Dow Jones futures edged higher Monday morning, along with S&P 500 futures and Nasdaq futures. Apple (AAPL), Amazon.com (AMZN) and Shopify (SHOP) headline a new rush of earnings.
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The stock market rally showed strong action in the past week, amid a massive wave of earnings, a fresh Fed rate hike and big economic data.
Apple and Amazon report Thursday night on what will be another big week of earnings. AAPL stock ended the week at an all-time closing high. Amazon stock made a bullish bounce from the 10-week moving average. That would be actionable, but upcoming earnings raised the risks. SHOP stock is close to an aggressive entry, with Shopify earnings due early Wednesday.
On Semiconductor (ON) will report before Monday’s open. ON stock is extended, trading near record highs.
Meanwhile, Microsoft (MSFT) and Tesla stock have forged new buy points, though Tesla (TSLA) reportedly is set to cut prices in Hong Kong.
In addition to AMZN stock, Shopify, Microsoft and Tesla, here are five more near buy points: video-based streaming safety firm Samsara (IOT), oil services giant SLB (SLB), chipmaker Marvell Technology (MRVL), chip design firm Synopsys (SNPS) and Tesla archrival BYD (BYDDF).
Tesla and SHOP stock are on IBD Leaderboard. SNPS stock is on SwingTrader. Microsoft stock is on the IBD Long-Term Leaders list. Tesla and IOT stock are on the IBD 50. TSLA stock is on the IBD Big Cap 20.
The video embedded in this article discussed the weekly market action and analyzed MRVL stock, SLB and Tesla.
Dow Jones Futures Today
Dow Jones futures rose 0.15% vs. fair value. S&P 500 futures climbed 0.1% and Nasdaq 100 futures edged higher.
Crude oil futures rose 1%, topping $81 a barrel.
China factory activity contracted for a fourth straight month in July. The official manufacturing gauge edged up 0.3 point to 49.3, still below the break-even 50 level, but just above views for 49.2. Hong Kong’s Hang Seng climbed 0.8% as expectations grow for China stimulus efforts, with many U.S.-listed China stocks flashing buy signals in recent days.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
Stock Market Rally
The stock market rally had a downside reversal Thursday, but ultimately closed with solid-to-strong weekly gains. The major indexes are all close to 52-week highs.
The Dow Jones Industrial Average snapped a 13-day win streak Thursday, but rose 0.7% in last week’s stock market trading. The S&P 500 index climbed 1%. The Nasdaq composite jumped 2%. The small-cap Russell 2000 closed 1% higher.
The Invesco S&P 500 Equal Weight ETF (RSP) edged up 0.2%, lagging the S&P 500 after just hitting a 2023 high momentarily on Thursday.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) climbed 1.1%, about half of the Nasdaq 100’s 2.1% advance. QQEW did hit a fresh 52-week high briefly on Thursday.
Tech, travel, transports and housing are doing well, but some medicals, energy and metals plays also are looking good, among others.
The 10-year Treasury yield jumped 13 basis points to 3.97%, after just topping 4% on Thursday.
U.S. crude oil futures jumped 4.55% to $80.58 a barrel this past week, a three-month high. Crude has risen 16.5% in its five-week win streak. Gasoline futures popped 5.5% to a nine-month high.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) advanced 0.9% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 1%. The iShares Expanded Tech-Software Sector ETF (IGV) edged up 0.1%. MSFT stock is a major IGV holding, with IOT also in the ETF. The VanEck Vectors Semiconductor ETF (SMH) jumped 4.4%, with MRVL stock an SMH holding. SNPS stock is in both IGV and SMH.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) popped 3.15% last week and ARK Genomics ETF (ARKG) advanced 0.5%. Tesla stock remains the No. 1 holding across Ark Invest’s ETFs, with SHOP stock a big member as well. Cathie Wood’s Ark also owns some BYD stock.
