Dow Jones futures as well as S&P 500 futures and Nasdaq futures will open Sunday evening. The week of gains for stocks was generally positive, with the Nasdaq and small caps leading the way.
But the market rally showed resilience amid some mixed headlines as major indexes found resistance after recent strong gains.
Berkshire Hathaway (BRKB) earnings are due Saturday morning. Investors are focused on whether Warren Buffett has increased Apple stock and other core holdings, and whether Berkshire has increased its net stock exposure as it nears a market bottom.
BRKB shares fell 2.8% last week to 292.07, trading between the 200-day and 50-day line. Berkshire Hathaway stock has rebounded from its June lows, but remains well below its late March peak of 362.10.
Chip stocks are rebounding, a positive sign for any market rally. Monolithic power system (MPWR), KLA (KLAC), analog device (ADI), Axcelis Technology (ACLS) and all of them (ON) is rising but is currently in no man’s land, extending from early entry but below traditional buy points.
apple (AAPL) may still be in the early entry range, but investors may want to wait to see if AAPL stock can form a handle.
Tesla stock sold off on Friday, but the electric car giant needed a break.Meanwhile, the California DMV alleges Tesla (TSLA) False advertising promoting autonomous and fully autonomous driving.
at last, Celsius (CELH) has undergone a heat check after huge gains in recent days and weeks. What Should Investors Do With Tuesday’s Earnings CELH Stock?
MPWR stock is a long-term IBD leader. KLAC stock is on the long-term leaders watch list. CELH stock, Axcelis Technologies, Onsemi, KLA and Monolithic Power are all in the IBD 50 Index. ADI stock, Onsemi and Monolithic Power are in the IBD Large Cap 20 Index. ACLS stock was Friday’s IBD stock. Monolithic Power and ON stocks were stocks earlier in the week.
The video embedded in this article discusses market behavior and analyzes it Apex Pharma (VRTX), EQT (EQT) and ACLS stocks.
Dow Jones Futures Today
Dow Jones futures open at 6 p.m. Sunday, with S&P 500 futures and Nasdaq 100 futures open.
Keep in mind that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading on the next regular stock market day.
Analyse actionable stocks in a stock market rally with an IBD expert on IBD Live
stock market rebound
The Dow Jones Industrial Average edged down 0.1% in stock market trading last week. The S&P 500 rose 0.4%. The Nasdaq Composite rose 2.15%. The small-cap Russell 2000 rose 1.9 percent.
The 10-year U.S. Treasury yield jumped 20 basis points to 2.84%, including 16 basis points after Friday’s top jobs report. The odds of the Fed raising rates by 75 basis points on Sept. 21 rose to two-thirds from about 40% before the jobs data.
U.S. crude futures tumbled 9.7 percent this week to $89.01 a barrel, hitting their lowest level before Russia’s invasion of Ukraine in late February.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rebounded 2.9% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) lost 0.7%. The iShares Expanded Tech-Software Sector ETF (IGV) rose 3.7%. The VanEck Vectors Semiconductor ETF (SMH) rose 2.7%.
The SPDR S&P Metals & Mining ETF (XME) gained 0.5% last week. The Global X US Infrastructure Development ETF (PAVE) edged up 0.15%. The U.S. Global Jets ETF (JETS) rose 3.2%. The SPDR S&P Homebuilders ETF (XHB) edged up 0.2%, its seventh straight weekly gain. The Energy Select SPDR ETF (XLE) fell 6.8% and the Financial Select SPDR ETF (XLF) dipped 0.1%. The Healthcare Select Sector SPDR Fund (XLV) fell 0.7% despite strength in biotech stocks.
Reflecting more speculative stocks, the ARK Innovation ETF (ARKK) rose nearly 11% last week and the ARK Genomics ETF (ARKG) rose 10.5%. Tesla stock remains a major holding in the Ark Invest ETF.
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Shares of Monolithic Power surged nearly 15% last week to 532.33 on strong earnings. Perhaps investors could have bought MPWR stock on the Aug. 2 earnings gap as it cleared some other resistance areas. But as of Friday’s close, Monolithic stock was trading 17% above its 200-day line and 24% above its 50-day line. The relative strength line is already high, indicating that MPWR stock is outperforming the S&P 500. The stock did have a 580.10 buy point from the consolidation into late November. But ideally, the stock would pause and form a handle. This would provide a lower entry and allow the moving averages to catch up some places.
