Dow Jones futures fell early Friday, along with S&P 500 futures and Nasdaq futures, as Intuitive Surgical and Snap impacted several Internet giants. The stock market rebounded, with Tesla (TSLA) and lower Treasury yields pushed the Nasdaq Index higher.
There is growing optimism that the market bottomed out in mid-June. The Nasdaq may be ready to pull back, especially with several gains coming in next week.
In the Thursday session, Tesla stock jumped on earnings, up. Stocks have cleared a heavy buying zone, but now look to be extended while still far from the highs.
Delayed main earnings
Explode, Explode (SNAP) and intuitive surgical (ISRG) fell late Thursday on the back of disappointing results.
SNAP stock collapsed 27% in after-hours trading, not far from its mid-June low. Shares closed 5.6 percent higher at 16.38 points. Snap posted a second-quarter loss that was slightly worse than expected, while revenue fell. Snapchat’s parent will also not provide Q3 guidance. While announcing a $500 million buyback program, Snap will slow hiring and reduce operating expenses. All this is a bad sign for social media companies and companies that rely on online advertising. Facebook Parent meta pads (META) lost nearly 5% and Abha Google the alphabet (GOOGL) is down 3% ahead of its earnings next week. trade office (TTD) is down 7%.
Twitter earnings are due Friday morning. TWTR stock fell just 2% late Thursday, as Elon Musk’s disputed takeover deal provided some support.
Intuitive Surgical profits fell for the second quarter, while revenue growth slowed for the fourth consecutive quarter, to just 4%. Both missed views as the robotic surgery giant blamed Covid’s ongoing impact on elective procedures. ISRG stock is down 13%, poised to fall below the 50-day line. Intuitive Surgical earnings and feedback could be a bad sign for other medical devices, products, and systems.
Stocks near the points of purchase
Ulta Beauty (ULTA), Initial deal executor (OLLI), fortinet (FTNT), Neurobiological Sciences (NBIX) and Quanta Services (PWR) is the stock that is prepared.
Ollie’s Bargain Outlet and PWR stock are on the IBD Leaderboard watch list. OLLI stock is on SwingTrader. FTNT stock is listed as a long-term IBD leader. ULTA stock is IBD 50 listed. Neurocrine Biosciences was Thursday’s stock IBD.
The video included in the article discussed the market rally on Thursday and analyzed the Tesla stock, Carlisle (CSL) and elf beauty (dwarf).
Dow jones futures contracts today
Dow futures are down 0.1% against stocks. fair value. S&P 500 futures sank 0.4%. Nasdaq 100 futures were down 0.8%. ISRG stock is on the Nasdaq 100, along with Meta Platforms and Google stock.
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 continued to rally, with Tesla and Nasdaq leading the way.
The Dow Jones Industrial Average rose 0.5% in stock market trading on Thursday. The S&P 500 rose 1%, with TSLA stock being the biggest gainer. The Nasdaq Composite Index is up 1.4%. Small cap Russell 2000 rose 0.5%.
US crude oil prices fell 4.1 percent to $95.80 a barrel. Gasoline futures are down 4.9%, indicating that retail prices at the pump will continue to fall for at least the next two weeks.
The 10-year Treasury yield fell 13 basis points to 2.91%. The two-year Treasury yield fell 16 basis points to 3.09%. Jobless claims rose to an eight-month high while the Philadelphia Fed Manufacturing Index for July showed activity declining at a faster pace. Both raise recession fears but also reinforce expectations that the Federal Reserve will raise interest rates by 75 basis points next Wednesday, not a full point.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.4%, while the Innovator IBD Breakout Opportunities ETF (BOUT) also rose 0.4%. The iShares Expanded Tech-Software Sector (IGV) ETF (IGV) is up 1.8%. The VanEck Vectors Semiconductor Index (SMH) was up 1.7%.
Reflecting on speculative story stocks, the ARK Innovation ETF (ARKK) is up 1.75% and the ARK Genomics ETF (ARKG) is up 1.8%, adding to significant gains this week. Tesla shares are principal ownership via Ark Invest’s ETFs.
The SPDR S&P Metals & Mining ETF (XME) is up 0.1% and the US X Global Infrastructure Development Fund (PAVE) is up 1.5%. The US Global Jets ETF (JETS) fell 2.7%, with United Airlines (UAL) and American Airlines (AAL) reached in the second quarter results. SPDR S&P Homebuilders ETF (XHB) stood out with 2.1%. The Energy Select SPDR ETF (XLE) is down 1.75% and the Financial Select SPDR ETF (XLF) is down 0.6%. SPDR Fund (XLV) for the healthcare sector rebounded 1.6%.
