Dow Jones futures fell slightly on Thursday morning, along with the S&P 500 and Nasdaq futures, as crude oil prices continued to rise. Attendance at a stock market rally showed strong gains on Wednesday. Fed chief Jerome Powell has promised to be “agile” in raising interest rates, while helping with a possible new round of peace talks between Russia and Ukraine.
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Shares of SNOW collapsed overnight. A highly regarded, unprofitable cloud storage company snowflake (SNOW) surpassed views, but revenue growth slowed while its fiscal 2023 guidelines were not good enough to satisfy investors. On February 10-11, Snowflake shares tried to move above its 50-day line, but were rejected. SNOW shares can now test their lowest level since May 2021 after the IPO.
Micron Technology (MU) and Rambus (RMBS) flashes early purchase signals in the session on Wednesday while Axcelis Technologies (ACLS) is on the verge of doing so. Other games with chips close to action include Alpha and Omega semiconductor (AOSL) and Broadcom (AVGO), which reports earnings late Thursday.
Meanwhile, Apple shares have risen steadily, moving towards its 50-day line and various buying points. Apple (AAPL) on Wednesday announced a product event on March 8, with a cheaper 5G iPhone among the expected offerings.
The head of the Fed Powell told Congress that he still supports raising interest rates in March, but promised to be “agile” amid the “highly uncertain” economic consequences of the crisis in Ukraine. Powell also said he supported a quarter-point move at the Fed’s meeting on March 15-16, which looks set to take a half-point increase from the table.
Russia and Ukraine have signaled that they are open to new peace talks, but neither side appears ready to settle. Russia continues to expand its invasion of Ukraine as indiscriminate bombings increase civilian deaths in major cities. Fuel, food and other logistics remain a major problem for Russia’s invading forces, according to US defense officials. Russian troops and equipment appear to have suffered significant losses, largely due to logistical shortcomings.
MU shares are on IBD Leaderboard. Shares of Alpha & Omega and ACLS are on the IBD 50 list. Shares of Micron and AOSL were selected by IBD Stock Of The Day this week.
The video embedded in this article discusses today’s strong gains in market prices, while analyzing Oneok (OK), Mosaic (MOS) and Micron stocks.
Dow Jones futures today
Dow Jones futures fell 0.15% to fair value. S&P 500 futures fell 0.2%. Nasdaq 100 futures fell 0.4%. While SNOW shares are listed on the NYSE, its collapse overnight caused losses in a number of other highly valued software stocks, including Bill.com (BIL) and Datadog (DDOG).
US crude futures rose 2% to more than $ 113 a barrel.
Remember that the action at night in Dow futures and elsewhere does not necessarily turn into actual trading in the next regular session of the stock market.
Join the IBD experts as they analyze the actions that can be taken in the stock market rally on IBD Live
Stock market rally
The stock market rally started again with modest movements, but turned, this time up. The head of the Fed Powell, emphasizing the flexibility and modest political movements against the background of hot inflation and insecurity in the war in Ukraine, helped maintain the action.
The Dow Jones industrial average rose 1.8 percent on the stock market on Wednesday. The S&P 500 jumped 1.9%. The Nasdaq index rose 1.6%. Russell 2000 with a small capitalization jumped 2.4%.
Crude oil prices rose nearly 7% to $ 110.60 a barrel, reaching $ 112.51 during the day. This is the highest level since 2011.
Russia has trouble finding buyers or shippers for its crude oil and other goods, even at big discounts, raising concerns about global supplies. OPEC + has agreed to continue to slowly reduce production cuts since the pandemic era.
Yields on 10-year government bonds rose 18 basis points to 1.865% after falling 12 basis points on Tuesday.
ETFs
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 2.7%, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 3%. The ETF of the iShares Expanded Tech-Software Sector ETF (IGV) rose 1.5%. VanEck Vectors Semiconductor ETF (SMH) jumped 3.3%. The shares of Micron and AVGO are remarkable assets of SMH.
The SPDR S&P Metals & Mining ETF (XME) continued to rise, adding 3.8%. The Global X US Infrastructure Development ETF (PAVE) rose 3.3%. The US Global Jets ETF (JETS) rose 1.7%. SPDR S&P Homebuilders ETF (XHB) rose 2.9%. The Energy Select SPDR ETF (XLE) advanced 2.3% and the Financial Select SPDR ETF (XLF) 2.6%. The Health Care Fund for a selected sector SPDR (XLV) rose 1.5%.
