Dow Jones futures open Sunday night, along with S&P 500 futures and Nasdaq futures.
The stock market rally had a solid win over the holiday-shortened week. The Dow Jones hit a seven-month high. But the S&P 500 index is approaching its 200-day moving average, a key area of resistance. More economic reports are coming next week, including the November jobs report. That will be key for Fed rate expectations.
So investors may want to be careful about adding too much exposure in the short term.
Data storage firm Pure Savings (PSTG), China’s e-commerce giant Pinduoduo (PDD), Dollar General (DG) and Ulta Beauty (ULTA) earnings report this coming week. Stock at PDD, Dollar General, Pure Storage and Ulta Beauty are also close by as points of purchase.
Salesforce.com (CRM) and Snowflake (SNOW) headlines several software revenue reports, with key guidance for the entire sector and the IT spending outlook. Snowflake is expected to report its first ever quarterly earnings. But the stock of SNOW, and most other software games, is much higher.
The Megacaps are also still struggling. Tesla (TSLA) rebounded this week, but from bear market lows. Amazon.com (AMZN) is still below most moving averages. Apple (AAPL), Microsoft (MSFT), Nvidia (NVDA) and Google-parent Alphabet (GOOGL) are all above their 50-day line, but below their 200-day.
The video embedded in this article reviews last week’s market rally and analysis Dexcom (DXCM), Avis Budget Group (CAR) and PSTG stock.
Holiday shopping seems decent, not stellar. Black Friday online sales rose 2.3% compared to a year earlier to a record $9.12 billion. Apple products are in demand.
The Biden administration eased sanctions on Venezuela’s oil, allowed Chevron (CVX) produces crude oil in the country for the next six months and exports it to the US Big change in policy. That comes as the U.S. may soon halt releases from its severely depleted Strategic Petroleum Reserve.
Macau temporarily renews 10-year casino licenses for Wynn resorts (WYNN), Las Vegas Sands (LVS), MGM Resorts (MGM) and Melco Resorts and Entertainment (MLCO). That raises a great deal of uncertainty for casino operators focused on Macau, which is still struggling with China’s Covid restrictions. The deadline must be set before January 1.
Dow Jones Futures Today
Dow Jones futures open at 6 pm ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Remember that overnight action in the Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Join IBD’s experts as they analyze stock market rally action on IBD Live
Stock Market Rally
The stock market rally had a strong victory over Thanksgiving week.
The Dow Jones Industrial Average popped 1.7% in stock market trading last week. The S&P 500 index rose 1.5%. The Nasdaq composite advanced 0.8%. The small-cap Russell 2000 rose 1%.
The 10-year Treasury yield fell 11 basis points to 3.71%.
US crude oil futures fell nearly 2% to $78.31 a barrel last week.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.1% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 2%. The iShares Expanded Tech-Software Sector ETF (IGV) rose 1.8%, with Microsoft and CRM stocks the two biggest holdings. The VanEck Vectors Semiconductor ETF (SMH) rose 0.8%, with NVDA stock a major component.
Reflecting the more speculative stocks in the story, the ARK Innovation ETF (ARKK) fell 1.5% last week and the ARK Genomics ETF (ARKG) 1.9%. Tesla stock is a major holding in Ark Invest’s ETFs.
The SPDR S&P Metals & Mining ETF (XME) jumped 4% last week, under a potential breakout. The Global X US Infrastructure Development ETF (PAVE) rose 1.8% to a seven-month high. The US Global Jets ETF (JETS) rose 2.3% in a good week for travel sports. The SPDR S&P Homebuilders ETF (XHB) advanced 1.85%. The Energy Select SPDR ETF (XLE) rose 0.2%, near record highs. The Financial Select SPDR ETF (XLF) gained 2% and the Health Care Select Sector SPDR Fund (XLV) rallied 1.8%, both seven-month bests.
Five Best Chinese Stocks To Watch Right Now
Apple Stock, Megacaps
Apple stock fell 2.15% last week to 148.04, with most coming Friday as Covid lockdowns in China hurt iPhone production. AAPL stock found support at the 50-day line but the 200-day line was a point of resistance.
