Dow futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. The stock market correction worsened, although the small to modest weekly losses indicated choppy selling late in the week as Treasury yields soared. The Nasdaq broke off a bullish attempt and reached its worst level since 2020.
Eli Lilly (LLY), Albemarle (ALB), dollar tree (DLTR), ZIM Integrated Shipping (ZIM) and the new public offering Excellent energy (EE) are five stocks worth watching, either in buy zones, near buying points or simply showcasing relative strength.
Relative strength is important, but in a market correction, the relative winners can be “absolute losers”. apple (AAPL) is a great example. Its relative strength line is at record levels, but AAPL stock has fallen for six straight weeks.
LLY and ZIM are stocked in IBD 50.
The video included in the article discussed the volatile market week in depth, and also analyzed DLTR, Excelerate Energy and Apple stocks.
Dow jones futures contracts today
Dow Jones index futures open at 6 p.m. ET on Sunday, along with S&P 500 and Nasdaq 100 futures contracts.
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 started with strong gains that ended abruptly on Thursday, with the Nasdaq down 5% on that day.
The Dow Jones Industrial Average fell 0.2% in last week’s trading on the stock exchange. The S&P 500 was down 0.2%. The Nasdaq Composite Index lost 1.5%. Small cap Russell 2000 fell 1.3%.
The 10-year Treasury yield rose 24 basis points to 3.12%, and nearly all of those gains came in a belated reaction to the Federal Reserve’s meeting on Wednesday. The 10-year yield is racing toward an 11-year high of 3.25% from October 2018.
US crude oil futures jumped 4.9% to $109.77 a barrel last week.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) sank 2.4% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) surged 3.3%. The ETF (IGV) in the iShares Expanded Tech-Software Sector (IGV) fell 4.9% as investors criticized the software. The VanEck Vectors Semiconductor Index (SMH) was up 1.2%.
The SPDR S&P Metals & Mining ETF (XME) slipped 3.65% last week as steelmakers followed miners to break a major support. US Infrastructure Development Corporation Global X (PAVE) slid 1.4%. The US Global Gates Index (JETS) fell 4.9%. The SPDR S&P Homebuilders ETF (XHB) is up 0.1%. The Energy Select SPDR ETF (XLE) is up 10.3%. The Financial Select SPDR ETF (XLF) is up 0.6%. The SPDR Healthcare Sector Selection Fund (XLV) was down 0.4%.
Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) sank 3.25% last week and the ARK Genomics ETF (ARKG) sank 3.8%, to its lowest in 25 months. Notably, ARKK has seen record inflows as recently as Tuesday, despite the ETF’s massive downturn since early 2021.
Top 5 Chinese stocks to watch right now
Eli Lily Stock
Eli Lilly’s stock continued to trade around the 21-day line last week, and found support at the 10-week line. Shares rose 1.6% to 296.90 last week. LLY stock is in a range of 284 buy points from the base of the cup. Stocks also broke out a short trendline, using Wednesday’s high at 296.28 as a trigger. Or you can wait to see if LLY stock forms a new base, providing a buying point in better market conditions.
The RS line continues to hit new highs even as LLY stock bounced off its early April peaks.
ALB stock rose 26% to 242.41 last week, buoyed by strong earnings and guidance from Levent (LTHM) and then Albemarle itself. The lithium giant jumped above the 50-day and 200-day lines and broke the trend line. An earlier entry into a better market could have been offered. Currently, ALB stock is on a deep cup base at 291.58 buy points. But perhaps Albemarle could form a handle, around the key resistance at 248.
dollar tree stock
Dollar Tree stock fell back to the 50 day/10 week lines for the first time since the early March break. DLTR stock attempted a bounce on Friday, despite the light volume. A slightly stronger movement, ideally at a larger size, would provide an early entry. Dollar Tree stock appears to be the leader among discount retailers at the moment.
DLTR stock RS line is at the highest levels.
ZIM stock jumped 19% to 66.16 last week, rising to reclaim the 50-day streak. This is after hitting a low of 48.21 in the previous week, to test the 40-week streak. The high earning charging game now has a cup base with 79.05 purchase points. Ideally, ZIM stock could move a bit higher, from forming a handle heading into earnings on May 18th.
ZIM is an ocean-going container ship game, but it recently chartered three LNG ships as well.
Excelerate Energy is a rare initial public offering in 2022. The stock, at $24 a share in the first half of April, fell from a record high of 29.10 on April 18 to a low of 22.65 on April 22. Buying points according to MarketSmith analysis. Stocks attempted to breach the downward sloping trend line on Friday before paring gains to close at 26.90. A move above Friday’s high at 27.38 would provide an early entry.
The RS line, the blue line in the provided charts, has already reached a new high.
Excelerate Energy operates floating LNG terminals. It is already profitable, with profits expected to rise 726% in 2022 as foreign demand for LNG booms.
Finally, Apple stock It sold out hard on Thursday after briefly flashing an early entry on Wednesday. Stocks extended their weekly losing streak, although the 0.2% drop to 157.28 wasn’t much. AAPL stock RS line is at a record high on the weekly chart. This is a reflection of how weak the S&P 500 has been since the end of March. But it’s also a reminder of how relative winners are absolute losers in a market correction.
However, Apple stock is worth watching as one of the only tech or growth names that show any kind of resilience. If it can hold its own in the Nasdaq bear market, it could be a pioneer in the next ongoing uptrend.
Market Rise Analysis
The stock market has seen a turbulent rollercoaster ride over the past week. After starting a rally on Monday and climbing on Wednesday, the major indexes pulled back on Thursday, then lost more ground on Friday during the day.
The Nasdaq fell to its lowest level since 2020, leading to its attempt to rise on Thursday and briefly lower below 12,000 on Friday. The Russell 2000 Index also fell to its late 2020 levels on Friday.
The S&P 500 almost got close to its Monday lows on Friday.
The market’s attempt to rally remains in the S&P 500 and Dow Jones. So they can organize a follow-up day at any time.
Arguably the stock market could use another big shake-up to spur a sell-off. Fear metrics are approaching recent highs, but not past the 2022 highs. Continued flows into ARKK and other growth funds also suggest that “buy the dip” is still in place.
New lows continue to dominate new highs, especially in the Nasdaq. Market breadth is bleak. This was a problem last year. But in 2022, shares of Apple and other big companies no longer hide this fundamental weakness.
Plays on commodities are still a bright spot, especially oil and gas names. Asma Fertilizer is trying to keep its moving averages for 50 days. Lithium plays are back in focus, while wood products and building materials look intriguing. Meanwhile, health insurers still look strong and so do some drug companies like LLY stock, but leadership in the medical field has narrowed.
Meanwhile, steelmakers are breaking out of the support, looking to join the miners of gold and base metals. Heavy builders have also fallen in recent weeks. While oil and gas operations are robust, uranium and solar stocks have fallen sharply in the past few weeks.
Time to Market with IBD’s ETF Market Strategy
What are you doing now
Investors should be in cash or thereabouts. Exceptions may be small exposures to leading sectors or long-term holdings with large gains.
As Thursday’s stunning sell-off showed, the market can sell much faster and deeper than the rally. So if you have exposure, be quick to take partial profits and be prepared to cut losses quickly.
Don’t try to guess the bottom of the market. You’ll be right in the end, but how many potential bottoms have in the past several months?
For now, keep your powder dry and your mind fresh—and work on your watch lists.
Read the big picture every day to stay in sync with market trend, stocks and leading sectors.
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