Dow futures: Market rally is bending but not breaking; Big Week for Tesla, EV Rival

Dow futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. The stock market rally dipped last week, but major indexes pared losses by Friday’s close, with the Nasdaq once again facing a major hurdle.




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Dow Jones Component United Health (The United Nations) climbed into buying territory on Friday on strong profits, which prompted other health insurers to exceed buying points, including two cents (CNC) and humana (hmmm). Option care health (OPCH) and Shock Wave Medical (SWAV) also jumped into the buying territory.

It’s a big week for electric car giants Tesla (TSLA) and China BYD (BYDDF). Tesla’s earnings are due Wednesday night, as investors look to see how the automaker weathered the Covid shutdown and other headwinds last quarter. BYD, which reported booming initial earnings in the first half of last week, will begin sales of the Seal Sedan, its Model 3 competition, on Monday. Both Tesla and BYD stocks fell dramatically last week, and they need time to fix it.

Stock chips are not executable anywhere. But they are showing some signs of strength amid a long and painful downtrend. This is a positive sign of a continuous rally in the market.

UN stock is on IBD Leaderboard. UnitedHealth and CNC stock is at IBD 50. HUM stock is in IBD Big Cap 20. Option Care Health was IBD stock for Friday.

Dow jones futures contracts today

Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.

Remember that overnight action in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.


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stock market rise

The stock market rally fell for most of the week, but recovered most of its losses by the end of the week.

The Dow Jones Industrial Average fell 0.2% in stock trading last week. The S&P 500 fell 0.9%. The Nasdaq Composite Index fell 1.7%. Small cap Russell 2000 down 1.4%

The 10-year Treasury yield fell 17 basis points to 2.93%. The 2-year Treasury yield rose 5 basis points to 3.12%. The inverted 2- to 10-year Treasury yield curve is a recession warning, but it is less reversible than midweek. The yield for the year, which exceeded the two-year yield for most days of the week, closed at 3.1%.

US crude oil futures fell 6.9% to $95.78 a barrel last week, even after bouncing slightly from Thursday’s lows.

ETFs

Among the top ETFs, the Innovator IBD 50 ETF (FFTY) sank 0.9% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) sank 0.6. Shares of iShares Expanded Tech-Software Sector ETF (IGV) fell 4.4%, with a Service now (For now) a warning of damage to the sector. The VanEck Vectors Semiconductor ETF (SMH) popped up by about 3%.

The SPDR S&P Metals & Mining ETF (XME) was down 0.1% last week. The US Global X Infrastructure Development Corporation (PAVE) gained 1 cent. The US Global Jets ETF (JETS) rose 1.4%. The SPDR S&P Homebuilders ETF (XHB) is up 0.5%. The Energy Select SPDR ETF (XLE) is down 3% and the Financial Select SPDR ETF (XLF) is down 0.9%. Healthcare sector fund SPDR (XLV) was down 0.4%, rebounding late in the week. UN stock is a major stock in XLV.

Reflecting speculative story stocks, the ARK Innovation ETF (ARKK) fell 5.9% last week and the ARK Genomics ETF (ARKG) fell 2.9%, as programs and high-value growth struggle. Tesla stock is a major property of Ark Invest’s ETFs. Cathie Wood’s Ark also owns some shares of BYD.


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Stocks in buying areas

UnitedHealth’s earnings easily beat second-quarter opinions early Friday. UN stock jumped 5.4% Friday to 529.75, rebounding above the 518.80 buy point of what is either a cup base with a handle or a double bottom base with a handle. For most of the week, UnitedHealth stock fell, to test the 50-day line on Thursday before rebounding for minimal gains. The relative strength line, the blue line in the provided charts, is at a record level, reflecting the strong outperformance of UN stock.

It also raised competitors’ UnitedHealth earnings. Centene stock rose 4.55% to 89.66, back above 87.44 double-bottomed buying points, according to MarketSmith analysis. Humana stock rose 3.2% to 487.54, regaining 475.54 entry points. Centene and HUM shares both reported earnings later this month.

Option Care stock jumped 7.7% Friday to 31.58 in heavy trading. This cleared 31.18 buy points for the cup base. But the better entry was 30.41, just above the incomplete grip. OPCH’s RS line rose to new heights. Option Care Health’s dividend is due on July 27th.

Shockwave stock rose 5.2% to 209.90 on Friday, clearing the incomplete handle that offered an early entry at 208.28. The entry of SWAV stock also coincides with a long trend line from the November high. The RS line has already hit a new high, even with the Shockwave off the highs. However, Friday’s low volume was not ideal.

Tesla profits looming

Tesla earnings are due Wednesday night. The second quarter was marred by a prolonged factory shutdown in Shanghai due to the city’s Covid lockdown, followed by a prolonged full production rebound. Factories in Berlin and Austin have also seen a slow rise. However, analysts expect Tesla’s profit to rise 26% vs. A year ago, though, that would end a five-quarter streak of triple-digit growth. Sales growth should cool to an annual gain of 42%. Both earnings per share and earnings are expected to fall significantly against the earnings per share. Q1.

