Dow Jones Futures Surge: Is It Time to Buy?
After having a rough week, the new stock market rise took a big step forward on Friday. The big indexes turned around and went up, and many stocks sent out buy signals.
Some of the stocks that hit buy points were Nvidia stock, Meta Platforms (META), Arista Networks (ANET), Qualys (QLYS), Eli Lilly (LLY), CME Group (CME), Vertiv Holdings (VRT), CrowdStrike Holdings (CRWD), Cadence Design Systems (CDNS), and Palo Alto Networks (PANW). All of their relative strength numbers are at or near their all-time highs, which means they have done well compared to the S&P 500.
Along with those 10 stocks, Tesla (TSLA) rose from a key support level on Friday and throughout the week, even though there was a lot of bad news.
Investors should make their watchlists ready for the weekend and plan to slowly add to their positions if the market keeps doing well.
In terms of stocks, the IBD Leaderboard has Nvidia (NVDA), LLY stock, Arista Networks, Vertiv, and Meta Platforms. Tesla stock is on the Leaderboard screen. This site has PANW stock and Meta Platforms. The CDNS stock is on the IBD Long-Term Leaders list. The IBD 50 list includes Tesla, Eli Lilly, Nvidia, Qualys, Arista Networks, Cadence Design, Palo Alto Networks, Meta Stock, and Qualys. The IBD Big Cap 20 list has stocks from Nvidia, Tesla, Palo Alto, and ANET.
IBD Stock of the Day on Friday was Eli Lilly. During the week, CrowdStrike, Arista Networks, and PANW stock were also chosen.
On Sunday at 6 p.m. ET, Dow Jones futures, S&P 500 futures, and Nasdaq 100 futures all start trading.
Keep in mind that overnight trading in Dow futures and other places doesn’t always lead to trading in the next normal stock market session.
Rally on Wall Street
The stock market had a rough week. The Dow Jones and S&P 500 both fell below their recent lows, stopping their attempts to rise. But the Nasdaq rising attempt kept going. On Friday, the major indexes reversed their downward trend and went up, with top stocks going up quickly.
Last week, the stock market saw the Dow Jones Industrial Average go down 0.3%. The Dow fell below its lows again on Friday morning, but it then rose and gained 0.9%. It went up 0.5%, coming back from the 40-week line on Friday. On Friday and all week, the Nasdaq composite went up 1.6%, which put it above the 21-day line. Tuesday was the lowest point for the small-cap Russell 2000 in five months. It fell 2.1% Wednesday.
The market as a whole was up on Friday, but the overall trend has been very weak for weeks or months.
The 10-year Treasury yield went up by 21 basis points to 4.78%, but it was still a long way below its early Friday high of 4.89%. The yield on a 10-year bond did go up by a few basis points on Friday, but the dollar fell for the third day in a row.
Next week, U.S. crude oil prices fell 8.8% to $82.79 a barrel. Last week, gasoline prices fell 8.6%, and over 19% in the last three weeks. This week, they hit their lowest point since 2023.
ETFs Performance:
The Innovator IBD 50 ETF (FFTY), which is a growth ETF, went up 0.5% last week. The iShares Expanded Tech-Software Sector ETF (IGV) went up 2.2% and took back the 50-day line. Cybersecurity is a big deal; Qualys and Palo Alto are both IGV members. There was a 2.3% gain in the VanEck Vectors Semiconductor ETF (SMH), with Nvidia stock being the top holding. There is CDNS stock in SMH and IGV.
ARK Innovation ETF (ARKK) and ARK Genomics ETF (ARKG) both dropped 1.2% and 5.7% last week, which is a sign of more risky story stocks. Ark Invest’s ETFs still have the most Tesla stock of any holding.
It lost 3.2% last week in the SPDR S&P Metals & Mining ETF (XME). The PAVE Global X U.S. Infrastructure Development ETF got a little less valuable by 0.4%. 1.5% fell in the U.S. Global Jets ETF (JETS). It lost 2.1% in value in the SPDR S&P Homebuilders ETF (XHB). The Energy Select SPDR ETF (XLE) lost 5.2% of its value, while the Health Care Select Sector SPDR Fund (XLV) went up 1%, with LLY stock being one of the most famous stocks in that fund. It lost 0.6% in value for the Industrial Select Sector SPDR Fund (XLI).