SPDR S&P Metals & Mining ETF (XME) gained 2% last week. U.S. Global Jets ETF (JETS) descended 2.6%. SPDR S&P Homebuilders ETF (XHB) stepped up 2.4%. The Energy Select SPDR ETF (XLE) rose 1.8% with SLB stock a big component. The Health Care Select Sector SPDR Fund (XLV) slipped 0.8%. The Industrial Select Sector SPDR Fund (XLI) climbed 0.6%.
The Financial Select SPDR ETF (XLF) dipped 0.2% and the SPDR S&P Regional Banking ETF (KRE) leapt just over 5%.
These Five Stocks Move Into Buy Zones
Microsoft Stock
Microsoft stock fell sharply on Wednesday-Thursday, falling below the 50-day line for the first time in months. Shares rebounded on Friday, back above the 50-day but hitting some resistance at the 21-day. It’s the second test of the 10-week line since its last base breakout.
A bullish move from current levels could offer an early entry. Microsoft came down hard in heavy volume, so strong trading to the upside would be good to see. Also a longer pause would be helpful, so the downtrend isn’t quite as steep.
Shares edged lower early Monday.
Tesla Stock
After a big downside week in higher volume on earnings, Tesla stock rose 2.6% to 266.86 this past week, thanks to Friday’s 4.4% gain. Shares are just above the 21-day line after nearly touching the 10-week line. TSLA stock now has a handle with a 299.10 buy point on a huge consolidation going back to September. A longer handle or a short base would be ideal. An actual test of the fast-rising 10-week would be positive as well.
Tesla reportedly will cut prices various Model 3 and Model Y variants in Hong Kong starting Aug. 4, the Hong Kong Economic Times reported on Monday. The cuts would range from 6%-11.9%. The EV giant cut Australia prices in early July, while increasing inventory discounts in Europe and the U.S. This comes even as CEO Elon Musk has said that Q3 production would be trimmed. All this suggests further pressure on margins.
Shares tilted higher Monday.
Tesla Vs. BYD: EV Giants Vie For Crown, But Which Is The Better Buy?
Stocks To Watch
IOT stock rose 2.3% to 27.71, finding support at the 50-day/10-week lines and closing back above the 21-day line on Friday. Investors could have used Friday’s move as an early entry. A trendline entry also exists around 29, with the official consolidation buy point at 30.91, according to MarketSmith analysis.
SLB stock advanced 2% to 57.15. The oil services giant formerly known as Schlumberger has a 57.91 handle buy point on a weekly chart. Investors could use that, or last week’s high of 58.22, as a legitimate entry. A longer pause would let moving averages close the gap somewhat.
MRVL stock climbed 2.4% to 64.91 last week. Marvell has a 66.81 buy point from a cup-with-handle base forged after a big earnings gap in late May. MRVL stock is breaking the downtrend of the handle, offering an early entry, though Thursday’s high of 66.24 is another option.
SNPS stock dipped 0.7% to 450.90 for the week, holding the 21-day line. Synopsys stock has a shallow cup-with-handle base with a 465.67 buy point. A move above Thursday’s high of 460.25 would offer a slightly early entry
BYD stock popped 4.2% to 35.35 for the week, including Friday’s 5.1% jump. BYDDF stock cleared a 34.98 buy point from a flat base, base-on-base formation. China EV stocks, and other China names, are heating up in recent days and weeks. BYD and China rivals will release July sales next week.
Time The Market With IBD’s ETF Market Strategy
What To Do Now
The stock market rally continues to advance, though the Nasdaq has had some herky-jerky action on a daily or intraday basis in the past couple of weeks. That’s not a big deal for longer-held positions generally, but has made new purchases tricky.
Investors should be careful about adding exposure right now, especially if you are already heavily invested. You could nibble on some new buys, or add a few more shares to winning positions, perhaps trimming some laggards.
Earnings season remains fierce. Apple, Amazon and Shopify are just a few of the hundreds of companies on tap this coming week.
So stay engaged.
Get ready for the coming week by running your screens and building up your watchlists, as more stocks set up.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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