Dow Jones futures fell on Friday morning along with S&P 500 and Nasdaq futures. The stock market rally continued to gain momentum with broad gains on Thursday.
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JNPR shares and Arista Seti (ANET) are flirting with early entries near their 50-day moving averages. Devon Energy (DVN) rebounded sharply from its 50-day/10-week line. Rambus (RMBS) has closed a new pen buy point, while ANTM shares are one of several health insurance companies pushing into the buy zone.
Meanwhile, Tesla stock rebounded some key moving averages on Thursday, but does not offer a clear early entry.
Tesla (TSLA), Hymn (ANTM) and RMBS shares are on the IBD leaderboard. ANET shares are at IBD 50. DVN shares are at Big Cap 20. Juniper Web (JNPR) was IBD’s stock of the day on Thursday.
Dow Jones futures today
Dow Jones futures fell 0.6% from fair value. S&P 500 futures fell 0.7% and Nasdaq 100 futures shed 0.85%.
Crude oil prices in the US have not changed, negating yesterday’s gain.
The 10-year Treasury yield fell 5 basis points to 2.14%.
President Joe Biden was scheduled to have a telephone conversation with Chinese President Xi Jinping at 9 a.m. ET. Biden should have warned Xi against actively aiding Russia in its invasion of Ukraine.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into real trading in the next regular stock market session.
Join IBD experts as they analyze valuable stocks in the stock market rally in IBD Live.
stock market rally
The stock market rally slowly gained momentum, closing again near session highs.
The Dow Jones Industrial Average and the S&P 500 rose 1.2% in stock trading on Thursday. The Nasdaq Composite Index rose 1.3%. Small-cap Russell 2000 shares rose 1.6%.
Large-Cap Indices had solid sessions even with an Apple (AAPL), Microsoft (MSFT), the parent company of Google Alphabet (google) and Nvidia (NVDA) is lagging behind. Tesla shares were the highest-grossing megacap stock on Thursday. Amazon (AMZN) and Facebook parent Platform Meta (FB) modestly.
US crude oil prices jumped 8.4% to $102.98 a barrel.
The 10-year Treasury yield recouped the morning’s losses to close at 2.19%. The two-year yield fell 3 basis points to 1.94%, slightly widening the narrow yield spread.
ETFs
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) added 2.2%, while the Innovator IBD Breakout Opportunities (BOUT) ETF gained 2.4%. iShares Advanced Technology & Software (IGV) ETF rose 2.3%. The VanEck Vectors Semiconductor (SMH) ETF rose 0.6%.
The SPDR S&P Metals & Mining ETF (XME) was up 4.4% and the Global X US Infrastructure Development ETF (PAVE) was up 1.7%. The US Global Jets ETF (JETS) fell 0.2% on rising energy prices. The SPDR S&P Homebuilders ETF (XHB) edged up 1.55%. The Energy Select SPDR (XLE) ETF was up 3.4% and the Financial Select SPDR (XLF) ETF was up 1.25%. The Health Care Select Sector SPDR Fund (XLV) rose 1.6%.
Reflecting more speculative equities, ARK Innovation ETF (ARKK) was up 4.8% and ARK Genomics (ARKG) ETF was up 4.9%. Tesla shares remain the largest asset among Ark Invest ETFs.
Top 5 Chinese stocks to watch now
JNPR shares
Shares of Juniper Networks rose 1.4% to 34.65 on Thursday, rebounding from their 50-day high. A move above Thursday’s intraday high of 34.84 would signify an early entry from the 50-day period and its trend line. According to MarketSmith analysis, the official buy point for JNPR shares of consolidation is 36.13.
JNPR’s stock relative strength line is right at an all-time high. Analysts expect 14% earnings-per-share growth in 2022 and 2023 for Juniper Networks, which has a modest 20 P/E ratio.
ANET Shares
Shares of network peer Juniper Arista Networks rose 1.5% to 126, bouncing off the 50-day line and breaking the trend line, suggesting an early entry. The official buy point for ANET shares is 148.67, although 133.97 is another early entry. The RS line for Arista shares is near the highs. Arista has a higher PE than Juniper (43), but analysts are forecasting faster earnings-per-share growth of 26% this year.