The CME stock in the Financial Select SPDR ETF (XLF) went down 0.4%.
Securities In Buy Zones
Friday, Nvidia stock rose 2.4% to 457.62, and for the week, it rose 5.2%. It broke through the 50-day line, which meant that investors could get in early. NVDA stock has a new floor with a 502.66 buy point as of Friday night. Shares did go down a little on Friday night after The Information said Microsoft (MSFT) will release an AI chip next month to make it less reliant on Nvidia GPUs.
Meta stock went up 3.5% on Friday, to 315.43. It went above both a 310.64 cup-with-handle buy point and a starting point at 312.87.
Arista stock went up 3.2% on Friday and 45.5% for the week, reaching 194.02. Shares passed an early opening price of 189.90. The floor for ANET stock is now flat, and the price to buy it is 198.70.
On Friday, Eli Lilly stock jumped 4.4% to 565.22 and went above the 21-day moving average. It did this by going above its 50-day line. That opened up a new chance to buy. On Tuesday, LLY stock went below its 50-day line. On Thursday, it rose above that line again. A positive outside week was put on by Eli Lilly.
The price of Qualys stock rose 4% on Friday, hitting 160.97. It went over short-term support around 155 and a recent 52-week high of 157.88. That spot from not long ago could be seen as a flat base or a handle to a base that goes back to September 2022.
A lot of people bought CrowdStrike stock on Friday, and it shot up 6.9% to 176.69. It broke through the 21-day line and ended a few months of messy consolidation. CRWD stock did close 11.4% above its 50-day line, though.
Palo Alto stock jumped 4.2% to 246.69 on Friday. It came from being close to the 50-day line and broke through some very short-term marks. The price at which you can buy PANW stock is 258.88. Investors could get in early again at 254.23, or a trendline that’s around 250.
In a big week that covered the last two months of trade, CME stock shot up 4.85% to 211.93. Shares went up after hitting the 50-day line on Thursday. MarketSmith research shows that shares went above the 209.31 flat-base buy point on Friday.
This week, Vertiv stock went up 6.9% to 39.77, with a 4.2% gain on Friday. The price of shares went up from the 21-day and 10-week lines and also broke through short-term levels, which allowed investors to get in early. One of the best stocks to buy in 2023 is VRT. It now has a flat base and a 40.41 buy point.
On Friday, Cadence Design stock rose 3.9% to 243.95, breaking out of a decline and rising from the 50-day line. This gave investors an early chance to get in. CDNS stock is moving toward a buy point of $247.50 for a cup with a handle.
Tesla Performance
This week, Tesla stock went up 4.1% to 260.53. Shares went up 5.9% on Wednesday, going above the 50-day line and giving investors a chance to get in early. On Friday morning, shares went down to the 50-day line again, but they came back up for a small gain. If prices rise above Thursday’s trading high of 263.20, it might be a good time to get in again before the market closes down. The base of Tesla stock is a 278.98 cup with a handle.
Even though there was a lot of news that seemed bad, Tesla showed amazing strength. Early Monday morning, Tesla said that fewer cars were delivered than expected in the third quarter. Monday night, Tesla released a new Model Y that costs $3,750 less than the previous base model. Late Thursday night, Tesla lowered the prices of the Model 3 and Model Y in the US. In Norway, the Model Y also got a price cut.
Bulls are excited about the new Model 3 that will soon be delivered in China and Europe, as well as the planned Cybertruck and longer-term bets on self-driving cars, AI, and robots.
What Should I Do Now?
As the week came to a close, the stock market attempted a rally. The major indexes staged an upside reversal on Friday, and many top stocks sent out buy signals.
On Friday, investors could have and maybe should have added to their risk. If the market keeps doing well, you should keep moving your money out of cash, but do it slowly.
Don’t forget that stocks went up again on Friday after Treasury yields fell from their high point, but market rates are still going up. If the 10-year Treasury bond yield gets close to 5%, it’s easy to see the big indexes falling again.
Be ready to take a step back if the market or your investments start to lose strength.
But we need to get ready this weekend. Make sure that your watchlists are always up to date. Pay extra attention to stocks that can be bought or almost can be bought.
Traders will get the CPI and PPI inflation numbers next week. The earnings season will begin, and JPMorgan Chase (JPM), UnitedHealth (UNH), and Delta Air Lines (DAL) will be among the big names.
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