (XOM), Quanta Services (PWR), Centennial Holdings (CELH) f Isolate (PODD) can all be executed from early entries. New Wendy’s and PWR share flat bases, joining XOM and Insulet stocks. CELH stock needs another week to build a proper base.
CELH shares are on SwingTrader and Defect 50. Celesius, Insolute and Wendy’s were IBD’s three most recent stock picks today.
to work, Tesla ( TSLA ) announced deep price cuts in the U.S. and Europe on Friday, following a week of price cuts in China and key Asian markets.
Tesla shares closed slightly lower, but bounced back strongly for the week. But the electric car giant is facing an agonizing shift as investors view Tesla as an automaker rather than a technology company.
The video embedded in this article discussed a strong week of market rally and analyzed WEN stocks, Quanta Services and Celsius.
Bitcoin price
On Saturday, the price of bitcoin briefly exceeded $21,200. The leading cryptocurrency is currently trading around $20,800, up 8% from 24 hours ago. Bitcoin was trading just below $17,000 on January 8th.
Bitcoin’s rise has coincided with the rise of the stock market, which has seen a return to more speculative investments. This includes growth stocks, especially speculative-type plays like the ARKK ETF. Some meme stocks had a particularly big week behind the bed bath (BBBY). Shares of BBBY soared 179% even as the retailer announced it was headed for bankruptcy.
Dow Jones futures today
Dow Jones futures open at 6:00 PM ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
US stock and bond markets will be closed on Monday for the Martin Luther King holiday, but other markets around the world will be open.
Remember that overnight trades in Dow futures and elsewhere do not necessarily translate into actual trades in the next regular session of the stock market.
Join IBD experts as they analyze influential stocks in the rising stock market on IBD Live
Stock market rise
The stock market rally had a solid week, with major indexes closing near session highs.
The Dow Jones Industrial Average rose 2% last week. The S&P 500 rose 2.7%. The Nasdaq Composite gained 4.8%. The small-cap Russell 2000 rose 5.3%.
The 10-year Treasury yield fell 6 basis points to 3.51%, even with Friday’s jump. Markets aggressively expect quarter-point rate hikes from the Fed in February and March, but then see policymakers stall. Falling Treasury yields and a brighter economic outlook elsewhere are putting pressure on the dollar, giving stocks and commodities another boost.
US crude oil futures rose 8.3% last week to $79.86 per barrel. Copper prices increased by 7.65%.
Exchange traded funds
Among ETFs, the Innovator IBD 50 ETF (Fifty) rose 4.4% last week, while the Innovator IBD Breakout Opportunities ETF (Fifty) gained 2.1%. The iShares Expanded Technology and Software ETF ( IGV ) rose 4.9%. VanEck Vectors Semiconductor ( SMH ) rose 6.7%.
Stocks reflecting more speculative stories, the ARK Innovation ETF ( ARK ) rose 14.7% last week, while the ARK Genomics ETF ( ARKG ) gained just over 16%. TSLA stock is a large holding through Ark Invest’s ETF. Cathie Wood’s Ark has been filling Tesla holdings in recent days and weeks.
The SPDR S&P Metals & Mining ( XME ) ETF rose 6.3% last week to a seven-month high. Global Infrastructure Development Fund X US (cradle) rose 4.2%. US ETF Global Jets (Aircraft) rose 9.4%. The SPDR S&P Homebuilders ETF ( XHB ) gained 4.6% despite the weakness KB Major (KBH) profit. The Energy Specific SPDR ETF (XLE) rose 0.14%, with XOM as the main component. SPDR Financial Choice Financial Fund (XLF) 2.1%. The SPDR Healthcare Sector Select Fund ( XLV ) fell 0.2%.
The five best Chinese stocks to watch now
Stocks in buy zones
Shares of Wendy’s made a significant advance, rising 6% to 23.08 after hitting an intraday low of 21.36 on Friday. WEN shares have retook the 50-day line, broken above the 21-day line, and broken above the trend line. This provided early access to the new flat base. According to MarketSmith analysis, the official buy point is 23.88.
On Friday, Wendy’s accelerated fourth-quarter sales growth, doubled its dividend and announced a $500 million buyback.
XOM shares rose 2.4% to 113.16 last week, marking their fifth straight weekly gain. Shares are just below the official buy point of 114.76 and will not appear to extend above the 50-day line with this move. But investors can now access Exxon shares.
Shares of PWR rose 6.7% last week to 148.50, making an early entry above the 50-day line. Shares also recovered the 144.41 buy point, which is no longer valid.