Shares Devon Energy
Shares of Devon jumped 9.65% to 57.52, a bullish rebound from pullbacks to the 50-day and 10-week lines after strong gains. DVN stock boasts skyrocketing earnings per share, strong earnings guidance and a low PE of 15.
A number of other energy stocks rebounded on Thursday from their 50-day or 21-day lines.
Rambus Stock
Shares of RMBS rose 2.1% to 29.63, setting a new cup-and-handle buy point at 29.11. The previous entry with the 28.32 handle on Monday failed. The RS line is right at the highs.
Anthem Promotions
ANTM shares rose 1.55% to 478.13, breaking buy points at 470.12 and 472.11. Investors can use 478.10 as another entry. The anthem rose at a slight volume, while UnitedHealth (UNH) also moved into the buy zone with light trading. The RS line for ANTM shares has been rising steadily for several months.
Tesla shares
Tesla shares rose 3.7% to 871.60, retracing their 21-day and 200-day moving averages, albeit on below-average volume. Thursday’s move may look like an early entry, but it will be very risky as TSLA stock is still below its rapidly falling 50-day line and some other short-term resistance.
At the moment, the official buy point is 1208.10 with a shallow trendline suggesting an early entry around 1150. Ideally, Tesla shares will form the right side of the bottom and form a handle.
Tesla CEO Elon Musk suggested on Thursday that he is working on his “Master Plan Part 3” laying out his next big long-term vision.
Tesla Shanghai closes for two days due to Covid precautions as China shuts down key regions but not Shanghai amid significant rise in cases. Deliveries of Tesla Berlin are expected to begin on March 22.
Market Rally Analysis
The stock market rally edged up slightly on Thursday after confirming a fresh market rally the next day on Wednesday. Just holding the 21-day moving average or even most of Wednesday’s gains would be okay, especially given the volatility in the market.
The Dow Jones rose above the high of early March, and the Russell 2000 crossed the 50-day line. The S&P 500 is approaching both of these levels.
Wednesday was the end of Day 15 for the S&P 500 and Dow Jones. The Nasdaq Composite Index led gains on Wednesday, but it was only the second day of attempted gains after it undermined the Feb. 24 lows on Monday. Nasdaq may launch its own FTD starting Friday.
Not all subsequent days work. The January 31 FTD soon failed, though not immediately. But this is still a positive signal that institutional investors are supporting the new market rally.
In addition, more leading stocks are giving or giving buy signals now than at the beginning of February. But it’s still unclear which sectors are actually leading the way. Energy stocks were strong again as crude oil rose above $100 again. Other commodity stocks still look solid.
Shares of some pharmaceutical and biotech companies have performed well, while shares of health insurance companies such as ANTM shares are pushing to buy. Shares of chip and network companies such as Rambus, Arista and JNPR are giving buy signals.
Discounters, building materials, defense, and even some REITs are potentially interesting.
High-PE stocks continue to recover after leading the decline for several months. But the rising rate environment is not ideal for these stocks. However, if it works, Tesla stock looks about as good as anyone else.
Ideally, the stock market rally will be wide-ranging, with multiple industries leading the way. The NYSE and Nasdaq advance-decline lines had some good days, but overall they struggled for over a year.
Market Time with IBD ETF Market Strategy
What to do now
As the stock market rally is now in a confirmed uptrend and increasing profits, investors may increase their risk. But do it carefully, with modest increases as the market develops and your position develops.
Don’t focus too much on any one sector. Any particular sector faces a huge risk of a negative reversal or simply falling behind overall growth. Try to build a diverse portfolio of leading stocks – a difficult task when market leadership is still unclear.
So create those watchlists. Use the wide net to keep abreast of different areas of the market, but keep a close eye on a select group of stocks that are at or close to buying points.
Read The Big Picture every day to stay up to date on market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson to update the stock market and much more.
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