Dow Jones futures rose overnight, along with S & P 500 futures and NASDAQ futures. The stock market rebound retreated on Wednesday, closing at session lows. Crude oil prices soared and Treasury yields fell from their 34-month highs.
X
With Apple stock Tesla (TSLA) has extended their winning streak to seven sessions, both below the daytime highs. Apple (AAPL) is within range of the trendline entry and not far from the official purchase point. Tesla stock is far from its buying point. Both can be paused, especially with Tesla to make the chart pattern more attractive.
in the meantime, JB Hunt Transport Service (JBHT) and Costco Wholesale (COST) has withdrawn in the purchase zone, CVS health (CVS) and Builder FirstSource (BLDR) is working on possible handles.
The shares of Tesla and JBHT are on the IBD leaderboard, and the shares of COST are on the leaderboard watchlist. Shares of JB Hunt, Costco and CVS are in SwingTrader. TSLA, JB Hunt, and BLDR are in stock at IBD50.
Dow Jones Futures Today
Dow Jones futures have risen higher against fair value. S & P 500 futures rose 0.1%. Nasdaq 100 futures rose 0.1%.
Crude oil prices have risen 1%.
Keep in mind that nighttime action on Dow futures and elsewhere does not necessarily lead to actual trading at the next regular stock market session.
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Stock market rally
The stock market backlash has suffered the biggest losses since March 14. The Dow Jones Industrial Average fell 1.3% on Wednesday’s stock market trading. The S & P 500 Index fell 1.2%. The Nasdaq Composite Index fell 1.3%. The small Russell 2000 fell 1.8%.
US crude oil prices rose 5.2% to $ 114.93 a barrel.
The Treasury yield for 10 years fell 5 basis points to 2.32% after reaching its highest level since May 2019.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) fell 1.3%, while the Innovator IBD Breakout Opportunity ETF (BOUT) was slightly above the break-even point. Both iShares Expanded Tech-Software Sector ETFs (IGVs) and VanEck Vectors Semiconductor ETFs (SMHs) fell 2.5%.
SPDR S & P Metals & Mining ETFs (XMEs) rose 1.8%, while Global X US Infrastructure Development ETFs (PAVEs) fell 0.9%. US Global Jets ETFs (JETS) were down 1.4%. SPDR S & P Homebuilders ETFs (XHBs) fell 3.9%. Energy Select SPDR ETFs (XLEs) rose 1.7% and Financial Select SPDR ETFs (XLFs) abandoned 1.85%. The Healthcare Select Sector SPDR Fund (XLV) lost 1.8%.
Reflecting a more speculative storystock, ARK Innovation ETFs (ARKK) fell 1.9% and ARK Genomics ETFs (ARKG) fell 2.4%. Tesla shares continue to hold the number one stake in Ark Invest’s entire ETF.
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Apple stock
Apple stocks rose 0.8% on Wednesday to 170.21, below the daytime high of 172.64. After closing on Tuesday’s trendline, stocks are now above their early entry, still close to the 50-day line. According to MarketSmith’s analysis, it’s not far from the 176.75 double-bottom-based buypoint.
The blue line in the chart provided, the line of relative strength, has returned close to record highs, reflecting Apple’s strong performance against the S & P 500 Index.
Investors can buy AAPL shares here. However, after starting seven consecutive sessions, the iPhone giant was able to take a break. Ideally, Apple’s stock price will pause here for at least a few days and then rise. Of course, you don’t have to take a break right away.
JPMorgan analyst Samik Chatterjee said iPhone sales are “strong” and Apple is preparing for a “monster growth cycle” over the next 18 months.
Tesla stock
Tesla shares rose to 1,040.70 on Wednesday morning. Stocks were pulled back, temporarily turning negative and then showing a 0.5% rise at 999.11. After running six sessions, including a 7.9% surge on Tuesday, the EV giant is now well extended from the 50-day and 200-day lines. However, TSLA stocks are still well below the cup-based buypoint of 1,208.10, with trendline entries of around 1,150.
Ideally, the Tesla stock will pause around the current level, forming a handle and a new, lower official buying point.
JBHT stock
JB Hunt shares fell 1.7% to 210.18, down five times in a row, but above the 208.97 flat-based buypoint. JB Hunt recorded a 9.6% surge on March 16 as the trucking company partnered with Warren Buffett’s BNSF Railway. Berkshire Hathaway (BRKB). The glacier pullback to the buy point provides an opportunity to open or add a position either now or after some rebounds in the JBHT stock.
Cost stock
Costco’s share price fell 1% to 554.02, with more points to buy from the cup base with handles than 545.39. The RS line for COST stocks remains at record highs.
BLDR stock
Builders FirstSource’s share price fell 3.7% to 73.49, above the 50-day line. The BLDR stock has 86.58 cup-based purchase points, but may be working on the steering wheel and will have fewer entries.
One of Builders FirstSource’s concerns is that as interest rates rise and new home sales recede, many home-related games, including homebuilders and retailers, are for sale.
CVS stock
CVS stocks fell 1% to 106.20. It’s still close to the 111.35 flat base purchase point. It’s also around the early entry from around the 50-day line and the short-term highs of March 7. Monday’s midday high of 109.69 could also serve as another early entry.
Market rally analysis
Wednesday’s stock market recovery suffered a solid loss, despite Apple masking the weaknesses of the Big Cap Index. The S & P 500 was below the 200-day line. The Dow Jones fell below the 50-day line.
The Nasdaq Composite Index and Russell 2000 remain over 50 days.
Holidays aren’t fun, but a short market rally pause can be beneficial. That way, stocks like Apple and Tesla will probably take a break to form the handle. On the other hand, for stocks that continue to rise, the RS line will rise significantly.
Energy stocks on Wednesday were leaders, reflecting soaring oil prices. Steel, mining and fertilizer play was also strong.
Software and housing stocks were losers. From biotechnology to health insurance companies, medical stocks were a tough session.
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What to do now
Wednesday’s recession was not alarming given the recent strong rise in market recovery. But that’s why investors need to gradually build up their exposure and avoid jumping to the top in the short term or otherwise. That’s also why you never want to buy expansion stocks.
If the Nasdaq and S & P 500 are well below the 50-day moving average and the stock market recovery is struggling significantly, investors will probably need to truncate or withdraw from their recent positions.
Now is the time to be flexible. Don’t get caught up in the idea of being bullish or bearish. Listen to the market and act on it.
Read the big picture every day to keep the market direction in sync with the major stocks and sectors.
Follow Ed Carson on Twitter. @IBD_ECarson The latest information on the stock market.
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