Dow Jones Futures: Apple, Google, Tech Titans Drive Stock Market Rally; Three are in the buy range
Dow Jones futures will open Sunday afternoon, along with S&P 500 and Nasdaq futures. The stock rally showed strong gains in major indexes, fueled by strong gains from $ 5 trillion tech giants: Apple stocks, Microsoft (MSFT), Amazon.com (AMZN), Facebook (FB) and Google parent Alphabet (GOOGL).
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Apple (AAPL) passed a point of purchase at the end of last week. Google stock rose in its buy zone, while Amazon posted at least one early entry. Microsoft action has moved out of its buy zone while Facebook action appears to be extended. All FB shares completed last week hit an all-time high and a valuation of $ 1,000 billion for the first time. –
Megacap techs, as well as large cap chip winners such as Nvidia (NVDA) and AMD (AMD), propelled the S&P 500 and the Nasdaq composite to record highs, while the Dow Jones set a closing record.
But many growth stocks have seen massive sell-offs or trend reversals. On the positive side, some growth stocks have seen softer pauses, forging new buying points. Yet, while the stock rally is in a confirmed uptrend, investors must follow their buy and sell rules.
Microsoft and Google shares are on IBD Ranking and long-term leaders of EIA.
OPEC + talks will continue
OPEC + will continue talks on Monday, after failing to reach an agreement Thursday-Friday. Most oil ministers support a plan to gradually ramp up production from August, but the UAE wants a better deal for itself. A modest increase in production would likely only partially offset growing demand as the global economy accelerates. It is possible that no deal will be reached, causing crude prices to soar. There is also always the risk that OPEC +, which includes OPEC and Russia, will fracture.
China blocks Didi from app stores after IPO
China ordered app stores to remove Didi Chuxing just days after Didi Global (HAVE I GOT) hosted one of the largest years of IPO in the United States. The cybersecurity regulator said Didi violated restrictions on the collection and use of personal information, but gave no details. This happened just two days after an investigation was announced and Didi ordered to suspend new user registrations.
Didi’s IPO raised $ 4.4 billion when it went public on June 29, setting the stock price at $ 14 each, at the high end of its expected range. Didi stock climbed to 18.01 in Wednesday’s debut, but closed at 14.14. Shares jumped 16% on Thursday, but then fell 5.3% in the cybersecurity survey.
Dow Jones Futures Today
Dow Jones futures will open at 6 p.m. ET, as will S&P 500 and Nasdaq 100 futures.
The American stock markets are closed on Monday July 5, on the occasion of the holiday of July 4. But futures contracts on Dow Jones will trade normally on Monday, as well as stock markets around the world.
Keep in mind that overnight action on futures contracts on Dow and elsewhere doesn’t necessarily translate into actual trades in the next regular trading session.
Join David Ryan analyzing the exploitable stocks in the stock rally on IBD Live.
Coronavirus news
Coronavirus cases around the world have reached 184.44 million. Deaths from Covid-19 have exceeded 3.99 million.
In the United States, coronavirus cases have reached 34.58 million, with deaths exceeding 621,000.
Stock exchange rally
The stock rally had a strong week, topped off with an employment report on Friday showing strong hiring was not raising inflation fears either.
The Dow Jones Industrial Average rose 1% in stock trading last week. The S&P 500 index climbed 1.7% and the Nasdaq composite rose 1.9%. Small cap Russell 2000 fell 1.35% on smaller financials and large losses on growth stocks.
Apple and Microsoft stocks, the only two members of the $ 2 trillion club, are in the Dow Jones, S&P 500 and Nasdaq composite. FANG shares Facebook, Google and Amazon are all in the S&P and Nasdaq.
The 10-year Treasury yield fell 11 basis points to 1.43%, the lowest since March. Crude oil futures have hit new highs in three years.
Growth stocks generally rose, despite a few big individual losers.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) fell 2.1% last week with a few top growth names such as Digital turbine (APPLICATIONS) sell hard. The Innovator IBD Breakout Opportunities ETF (COMBAT) added 0.7%. The iShares Expanded Tech-Software Sector ETF (IGV) climbed 1.7%. Microsoft inventory is a major component of IGV. The VanEck Vectors Semiconductor ETF (SMH) jumped 2.6%.
Meanwhile, other sectors were mixed.
