The Dow Jones Industrial Average saw gains before Fed Chair Jerome Powell made any key statements. Ferrari (RACE) whizzed by Tesla (TSLA) to take the checkered flag as a top pick. Leaderboard Share MercadoLibre (MELI) tested a new purchase point Apple (AAPL) was a premier blue chip.
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Breakouts were plentiful amid the early bullish action, although these came under pressure. Hubbell (HUB), Outdoor decks (DECK) and Trane Technologies (TT) all tested entries.
The market is now gearing up for Powell’s Tuesday and Wednesday before Congress. The main 10-year government bond yield reversed, rising about 2 basis points to 3.98%.
Stocks opened higher even as San Francisco Fed Chairwoman Mary Daly said at Princeton University on Saturday that “further monetary tightening, sustained for an extended period, will likely be necessary.” She is not currently a voting member of the Federal Open Market Committee.
Still, traders appear to be betting on two or three more quarter-point hikes in the future. A significant rally or painful drawdown may be imminent.
Nasdaq fades as small caps plummet
The Nasdaq saw its early gains fade and was little changed in afternoon trade. Dexcom (DXCM), a leader in the market for continuous glucose monitoring devices for diabetics, was a notable move, plummeting about 8%.
The S&P 500 rose 0.1%. Lumen Technologies (LUMN) performed well here, up about 6%. But the stock is trading around 3 per share.
S&P 500 sectors were mixed. Technology and communications services performed best, while materials lagged.
Small caps came under pressure with the Russell 2000 down 1.5%. Growth stocks saw daily gains evaporate, with the innovator IBD 50 ETF (FFTY) slipping slightly.
Dow Jones Today: Apple stock slams amid bull market
The Dow Jones Industrial Average saw early gains ease but remained modestly positive, up 0.1%.
Apple stock was among the top performers, up around 2%. The stock is now moving away from the 200-day moving average. Goldman Sachs initiated it as a buy with a target of 199. Analyst Michael Ng said gross profit growth over the next five years will be driven by the services business.
But note (MRK) was the best performer on the Dow Jones today. It rose nearly 4% after the release of data on an experimental cholesterol pill.
dow inc (DOW) and Boeing (BA) were the biggest laggards in the index.
Leaderboard stock pass entry
MercadoLibre also had a productive day, up about 3%. With that, a buy point of 1,250.58 was clear.
On a weekly chart, this is considered a flat base. On a daily chart, it’s more of a handle. Perhaps it is best described as a base-on-base formation. This is today’s IBD 50 Stocks to Watch picks.
MercadoLibre is the largest e-commerce company in Latin America. It shows strength despite competition Amazon.com (AMZN).
The retail stock has made strides since posting strong gains last month. Exposure to MELI was increased on the leaderboard to take advantage of the upside.
Tesla stock loses RACE amid Ferrari pick
Ferrari may have lost Sunday’s first F1 Grand Prix of the year but won in what is perhaps an even more important category.
The stock was named the US auto industry’s top pick ahead of Tesla stock, according to the US auto industry MorganStanley (MS).
Analyst Adam Jonas said the Italian luxury sportscar firm has overtaken the EV giant amid a “relatively pessimistic view of car fundamentals”.
According to Jonas, Ferrari has the longest backlog, the most profit transparency and the most pricing power of “any company we cover.”
Jonas rates RACE stock as above average with a target of 310. Ferrari shares rose slightly. It is trading above a cup with Henkel entry of 270.45, MarketSmith analysis shows.
Tesla stock fell more than 1%, losing ground on the 200-day moving average. TSLA is up about 80% so far in 2023.
Outside Dow Jones: 3 stocks test buy points
Hubbell briefly passed a cup and handle entry of 256.53. The electric device game made the train in low volume. Overall performance is strong, with an IBD Composite Rating of 93 out of 99.
Deckers Outdoor is holding above a flat buy point of 433.41 on its weekly chart. The relative strength line reached new highs, a bullish sign. Earnings and price development are both very strong.
Trane Technologies tested a flat entry of 194.76 but is back below that level.
The RS line is also on the move at new heights. Big Money has been a net buyer of TT of late, with the stock’s accumulation/distribution rating being B+.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
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