The Dow Jones futures were little changed on Tuesday night, along with the S&P 500 and Nasdaq futures, with Apple (AAPL) and Tesla stock approaching main support.
X
SolarEdge Technologies (SEDG), exact Sciences (EXAS), QuantumScape (QS), Crispr Therapeutics (CRSP), Cornerstone OnDemand (CSOD) and RingCentral (RNG) were notable gains after closing.
Shopify (STORE) and lithium miner Albemarle (ALB) are the main results before opening Wednesday.
Rising interest rates and economic prospects fed the financial sector and cyclical names, with the Dow Jones giants JPMorgan Chase (JPM) and Caterpillar (CAT) clearing points of purchase. But rate hikes have weighed on many growth stocks.
Apple and Tesla shares fell to their 10-week moving averages. A recovery from these levels may offer an early entry, although investors may want to expect a little more strength.
IBD stock of the day: Dow Giant explodes in economic outlook
SolarEdge’s shares rose due to strong gains and guidance. Exact Sciences’ actions have had mixed results. QuantumScape’s shares went up and Crispr’s shares fell after development companies reported heavy losses. RingCentral’s shares fell despite strong results and goals. Cornerstone’s stock soared, signaling a fall in its results.
Apple and Tesla shares are on the IBD Leaderboard. CAT stock is at SwingTrader.
Dow Jones Futures Today
Dow Jones futures were just below fair value. The S&P 500 futures fell. Nasdaq 100 futures fell 0.1%.
Remember that overnight action on Dow futures and elsewhere does not necessarily translate into real trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks at the stock market’s high on IBD Live.
Coronavirus News
Coronavirus cases worldwide reached 110.03 million. Deaths from Covid-19 reached 2.42 million.
Coronavirus cases in the US reached 28.38 million, with deaths above 499,000.
Stock market rally on Tuesday
Overview of the US stock market today |
||||
|---|---|---|---|---|
| Index | Symbol | Price | Gain / Loss | % Change |
| Dow Jones | (0DJIA) | 31520.57 | +62.17 | +0.20 |
| S&P 500 | (0S and P5) | 3932.48 | -2.35 | -0.06 |
| Nasdaq | (0NDQC) | 14047.50 | -47.97 | -0.34 |
| Russell 2000 | (IWM) | 225.86 | -1.40 | -0.62 |
| IBD 50 | (FFTY) | 48.95 | -0.24 | -0.49 |
Last updated: 16h08 ET 16/02/2021 |
||||
The stock market recovery started the week shortened by the holiday, with the main indexes reaching record highs, but soon became mixed.
The Dow Jones Industrial Average rose 0.2% in Tuesday’s stock market trading. The S&P 500 index lost a fraction. The Nasdaq compound fell 0.3%. The 10-year Treasury yield has jumped to its highest level since February 2020.
Dow shares in focus
JPMorgan’s shares rose 2.1% to 114.65, freeing a purchase point of 142.85 for a 13-month cup base with a handle. With short-term rates still close to historic lows, JPMorgan and other banks are benefiting from widening yield spreads by spending net interest margins.
Caterpillar shares rose 2.2% to 202.38, up from a 200.27 buying point from a short consolidation or a tight three-week pattern. Investors could have bought CAT shares on February 2, when it recovered from its 50-day line, recovered its 21-day line and broke the downtrend. Caterpillar stock was the IBD day stock on Tuesday.
Apple’s stock, also a component of Dow Jones, fell 1.6% to 133.19, almost touching its 10-week moving average. Investors can buy Apple shares as it recovers from that level, especially if it resumes its 21-day line and perhaps last week’s high of 137.88. A 138.89 cup entry with cable is still valid, while AAPL shares may be working on a new consolidation starting with its January 25 high record of 145.09.
After closing, Berkshire Hathaway (BRKB) reported that it cut its Apple by 6% in the fourth quarter. Apple’s shares are still Warren Buffett’s largest single Berkshire shares. Berkshire also sold all of JPM’s shares.
Tesla Stock
Tesla’s shares plunged 2.4% to 796.22, reaching 1% of its 10-week line. This is probably close enough for investors to take a stand, although they may want to wait for TSLA’s shares to resume their 21-day line. The actions may be in the process of forming a new base. Note that Tesla’s shares in the past few weeks have seen weeks of higher volume declines than in the weeks of upturn.
Just as recovering the 50-day / 10-week line can offer buying opportunities, a decisive break in the 10-week line can be a strong sell signal.
Some large institutional investors reduced their holdings in Tesla shares in the fourth quarter, according to the new 13F documents with the SEC. But Citadel Securities started a notable investor in TSLA shares.
Mixed growth stock
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) fell 0.5%, while the Innovator IBD Breakout Opportunities ETF (BOUT) advanced 0.35%. The iShares Expanded Tech-Software Sector (IGV) ETF fell 0.3%. The VanEck Vectors Semiconductor (SMH) ETF was up 0.6%.
Read The Big Picture every day to stay in sync with market direction and leading stocks and sectors.
Key earnings
SolarEdge’s earnings were better than expected, while the solar energy game also gave an optimistic orientation. SolarEdge’s shares rose 3% in expanded trade. Investors can buy shares of SEDG as long as they are within 10% of the 10-week line. There is also a potential break from a consolidation with an entry 377.10. SEDG shares rose 0.15% to 331.35 on Tuesday.
Exact Sciences reported a greater-than-expected loss, but exceeded revenue. Exact Sciences shares plunged 4% overnight. The leader in cancer diagnostic tests has been trading near highs in confusing action. EXAS shares fell 0.5% to 154.28 on Tuesday.
QuantumScape reported a profound loss without revenue in its first results since the manufacturer of the solid-state battery went public. QuantumScape’s shares soared 4% overnight. This came after QS shares fell 7.3% on Tuesday, trading well below its 50-day line.
Crispr also caused a great loss for the leader of gene editing. CRSP’s shares lost a fraction of the delay. Crispr’s shares fell 3.6% on Tuesday, again reaching resistance in its 50-day line.
RingCentral’s earnings surpassed visualizations, while the communication software maker also rose. But RNG’s shares fell 4% in overnight trading. RingCentral’s shares fell 1.4% to 437.02 on Tuesday, expanded from a recent base.
Core earnings overwhelmed views, while sales also outperformed. CSOD’s shares increased 16% overnight, signaling a bottom bottom gap. Cornerstone’s shares fell 2.4% to 46.26 on Tuesday, below a 46.92 buying point.
Bullish stock market analysis
Nasdaq is now 7.1% above its 50-day moving average, still slightly extended, but below Friday’s 7.7% or 8.1% on February 8. The stock market’s recovery has been giving warning signals for several weeks, from the Nasdaq’s expansion to the investor’s exposure to stocks above its 50- and 200-day moving average. But the market has so far ignored these concerns, with short-term retractions in recent months.
Investors need not be on the defensive, but should consider how much exposure they have. They must be prepared for a market downturn, with a game plan to reduce their holdings.
Follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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