SPDR S&P Metals and Mining ETF (XME) edged up 0.9% and the Global X US Infrastructure Development ETF (PAVE) 0.15%, after both had big rebounds the week before. US Global Jets ETFs (JETS) fell 2.2%, as Delta coronavirus fears and restrictions slam travel names. SPDR S&P Homebuilders ETF (XHB) rose 2.4%, continuing to rebound after several weeks of weakness. The Energy Select SPDR ETF (XLE) fell 1.2% on profit taking, and the ETF Financial Select SPDR (XLF) was about the break-even point.
Reflecting more speculative historical stocks, ARK Innovation ETF (ARKK) rose 2.1% and ARK Genomics ETF (ARKG) 2.2%, but both closed in the bottom third of their weekly ranges.
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Google Stock increases in the buy zone
Google stock rose 2.2% last week to 2,505.15, hitting a new high. Shares rose 2.3% on Friday, erasing many recent stocks just above and below the flat base buy point of 2,431.48. The volume was lower than the average for the week while that of Friday was a little lower.
The line of relative strength for Google stock is just below an all-time high. This reflects the internet giant’s outperformance against the S&P 500 Index.
Apple stock bursts
Apple stock broke through a 137.17 cup buy point this week, jumping 5.15% for the week to 139.96. Volume was anemic, although Friday’s trade was near average. RS for AAPL stock is improving, near consolidation highs, but well below historical levels.
Amazon Stock offers early entry
Amazon stock rose 3.2% last week to 3,510.98. That’s just below a buy point of 3,524.96 cups with handle, according to MarketSmith analysis. But investors could have bought AMZN shares as they broke a mini downtrend on Friday.
The RS line for AMZN stock recently hit consolidation highs, although it is still below historical levels.
Microsoft stock moves out of buy zone
Microsoft stock rose 4.8% last week to 277.65, breaking out of a 5% buy zone. The shares crossed the buy point of 263.29 on June 22. This was a shallow cut, part of a base-to-base model.
The latest breakout pushed Microsoft stock above a market cap of $ 2 trillion, now at $ 2.09 trillion. It’s just behind Apple stock at $ 2.34 trillion.
The RS line for MSFT stock is now at its highest level in 10 months. Could this long-term leader be ready for another race?
Facebook shares exceed $ 1,000 billion
Facebook stock jumped 3.9% last week to 354.70, thanks to a 4.2% jump on Monday to reach record highs. Facebook won two antitrust lawsuits on Monday, pushing FB stock above a valuation of $ 1,000 billion.
Market rally analysis
The S&P 500 and the Nasdaq composite are at all-time highs, while the Dow Jones is poised to do so. The small cap Russell 2000 fell.
The Nasdaq composite is 5.5% above its 50-day line, while the Nasdaq 100 is 6.4% above this key level. When the Nasdaq is 6% or more above its 50 days, the chances of a pullback increase, with the risk that such a pullback will be greater. However, the Nasdaq is arguably in the early stages of a new uptrend, while its extension is less of a concern. Additionally, recent history has shown that the Nasdaq can stretch considerably longer before succumbing to a noticeable pullback.
Large-cap and large-cap tech stocks fueled major indexes last week. This masked some weakness in the Nasdaq and NYSE anticipated downline, signaling a lack of momentum in the recent move. In addition, the fierce sells or reversals of several growth stocks, including APPS stocks, UP FinTech (TIGR) and Featured Bulk Carriers (SBLK), was a bit disturbing.
But beyond Apple, Google, or Amazon, there are still plenty of actionable actions or quality names falling into place.
Some growth names have had more gradual pauses and form handles, such as Shopify (SHOP) and Zscaler (ZS). Several clothing retailers crisscross the points of purchase, including L Brands (KG) and American Eagle Outfitters (AEO). Housing stocks are starting to build up, with Tempur-Sealy (TPX) erupted last week.
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What to do now
Don’t focus too much on one particular stock or industry. If you have an important position, be careful with the announcements. Make sure you are using appropriate purchase points and keeping your overall cost base low. For new positions, definitely don’t buy extended, especially in highfliers.
On this long July 4th weekend, take the time to party with family and friends and enjoy the fireworks display. But the price of freedom, and financial independence, is eternal vigilance.
The stock rally offers opportunities and setups, but investors need to be disciplined. That means running screens to build your watchlists, buy stocks at the right time, and then stay alert to your holdings and the wider market. Most importantly, follow your sales rules.
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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