Dow Jones futures will begin trading on Sunday night, along with the S&P 500 and Nasdaq futures. The stock market rebound had a modest bearish week, but the Nasdaq showed more technical damage. the Facebook (FB), US Steel (X), Wayfair (W), father of Google Alphabet (GOOGL) and Apple vendor Qorvo (QRVO) are among notable actions near points of purchase.
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Although the investment can be complicated, there are also some simple concepts. You want to invest when the stock market is above the 21-day exponential moving average and the 50-day line. This goes for the main indices and also for the main shares. At the moment, the stock market is deeply divided: the Dow Jones and the S&P 500 are living above those levels, while the Nasdaq is not.
The recovery of the divided market is especially difficult to progress.
Facebook Actions, Dick’s Sporting Goods (DKS) and Element Solutions (ESI) are above points of purchase or early entries. Meanwhile, shares of Google, Qorvo, US Steel and Wayfair are close to buying points.
Google and Dick’s shares are on the IBD Leaderboard. Wayfair’s shares are in the IBD 50.
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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.
Join IBD experts as they analyze actionable stocks at the stock market’s high on IBD Live.
Coronavirus News
Coronavirus cases worldwide reached 122.87 million. Deaths from Covid-19 reached 2.71 million.
Coronavirus cases in the USA reached 30.42 million, with deaths above 554,000.
Stock market rally last week
Overview of the US stock market today |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain / Loss | % Change |
| Dow Jones | (0DJIA) | 32628.04 | -234.26 | -0.71 |
| S&P 500 | (0S and P5) | 3912.81 | -2.65 | -0.07 |
| Nasdaq | (0NDQC) | 13215.24 | +99.07 | +0.76 |
| Russell 2000 | (IWM) | 227.01 | +1.77 | +0.79 |
| IBD 50 | (FFTY) | 46.77 | +0.42 | +0.91 |
Last updated: 16h06 ET 19/03/2021 |
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The stock market recovery looked promising earlier in the week, with the Dow Jones and S&P 500 reaching new highs and the Nasdaq above its 50-day moving average. But at the end of the week, with Treasury yields skyrocketing and crude oil prices falling, the main indexes erased gains and a few more.
The Dow Jones Industrial Average fell 0.5% in last week’s stock market trading. The S&P 500 index declined 0.8%, but remained above the 21 and 50 day lines. The Nasdaq compound lost 0.8%, but the 3% drop on Thursday pushed it below the 21- and 50-day lines.
The 10-year Treasury yield rose 12 basis points to 1.73%, with almost all of that on Thursday.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) fell 0.5% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) sank 1%, but both remained above their 50-day lines. The iShares Expanded Tech-Software Sector (IGV) ETF fell 2.5%, falling further compared to 50 days. VanEck Vectors Semiconductor ETF (SMH) rose 1.2%, but failed to stay above 50 days. Qorvo’s stock is part of SMH.
Reflecting more speculative story actions, Ark Innovation ETF sank 3.1% and Ark Genomics ETF 1%, both finding resistance in their 21-day lines.
Dick Stock
Dick’s stock of sporting goods rose 3.8% to 80.58 on Friday, moving just above a buying point of 80.42. It was a short consolidation that would one day cease to be a cup base. The volume was low at the breakout, which is not great. But the relative strength line, which tracks a stock’s performance against the S&P 500 index, is at a new high. The gains are out of the way.
Facebook Stock
FB’s shares jumped 4.1% on Friday, to 290.11 in high volume, while CEO Mark Zuckerberg minimized the impact of Apple(AAPL) new privacy rules in Facebook’s advertising business. Facebook shares reached 286.89 initial entries in large volume and are approaching 304.77 official purchase points. Investors can start a position here, although, after a recent run, FB’s shares may retreat and form a leverage.
The RS line for FB shares has been delayed for months, but is now at a maximum of 2021.
Element Solutions inventory
A specialty chemicals maker with some exposure to technology fell nearly 5% last week to 19.75, staying just above the 19.50 point of a breakout earlier this month. ESI’s shares found support on Friday near this entry and just above the 21-day line. Investors could buy Element Solutions shares at current levels, or perhaps break a trend line in a short consolidation just above the point of purchase. Cleaning that high handle would offer another point of purchase on 9/21.
Google Stock
Google shares fell 1.1% last week to 2,2026.96, closing slightly below its 21-day line. The FANG stock now has a flat base with a buying point of 2,145.24, according to MarketSmith’s analysis. But GOOGL’s stock could rebound just above its 10-week line. If it beats last week’s high and reaches 2,114, that could provide an early entry starting at 10 weeks.