Investors will be looking forward for guidance for the rest of the year, as well as any hints for future products. CEO Elon Musk said Friday that prices for Tesla cars, which have risen over the past year, could fall if commodity costs fall.

Tesla stock fell 4.3% to 720.20 last week, slipping just below the 50-day line but holding above the 21-day line. It can be said that TSLA stock has formed a bottoming base, but there is not much previous upside from the May lows.

BYD Seal of Approval?

BYD Seal will officially go on sale on July 18. A competing Model 3, which has similar range and dimensions but is $10,000 cheaper, will likely start delivery after a few days.

Reportedly, pre-orders for the seal, which began in late May, are very high.

While both Tesla and BYD can claim the EV crown, this is the first clear case of the automakers going head-to-head. It will not be the last. BYD is expected to release the Sea Lion, a competitor to the Y crossover, later this year.

BYD stock fell 8.6% to 37.74 last week. Stocks plunged on rumors that Warren Buffett Berkshire Hathaway (BRKB) was selling some or all of its large long-term stake in BYD. There has been no confirmation of this yet.

BYD stock actually rebounded off weekly lows of 32.91 after EV and battery giant reported first-half boom earnings that were well above seen. Analysts expect stronger earnings and margins in the second half as production continues to rise and BYD moves to higher-priced, higher-margin vehicles.

With that said, BYD’s stock chart needs some time to fix and form a new base.


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Market Rise Analysis

In the end, the major indicators ended with little to modest losses, but it wasn’t a quiet week.

The stock market’s rally got off to a bad start, with the Nasdaq pulling back on Monday from its 10-week streak, hitting resistance multiple times. Major indices continued to slide, but managed to recover away from their lows on Wednesday and Thursday, despite hot inflation reports raising the odds of the Federal Reserve raising interest rates even further. On Friday, stocks rebounded strongly, with the Nasdaq, Dow Jones and Standard & Poor’s breaking their 21-day lines.

Despite some significant volatility, the Nasdaq has already had an inside week, although other indices briefly trimmed last week’s lows. Once again, the Nasdaq is close to its 50-day, 10-week averages. Will the tech-heavy complex turn again near these levels? A decisive move above the 10 week – which would also likely mean the removal of the highs of late June/early July – would be a positive sign. But there are still many other key resistance levels along the way.

For now, the market rally remains under pressure, range-bound and high volatility. It’s a tough time to invest.

The macroeconomic climate remains challenging. Wednesday’s CPI report was grim, with a fearsome headline figure and details pointing to recent inflationary pressures even as gasoline prices fell. Friday’s economic data was more upbeat. June Retail Sales and the New York Fed Empire State Manufacturing Index were stronger than expected. Crucially, import prices, price metrics in the Empire Factory Survey and inflation expectations all bode well for future inflation.

The medical sector remains the main area of ​​market power. While some names fluctuated midweek, several key levels rebounded on Thursday while rivals UN and others boosted earnings on Friday.

Discount retailers appear to be in good health.

On a larger scale, there are some glimmers of hope and encouraging green shoots.


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Ahoy chips?

Chip stocks rose for the second week in a row, buoyed by strength Taiwan Semiconductor (TSM) Earnings and Guidelines. This is a positive sign, because it is difficult to have a significant rise in the market without chips playing an important role. The semiconductor sector has a significant market value, especially for the Nasdaq, so heft alone matters. In addition, chips are available in just about everything, from computers to phones to cars. So if the chips are doing well, a good chunk of the market is likely to thrive.

However, the SMH ETF is still well below the 50-day line while there are a few individual names above this key level.

Poor earnings and guidance helped push stocks lower early in the week while strong results, including from UnitedHealth, Taiwan Semiconductor and Citigroup, helped spur gains later.


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What are you doing now

Earnings season is up this week, with Tesla, Netflix (NFLX) and Johnson & Johnson (JNJ) is among the notable reports.

Over the past week, investors may have been jolted by the stocks as they fell significantly. In many cases, these names eventually wore out. That’s fine. You follow the rules not to be right every time, but to be right most of the time – and to avoid huge losses. If a stock rocks you and then a new buy signal appears, like UnitedHealth, don’t be afraid to buy it again, even at a higher price.

It’s still a good time to keep the exposure light. The market rally is approaching key resistance again, so a reversal will not be out of character. Until there is clear evidence of an ongoing uptrend, cash should remain your number one number. 1 contract.

But there is some glimmer of hope. Stay engaged and create your own watchlists so you are ready to take advantage of them.

Read the big picture every day to stay in sync with market trend, stocks and leading sectors.

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