Reflecting the more speculative stock history, the ARK Innovation ETF (ARKK) fell 1.1% and the ARK Genomics ETF (ARKG) fell 1.45%.
Five best Chinese stocks to watch now
Stocks of chips in, near shopping areas
Shares of Micron rose 8.2% to 93.30 on Wednesday, returning above its 50-day line in above-average volume. MU shares have an official buying point of 96.60 cups with a handle. But investors could use drilling a short trend line within the handle as an early entry. The model of a cup with a handle was formed until the much longer consolidation of a cup with a handle, which had a short breakthrough in December.
Shares of Rambus jumped 5% to 28.01 at a moderately higher volume. The chip technology company ended just below the point of buying a cup with a handle of 28.32, according to MarketSmith. But investors were able to buy RMBS shares as they withdrew from the 50-day line and broke the trend line, starting at a peak on December 28 at 28.89. The line of relative strength is already high, while Rambus shares are still based. This is a bull sign and is marked with a blue dot at the end of the RS line.
Shares of ACLS jumped 7.3% to 71.59, also moving away from the 50-day line. Investors could use 71.79, just above Monday’s highest level, as an early entry. The official buying point is 75.10 of the free handle at the base of the cup. The RS line for ACLS shares is already at a new peak. Axcelis manufactures specialized equipment for chips such as ion implant systems and high energy implants
Shares of AOSL rose 4.6% to 53.39, leaving its 50-day line. The shares of the manufacturer of power management chips have an input of 59.48. But investors could use a move above Tuesday’s high of 55.73 + 10 cents as an early entry.
Shares of AVGO rose 2.75% to 585.78. The shares of the wireless chip maker and the software maker must exceed the 50-day line, with 614.74 possible early entry. The official point of purchase for AVGO shares is 677.86. Broadcom’s winnings are paid out on Thursday night.
All of these chip names have a relatively modest price-to-earnings ratio, a positive element in the current pace of growth. RMBS shares have the highest PE ratio of 43, but this is not extreme for growth stocks, especially those expected to double in earnings in 2022.
In addition to these names, a number of other chip games are not far from interesting, including Qualcomm (QCOM) and Marvell Technology (MRVL).
Apple Stock
Shares of Apple rose 2.1% to 166.56, but stopped on its 21-day line. Investors can view AAPL shares as a double-bottom base with 176.75 points to buy. Investors can use the top-tier trend line in early January to find a slightly early entry, just above the 50-day line. RS’s stock line is just below record highs.
Market rally analysis
Attempts to rally in the stock market were strong on Wednesday, with big gains in Dow Jones, S&P 500 and Nasdaq prices.
However, the volume fell compared to Tuesday on both the NYSE and Nasdaq. This means that none of the indexes had the next day to confirm the new rally.
This may be for the best. All major indices are still below their 21-day moving averages, which have acted as a resistance level for most of 2022. A decisive clearing of this level would seem like the absolute minimum for investor confidence. Beyond the 21-day line, the main indices still have their February peaks, as well as their 50-day and 200-day lines as key levels, not necessarily in that order.
Russell 2000 is back above its 21-day line, but the February peaks and the 50-day camp.
The market remains extremely news-oriented. The market direction can be quickly shifted up or down based on the last title.
One positive thing: moods become bears. Only 29.9% of investment bulletins are bullish, which is below the lowest level of the pandemic collapse. Meanwhile, 34.5% are bears. When bears outnumber bulls, this is a strong sign that at least a short-term bottom is emerging, though not necessarily immediately.
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What should we do now
Attempts to rally in the stock market recovered strongly from Tuesday’s sell-off, albeit at a lower volume.
Investors could slightly increase their exposure, perhaps diverging from the energy / commodity sectors, which performed well in 2022. Unlike late January and early February, a decent number of stocks are adjusting or flashing signals for purchase.
While this article highlights shares of Micron and other chips, health insurers, cybersecurity, construction products and shipping companies are also taking shape, along with some other games in energy, mining and metals.
But until the main indexes regain their 21-day line and the market rally has the next day, you need to keep your exposure modest. The risks of downsides remain high.
This is an important time to work on your watch lists. Throw a wide network of warehouses at bases with strong RS lines. Then focus on a selected list of names that are applicable or almost so you can see as potential big winners.
Read the Big Picture every day to stay in line with market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and others.
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