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Tesla’s earnings comfortably beat second-quarter viewers late Tuesday, with CEO Elon Musk saying Cybertruck is on track to mid-2023. TSLA stock rose 9.8% to 815.12, removing resistance going back to early June And it broke above the trend line that started in early April. The daring investor could have bought Tesla shares near the open, but even then it has been extended from the 50-day streak. By Thursday’s close, shares were 14% more than 50 days later. Meanwhile, the electric vehicle giant is still well below the 200-day streak, and well off its official buying point at 1,208.10. At this point, investors may want to see TSLA stock decisively break the 200-day line and then form a handle, allowing the major averages to catch up.
After the shutdown, Bloomberg reported that Tesla is expected to oust Omid Afshar, Musk’s senior lieutenant who runs the Texas plant. Tesla’s internal auditors are said to be investigating Afshar over the purchase of suspicious building materials, including a special type of glass. Several Tesla employees have already been fired in the investigation.
TSLA stock fell overnight.
stock to watch
Ulta Beauty stock rose 0.7% to 411.27 Thursday. The stock has 429.58 buying points from a flat base along with a string of failed mergers going back to last August. But investors can use Wednesday’s high of 412.50 as a short-term entry. ULTA stock is 5.2% above its 50-day streak, which isn’t extended much. Ulta is one of the few beauty companies to be shaped, despite the not-so-photo-perfect charts.
Ole stock fell 1.2% to 66.50 on Thursday, but rebounded somewhat from its 21-day moving streak. This provides a strong entry or follow-up buying opportunity for the closed retailer, which broke out last month from a bottoming bottom.
FTNT stock rose 3.7% to 61.86, heading toward the 200-day line. This is an area where Fortinet stock has hit resistance over the past few months. A decisive move above the 200-day mark, and perhaps surpassing the July 12 high at 63.56, should provide an early entry or a place to start a position on the list of long-term IBD leaders. The official FTNT stock purchase point is 74.45 from the consolidation going back to the end of last year, but the shares have been range-bound for about a year.
PWR stock rose 0.6% to 133.07, working on 138.56 buying points from a confusing base with a handle, according to MarketSmith analysis. Quanta Services is just below early entry at 133.68 inside this deep handle. PWR stock is above the 50-day line by 8.3%, so a longer pause may be constructive.
NBIX stock rose 0.1% to 97.60. Neurocrine Biosciences has 100.10 cup handles at a point of purchase. The stock can be said to be actionable by breaking a short trend line inside this handle. NBIX stock is currently up 5.3% over 50 days.
Time to Market with IBD’s ETF Market Strategy
Market Rise Analysis
The stock market rally continued its recent strong run. Once again, the Nasdaq took the lead, although the Russell 2000 was somewhat behind on Thursday.
The Nasdaq is back above the 12,000 level, with its early June highs not far off. There is room for the S&P 500 and Russell 2000, modestly above their late-June highs, before climbing to early-June peaks. The Dow is still trading near its highs in late June, but has bounced back from testing the 50-day line on the day.
The Nasdaq has risen significantly over the past week, and is approaching the upper end of the regression line. This may indicate a pause or a regression soon.
This is something to keep in mind as the market faces an avalanche of profits. In addition to META parent shares of Facebook and Google stock, apple (AAPL), Microsoft (MSFT), Amazon.com (AMZN), ExxonMobil (XOM) and chevron (CVX) is due next week, along with hundreds more. They will share center stage with the Federal Reserve meeting.
While Tesla stock soared on earnings, Snap and Intuitive Surgical are just a taste of what investors might see in the coming days.
There are still plenty of great stocks to buy. While the gains have been broad-based, a lot of the big gainers recently have been hit hard by growth stocks like datadog (DDOG), nvidia (NVDA) and Tesla Stock. Some of the leading areas, such as health insurers and discounts, fell this week, with sharp intraday declines in some cases.
ETFs that track the Nasdaq, software, biotech, and chip sectors are ways to play the bullish right now.
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What are you doing now
Investors who built positions in the past week may be grateful to do so. A market rally sure looks like a tradable rally, at least. With the Nasdaq rising so quickly and seeming to be stretched with some action, a pullback of some sort wouldn’t be surprising. The big news that is being released means that the market and individual stocks can experience significant volatility.
So do not rush to add exposure. Continue adding to your holdings carefully if the market and your positions continue to function, but don’t be afraid to continue to make some partial profits quickly.
Look for early buying opportunities and stocks that do not extend far from the moving averages. In 2022, stocks that rise to or exceed traditional buying points often struggle. Even names that keep going can have big shakes during the day.
Work on your watchlists, focusing on strong relative strength. Focus on stocks in or near buyable areas.
Read the big picture every day to stay in sync with market trend, stocks and leading sectors.
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