On Wednesday, CELH shares broke above the 50-day line and 21-day line, breaking the downtrend, providing plenty of reasons for an early entry. Shares held support at 21 days, then rallied on Friday. The interest stock may now be on the move after gaining 13.2% for the week.
Insulet stock rose 4.65% last week to 305.89, retreating from the 21- and 50-day lines. Shares are now exercisable. But investors can now wait for a break of the trend line with Friday’s high of 309.44.
Is Tesla stock sliding into cars?
Tesla shares rose 8.3% last week to 122.40, continuing their rally from a Jan. 6 bear market low of 101.81. Shares fell 0.9% from the day’s lows on Friday, despite Tesla announcing deep price cuts in the US and Europe. This comes a week after Tesla cut prices in China and key Asian markets.
The price cuts should boost sales, especially with more Tesla EV options available for a $7,500 tax credit in the US. This means a significant price reduction for American consumers. But Tesla’s cost margins are likely to be affected.
On Tuesday, investors will receive weekly electric car registrations in China, which should show a significant jump in Tesla sales, as well as potentially impacting rivals. But will Tesla get a lasting boost, especially in China and Europe? Orders lag significantly behind deliveries in late 2022, so Tesla needs a significant increase in new orders in 2023 to maintain its current delivery pace.
With fierce competition set to intensify in China in 2023, Tesla’s price cuts could trigger a wave of margin-killing cuts. Europe is also becoming increasingly crowded. Even the electric car market in the US will be more competitive a year from now, as the drop in used car prices is already having a big impact on new car prices.
But sales of Tesla electric cars aside, TSLA stock has a bigger problem. Investors are increasingly viewing the electric car giant as an automaker rather than a technology company. Tesla’s current price-to-earnings ratio is not very high for 33 technology growth companies. But it is unusually high for a car manufacturer. The advantages and margins of the auto industry tend to erode relatively quickly, which may be the case with Tesla right now.
TSLA stock may deserve a higher price auto, reflecting the EV giant’s sales growth and sales growth. But even then, it would indicate a lower price than it has been boasting until recently.
common engines (GM), the castle (F) Father of Chrysler and Fiat stellants ( STLA ) all have single-digit PE ratios. Toyota (TM) at 10 p.m.
Tesla vs. BYD: EV giants vying for the crown, but which one is better to buy?
Market rally analysis
The stock market had an encouraging week on January 6 with strong gains. Major indices rose strongly and recovered key levels. A large number of blue-chip stocks issued buy signals during the week, and most of them maintained or extended their gains.
The S&P 500 index rose above its 50-day moving average and rose to the 200-day line. The benchmark held resistance at this key level on Thursday and Friday, but eventually barely broke through it.
The Dow Jones, Russell 2000 and S&P MidCap 400 are all above their moving averages and nearing short-term highs in December.
The NASDAQ retook its 50-day moving average and rose above 11,000. It was near the bear market lows that trailed earlier in the year.
Stocks opened sharply lower on Friday as gains initially hit airlines, health insurers and bank stocks, Tesla price cuts led to losses in auto stocks and analyst downgrades hurt major defense contractors.
Even without the negative headlines, it could be argued that the market is about to pull back after strong gains and with the S&P 500 at the 200-day line.
However, the market quickly recovered and closed higher.
Industry, a large housing sector, many pharmaceuticals, as well as some retail and restaurants are showing strength.
Tech names are still rare among blue-chip stocks, although they are making a comeback. Chip ETF SMH cleared the 200-day line last week, while IGV ETF and ARKK are above their 50-day moving averages.
The S&P 500 has yet to definitively clear the 200-day line. December sees big gains for all major indices.
While the stock market appears less worried about the Fed, earnings season will take center stage with a path toward a halt in rate hikes.
It’s time to get into the market with IBD’s ETF Market Strategy
what are you doing now
As stocks continue to improve, investors can make new purchases. But do it gradually. While the market rally has shown strength and resilience in recent days, a decline for major indices, major sectors or individual stocks would not be surprising.
Earnings season will ramp up over the next few weeks, creating the potential for significant volatility. Shares of Exxon and Tesla will report over the next three weeks, along with the tech giants apple (AAPL), Microsoft (MSFT), Amazon.com (AMZN) and the parent of Google Alphabet (Google).
So don’t focus too much on a particular sector even if it is doing well. We try to have a variety of leading stocks.
Collect your watch lists. Look for stocks that can execute, build, or potentially execute on a break or decline. Broad power should provide a range of possibilities, at least outside of technology.
Read the big picture every day to track the market trend, leading stocks and sectors.
Follow Ed Carson on Twitter @worker For stock updates and more.
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