Microsoft stock rose 2.6% this past week to 247.49, moving above its 50-day line. But shares are still below 200 days. Nvidia stock jumped 5.6%, above its 50-day line but still has work to do to regain its 200-day line. Google stock rose 0.1%, more than its 50-day high.
AMZN stock fell 0.7%, below even its 21-day line, still near its bear-market lows.
Tesla stock rebounded from Wednesday’s bear market low of 166.19, closing the week up 1.5%, at 182.56. But it is still below the 21-day, 50-day lines and especially the 200-day.
Stocks Near Buy Points That Still Have Profits
Pinduoduo earnings are due before Monday’s open. Pinduoduo stock fell 6.4% to 65.69, but after a big rally for several weeks. PDD stock has a 72.84 cup-with-handle buy point, and is currently looking for support near the rapidly rising 21-day line. But the base is 47% deep. And the risks in China are high, with renewed lockdowns squeezing an already struggling economy.
Pure Storage’s earnings are due late Wednesday. PSTG stock fell 0.9% to 30.46 this past week, continuing to hold its 21-day streak. It has a cup-with-handle base with a 32.07 buy point, although investors can use 32.55 as a new management entry after a brief breakout attempt failed. Pure Storage stock currently has a five-week tight pattern with a 32.55 buy point. Meanwhile, NetApp’s earnings were Tuesday night, with the storage giant back above its 200-day line.
Dollar General earnings are due early Thursday. DG stock fell 0.2% to 257.30 last week, remaining a strong contender. Dollar Tree (DLTR) fell to weak guidance. Investors can still use a 261.69 cup-base buy point, according to MarketSmith analysis.
Ulta Beauty reported on Thursday. ULTA stock rose 1.8% to 448.46 this past week. Shares extended from a cup-with-handle buy point at 426.99 on a daily chart. On a weekly chart, Ulta Beauty is moving around a buy point at the 451.40 cup base. But the recent gains came in light volume, as ULTA stock extended from its 50-day line.
These 5 Stocks to Watch Near Buy Points
Market Rally Analysis
The stock market rally had a strong week, continuing to bounce off key support levels. On Friday, the Dow Jones cleared the August 16 peak to reach a seven-month best. The Russell 2000 retook the 200-day line on Friday.
During the week, the laggard Nasdaq bounced off its 21-day line, but some distance from its 200-day. With Apple, Microsoft, Tesla stock and software makers far from the top, that’s not a surprise.
The S&P 500 also advanced, closing above the 4,000 level. It is now within 1% of its 200-day moving average. On August 16, the S&P 500 came within a point of that key level, but then sold off for nearly two months. A decisive move above the 200-day line, which coincides with a declining-tops trendline, will signal that the current uptrend is more than a bear market rally.
But important economic reports are coming. On Wednesday, the October JOLTS report will show job openings, with Fed chief Jerome Powell speaking later in the day. On Thursday, the PCE price index, the Fed’s favorite measure of inflation, will be released, along with jobless claims and the ISM manufacturing index. The November jobs report is due Friday.
Tame inflation and labor data will strengthen expectations for a modest 50-basis-point Fed rate hike on December 14 and may signal a further slowdown in the pace of rate hikes early next year. The warm numbers could raise hopes of the Fed pivoting again.
A positive market reaction to economic data can trigger a flurry of buy signals. Many stocks from different sectors are building.
Time The Market With IBD’s ETF Market Strategy
What To Do Now
The stock market rally is in good shape. Investors should take advantage of this uptrend with moderate exposure.
In the very short term, investors may want to be cautious about making new purchases. The market rally faces a big technical test with inflation and jobs reports likely to play a key role in how it plays out. China’s Covid lockdowns are another big wild card.
But it is definitely time to prepare for new purchases. Building watch lists, making sure to find potential buys from different sectors. Then stay involved in the market action. Be prepared to make new purchases or scale back depending on market action.
Read the Big Picture every day to stay in tune with market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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