Dow Jones futures soared on Wednesday, along with the S&P 500 and Nasdaq futures. The stock market recovery fluctuated on Wednesday, reversing the intraday decline, before closing slightly mixed.
X
Nasdaq remains somewhat extended, while climax-type actions Tilray (TLRY), Futu Holdings (FUTU), Digital Turbine (APPS), EXP World Holdings (EXPI) and ExOne (XONE) were the big drivers on Wednesday.
Tesla (TSLA) fell significantly as Bitcoin retreated, but could the electric vehicle maker be in the early stages of creating a new buying opportunity? As for the price of Bitcoin, it fell modestly on Wednesday, but the power-hungry cryptocurrency is still holding much of Monday’s big gain from Tesla’s Bitcoin purchase disclosure.
About that, Nvidia (NVDA) stood out once again, ignoring the intraday retreat of the stock market rise. After months of lackluster action and snapping days, Nvidia’s stock appears to be making a more significant move, cleaning up a flat base on Wednesday.
Uber Technologies (UBER), manufacturer of fiscal software Avalara (AVLR), Spirit Airlines (SAVE), real estate information game Zillow (Z) and pet insurer Trupanion (TRUP) were among the notable earnings reports. Avalara shares may test a cup-based point of purchase on Thursday.
Why you should make a profit from this day’s IBD stock
Great moves for wild actions
An increasing number of actions are experiencing climax-like executions. On Wednesday, Tilray’s shares soared 51% to 63.91 in massive volume, with Reddit investors rushing for cannabis stocks. TLRY stock is now 117% above its 10-day moving average. Traditionally, 20% was a sign that a stock would likely retrench. In the current market, 40% or more is usually the trigger. But Tilray’s shares were still rising sharply overnight.
Hong Kong’s Futu brokerage rose 7% to 165.24, but left the intraday high of 204.25. It is 36% above its 10-day line. Meanwhile, EXPI’s shares fell 15% to 136.34, close to its intraday 10-day line. APPS shares plunged 3.5%, while XONE shares plunged 16.5%.
Tesla and Nvidia’s shares are on the IBD Leaderboard. Nvidia’s shares are on SwingTrader.
Dow Jones Futures Today
Dow Jones futures were up 0.1% against fair value. The S&P 500 futures gained 0.1%. Nasdaq 100 futures were slightly above breakeven.
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 107.80 million. Deaths from Covid-19 reached 2.36 million.
Coronavirus cases in the USA reached 27.88 million, with deaths above 482,000. New coronavirus cases and hospitalization levels continue to drop dramatically, while deaths are also decreasing. Vaccinations are continuing, with the likelihood of increased supply and more vaccine options within a few weeks. The major concern is the spread of the more contagious Covid variant, first detected in the UK
Stock market rally Wednesday
The stock market recovery opened upwards, fell backwards and finally closed closely mixed.
Fed chief Jerome Powell briefly helped boost stocks on Wednesday afternoon, while once again reiterating his support for aggressive monetary policy to support the economy. He says there is no reason to think about containing support until the pandemic is over.
The Dow Jones Industrial Average rose 0.2% in Wednesday’s stock market trading. The S&P 500 index closed in partial decline. The Nasdaq compound lost 0.25%.
Growth stocks were also mixed.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) fell 0.1%, while Innovator IBD Breakout Opportunities ETF (BOUT) fell 0.8%. The iShares Expanded Tech-Software Sector (IGV) ETF fell 0.3%. VanEck Vectors Semiconductor ETF (SMH) was up 0.3%, with Nvidia’s shares as a notable component.
Tesla Stock
Tesla’s shares fell 5.3% to 804.82, reducing its 21-day exponential moving average. Tesla is retreating after Monday’s small gain, with the EV maker reporting that it bought $ 1.5 billion in Bitcoin. But a pullback or prolonged pause could give investors something they haven’t had with Tesla’s shares in nearly three months: a buying opportunity.
Tesla’s shares are just 4.9% above its 10-week line. If stocks could drop to 10 weeks or move to the side and wait 10 weeks to catch up, a recovery would offer a chance to initiate or increase a TSLA stock position. This can also be the start of a new base, with an additional buying opportunity.
But, all of this is hypothetical. At the moment, Tesla’s shares are not in their 10-week line and are not recovering. The EV maker has been in a long, long run since the fall of the coronavirus or even in late 2019. It is quite possible that TSLA’s actions will pause or fix for a long time. Much of this will have to do with the market.
Nvidia Stock
Nvidia’s shares rose 3.5% to 590.57, moving above a flat-base purchase point of 587.76 and beating the September 2 high, according to MarketSmith’s analysis. This follows Monday’s 6.2% jump, releasing an early entry of 560.07 that may have been the place to start a position.
The relative strength line for Nvidia’s shares is starting to recover, but it is far from its peak in early November. The RS line, the blue line on the charts provided, tracks the performance of a stock against the S&P 500 index.
Bullish stock market analysis
Wednesday’s stock market share was reminiscent of January 25, when Nasdaq opened at record highs, sold strongly, but rose to modest gains. This presaged a remarkable sale at the end of the week. Wednesday’s stock was less volatile, but more growing names had losses like Tesla shares than gains like Nvidia.
As then, the Nasdaq was extended from the 50-day line. After closing 8.1% above its 50-day line on Monday and 7.9% on Tuesday, Nasdaq is still 7.4% above that key level.
This means that the risk of a retraction in the stock market rally remains high, although it need not happen immediately or be so violent.
Still, the Nasdaq has been extended, an increasing number of shares are climax-like movements, as investors are increasingly leveraged and more and more newbies are entering. GameStop (GME), Bitcoin or other highly speculative investments. There is definitely foam on the market right now.
Breakout Watch: 5G, IoT Trends takes this chip stock to the shopping zone
What to do now
Investors may want to consider selling strongly, especially with very extended shares. Do not suffer loss of stocks in this environment. Consider leaving the margin.
If the stock market rally has a modest decline in the near future, you will want purchasing power to seize opportunities as strength returns. If the market rally falls in a correction, you will be happy to have made some profits near the top.
So, have a game plan for your participation. What will you do if your actions reach certain levels? If you have an exit strategy in place, you will be able to handle market fluctuations without a panic in sales or a freeze.
Read The Big Picture every day to stay in sync with market direction and leading stocks and sectors.
Follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
YOU MIGHT LIKE:
Why this IBD tool simplifies the search for the best actions
Best growth stocks to buy and watch
IBD Digital: Unlock IBD’s premium stock lists, tools and analytics today