The same goes for stocks of Axcelis, Onsemi and KLAC, which have all reported earnings in the past two weeks and are now extending from their moving averages, but below their traditional breakouts. ADI’s stock is about the same, although Analog Devices’ earnings are due on Aug. 17.
Apple shares rose 1.75 percent to 165.35, their fifth straight weekly gain. Investors could have bought AAPL stock as it cleared its 200-day line on July 29 after earnings. At 3.7% above the 200 antenna, it still operates as an early entry. The RS line for Apple stock is already high. The official buy point is 13.04, but a handle at current levels or a little higher would be attractive.
Tesla shares fell 6.6% to 864.51 on Friday and were down 3% for the week as it erased most of its seven-day winning streak. This also pushed the stock back below the 200-day line. But if TSLA stock can pause for a few days near current levels, a break above Thursday’s high of 940.82 could provide an aggressive entry. It’s too low for a traditional handle.
At Tesla’s annual meeting on Thursday night, shareholders approved a 3-for-1 stock split, even though it was expected months ago. CEO Elon Musk spoke at length about Tesla’s prospects without saying anything dramatic. Elon Musk’s ongoing Twitter saga could be a drag on TSLA stock.
legal experts say Twitter (TWTR) There are good reasons to think Musk should go ahead with his $54.20 per share buyout deal. The Musk-Twitter experiment will take place in October. In the latest legal filing, TWTR shares rose 3.6% to 42.52 on Friday, regaining their 200-day line and hitting their highest level in nearly three months.
Meanwhile, the California Department of Motor Vehicles on July 28 accused the electric car giant of misleading customers about the capabilities of Autopilot and FSD, according to documents first reported by the Los Angeles Times. But if the state DMV wins the lawsuit, it may just need Tesla to revise its advertising and marketing.
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Celsius stock has been falling sharply since breaking above the 200-day line on July 5. On August 1, it was reported that Pepsi (PEP) holds a substantial stake in CELH and will be the main distributor for the energy drink maker.
Shares of CELH fell 9% to 98.62 on Friday and are up nearly 11% for the week even as it rebounded from its 10-day line. Celsius will rise from the small-cap S&P 600 to the S&P Mid-Cap 400. But there are fewer mutual funds and ETFs tracking midcap funds than the S&P 600, so the result is that fewer index funds are likely to own CELH stock.Plus, the leader in energy drinks monster drink (MNST) fell 5% on Friday on weak earnings.
Celsius earnings expire on Tuesday, so investors have a say. If you bought CELH stock near the 200-day or resistance at 72, you still have plenty of cushion. You can choose to lock in a portion of your profit. For those who bought the extension on Monday’s Pepsi news, you probably didn’t have much cushion or were in the red ahead of the results. Celsius stock tends to be highly volatile based on earnings.
Market rebound analysis
It’s been a mixed week for the stock market rally.Growth and small caps led gains, while the Dow and S&P 500 were little changed
But the market rally could be heavily sold off after stocks rallied to resistance late last week, given a slew of earnings and a red-hot jobs report suggesting the Fed will hike rates aggressively for an extended period of time. But they paused at most. Friday’s action was particularly encouraging.
The Nasdaq is above its early-June high, but it is rising to trendline since the beginning of the year. The Russell 2000 is at its early June highs, while the S&P 500 and Dow are still at that key level.
Longer pauses or modest pullbacks would be healthy. The market rally has come a long way, with most of the gains coming from relatively light volume.
Meanwhile, many leading stocks or potential leaders can take a breather. A pause or pullback in the major indexes would give companies like Monolithic Power and Onsemi an opportunity to build handles, create lower entry points and allow moving averages to catch up.
The same goes for Apple stock, Tesla and many others.
Market leadership is expanding. Biotechnology, chips, aerospace/defense, solar, steel and energy, to name a few, are all showing strength.
These are encouraging signs. But it could still be a bear market rally that eventually runs out of steam.
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what to do now
Investors should play this market, but not for all marbles. There are still reasons to be cautious about the current market. Not many stocks have a buy signal at any given time, and volatility and industry rotation can make it difficult to hold a position.
So be careful adding exposure. There is still the argument for taking some of the profit.
Build your watch list. Make sure to cast a wide net so you can spot potential leaders from every field.
Read the big picture every day to stay abreast of market direction and leading stocks and sectors.
Follow Ed Carson on Twitter @IBD_ECarson Stock market updates, etc.
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