The Dow Jones futures will open on Sunday night, along with the S&P 500 and Nasdaq futures. The stock market remains divided, but the rise is widening significantly, with more and more stocks from a variety of sectors bursting.
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The only notable exception is Nasdaq and growth stocks, but even they had a provisionally positive week.
Delta Airlines (DAL), Las Vegas Sands (LVS) and Marriott International (MAR) are among several travel stocks showing high in similar patterns, with United airlines (UAL) already releasing a new point of purchase.
Volkswagen (VWAGY) will hold a battery-focused Power Day event ahead of the opening of U.S. markets on Monday, similar to Tesla’s Battery Day last year. VW’s earnings are due on Tuesday, while the ID.4 crossover is launched in China and the US later this month. VW is spearheading the advance of traditional automakers in electric vehicles. All of this could put pressure on Tesla’s sales and prices, as well as Tesla’s shares. VW shares have skyrocketed in the past few months, outpacing the rapid rise General Motors (GM) and Ford Motor (F).
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S&P 500 Additions
Finally, NXP Semiconductors (NXPI), Penn National Gaming (PENN), Generac Holdings (GNRC) and Caesars Entertainment (CZR) are expected to join the S&P 500 index before opening on March 22. The shares rose 3% -7% on Friday with news from the S&P 500. NXP shares may offer a buying opportunity as they recover from their 10-week line, while Penn National, Genera and Caesars do not seem actionable .
Generac and GM’s inventory is on the IBD Leader Board. The shares of Generac and Tesla are on the IBD 50 list.
Dow Jones Futures Today
The Dow Jones futures will open at 6 pm ET, along with the S&P 500 and Nasdaq 100 futures.
Keep in mind that overnight action on Dow futures and elsewhere does not necessarily translate into real trading in the next regular stock market session.
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Coronavirus News
Coronavirus cases worldwide reached 119.60 million. Deaths from Covid-19 reached 2.65 million.
Coronavirus cases in the US reached 29.99 million, with deaths above 545,000.
Stock market rally
The stock market recovery has continued to strengthen and expand in recent days, with the Dow Jones, S&P 500 and Russell 2000 reaching historic highs.
The Dow Jones Industrial Average rose 4.1% in last week’s stock market trading, reaching a record high in the last four sessions. The S&P 500 index advanced 2.6%, while the Russell 2000 rose 7.35%. The Nasdaq compound rose 3.1%.
The 10-year Treasury yield jumped to a new 13-month high, up 10 basis points on Friday, to 1.63%.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) shot up 8% last week and the Innovator IBD Breakout Opportunities ETF (BOUT) jumped 9.6%, both easily recovering their 50-day lines. IShares Expanded Tech-Software Sector ETF (IGV) was up 2.7% and VanEck Vectors Semiconductor ETF (SMH) was up 0.9%. both below their 50-day lines.
Reflecting more speculative history stocks, Ark Innovation ETF jumped 8.2% and Ark Genomics ETF 7.8%, but both are well below their 50-day lines.
Read The Big Picture every day to stay in sync with the direction of the market and leading stocks and sectors.
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VW Power Day
Monday’s VW Power Day is Volkswagen’s de facto response to last year’s Tesla Battery Day, but without a one-year buildup. . He should detail his battery and infrastructure strategy, possibly showing the advances in pack or cell technology.
On Tuesday, VW will release the figures for the entire year.
VW shares have risen 19% so far in March, reaching their best level since 2009, with investors buying into their EV strategy. GM and Ford shares are up 15% this month. VW and Ford are greatly expanded. GM’s shares ended a mixed consolidation on Friday, but 15% above its 50-day line also seems stretched.
Tesla’s shares rose 2.7% in March and 16% last week. But it is finding resistance at its 21-day exponential moving average and still well below its 50-day line. Many highly valued growth stocks look like the TSLA stock chart.
Stock market analysis
The stock market continues to have a split personality with the Dow Jones, S&P 500 and Russell 2000 at new highs, while the Nasdaq is just below its 50-day line.
The economic reopening parts are doing well, including mining, manufacturing, travel, transportation, multiple retailers and more.
And it’s no wonder. The US economy will shift from a massive recession to a huge economic boom in about a year. Coronavirus restrictions are easing as vaccinations increase and cases decrease, encouraging a return to normal activity, including long-standing inactive trips. Meanwhile, the $ 1.9 trillion Biden stimulus has just been approved with checks for $ 1,400 for most Americans, weeks after a more modest aid package from Covid with checks for $ 600. The White House and Congressional Democrats are planning an even bigger spending account this year, with trillions of dollars for infrastructure.
Just to highlight travel actions, Trip.com (TCOM) surpassed a tight three-week pattern on Friday. The three-week squeeze is just above the previous base, so it offered an opportunity for investors to add shares or start a new position in TCOM shares. United’s shares came out of a similar short consolidation – although not a rigid pattern – slightly above a base.
Delta, Marriott, Hilton (HLT) and Hyatt (H) are assembling on their own shelves. The same is true of the shares of Las Vegas Sands, which has a three-week selling price that looks messy on the daily chart, but is extremely tight on the weekly.
Nasdaq is late, but not losing
The Nasdaq saw a solid gain last week, closing close to the rise in its weekly range, after starting with a 2.4% drop on Monday. On Friday, the Nasdaq fell below its 50-day high as Treasury yields soared. But it held up relatively well, closing down just 0.6% on Friday, at the highs of the session.
Nasdaq has yet to confirm that its rally attempt has legs and remains vulnerable to spikes in Treasury yields. A Nasdaq follow-up day would ease fears that technology stocks would pull the broader market down, as they did in early March.
But even if the Nasdaq recovers, the growth names still look flawed. An immediate rush back to new highs for Tesla shares or other highly valued names would not seem normal. Also remember that Tesla and many of those stocks had an incredible run last year. Therefore, there are several reasons why they may need weeks or months to be set up again on the proper basis.
What to do
The good news about the division of the market is that, although growth stocks are under impaired reserve, many economic recovery actions are emerging and showing strong gains.
Thus, investors need not remain on the sidelines. While CAN SLIM investors gravitate towards growth stocks for obvious reasons, many “model book” winners of all time have been twists and turns. You need to be flexible and recognize which actions are working and which are not.
Look for stocks with strong relative strength. Pay close attention to those with robust profit estimates and those who are establishing themselves on a solid footing.
If you are not comfortable buying non-growth stocks, you can buy an ETF like SPY, IWM or various industry games like XME (mining), JETS (airlines) or XHB (construction companies). And you can always stay in cash until the technology stocks really recover.
Follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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