US steel stock
US Steel fell 7.3% to 22.41 last week, but it was still a constructive move after getting close to the top of a canopy base. On a weekly chart, the X stock now has a handle cup point with a 24.56 point buy. The daily chart shows an entry of 24.81 cups without handles, but US Steel is on its way to recover after Monday.
Wayfair Stock
On Friday, Wayfair shares rose 2.9% to 335.36. During the day, the stock reached 348, briefly releasing an identifier entry of 343.09. The RS line for Wayfair shares is well on consolidation highs, although out of its peak in August.
Wayfair’s shares were Friday’s IBD shares.
The online furniture retailer is in a prominent position in the market.
Luxury Furniture Retailer HR (UR) jumped 6.1% on Friday and 9.2% on the week to 515.64. The HR stock has an official buying point of 524.32, but it offset a bearish trend and established a closing high. RH’s shares would be actionable, but the earnings expire on Wednesday.
Meanwhile, luxury furniture and household goods retailer Williams-Sonoma (WSM) rose 29% last week due to strong gains and guidance. WSM shares moved out of a base on Thursday and continued to rise on Friday.
Qorvo Stock
Qorvo’s shares rose 4.2% to 179.85 last week, recovering its 50-day line. During the week, the 5G and iPhone chipmaker reached 185.96, releasing some of the first entries, before backing down. Now, clearing last week’s high would serve as an early entry. An advantage of using this entry is that if QRVO’s shares pay off, Nasdaq’s shares are likely to resume their 21-day, if not 50-day line.
The official point of purchase is 191.92.
Qorvo’s earnings growth accelerated for three consecutive quarters, while revenue growth accelerated for two consecutive quarters.
Several other chip stocks are close to points of purchase, including Applied Materials (AMAT), MKS Instruments (MKSI) and Entegris (ENTG).
As for Apple’s shares, tech titan Dow Jones fell 0.9% to 119.99, falling below its 21-day line and well below its 50-day line. AAPL’s shares did not recover much from the March low.
Market Rally Analysis
In general, you want the major indices and major stocks to live above their 21- and 50-day moving averages. On Friday, the S&P 500 index and the small Russell 2000 capitalization found support around their 21-day lines, slightly above their 50-day lines. The Dow Jones never came close to any of those lines.
But the Nasdaq remains below its 21- and 50-day lines, with Friday’s recovery recovering only part of the 3% drop on Thursday. Investors are likely to wait until the Nasdaq returns above these moving averages, as well as last week’s highs, before increasing exposure to the technology.
It is not yet clear whether the Dow and the S&P 500 will pull the Nasdaq up above key levels or whether the Nasdaq will drag down the broader stock market recovery. In a bullish market trend, stocks are likely to show an upward trend. But in a half-rally, half-correction environment, it is difficult to have any sense of the true direction of the market.
As for the main shares, the real economy and the reopening shares have seen solid gains in recent weeks. Technology stocks have struggled, with a recent faltering recovery. Many are also stuck below their 21 and 50 day lines.
But in the last week or so, recent disruptions of all kinds have had a little more trouble, whether it’s going up slowly, testing points of purchase or retreating below points of purchase.
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What to do now
An investor does not need to make money on half of his trades if the winners are big and the losses are small. In the current market climate, it is difficult to progress with a low percentage of victories and with the winners achieving small to modest gains.
Investors may want modest exposure, some long-term winners and some pilot positions in different sectors, to stay in step with the market.
But you probably don’t want to invest heavily, even outside of technology. A busy market is very difficult. It is strong enough to tempt investors to buy – usually at short-term peaks – but weak enough to force losses to stop.
In addition to preserving your capital, you want to preserve your psyche. Having a series of losses in a bad market can make you shy when the market shows a clear upward trend and you want to be aggressive.
If you kept stocks that are living below your 21 and 50 day lines, you may want to quit, especially if they have a higher volume. If you are betting on one or two stocks like this, with huge gains, you can try to weather the storm, but don’t do it with the volume of your portfolio.
That said, many stocks are not far from the points of purchase, like the shares of Wayfair, Qorvo or Google. Some good days for the market to rally and these stocks can be actionable. So, work on your watch lists. Find quality stocks above your main moving averages. Be sure to include stocks in a variety of sectors to make sure you are at the top of this ever-changing market.
Read The Big Picture every day to stay in sync with the direction of the market and leading stocks and sectors.
Follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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