Dow Futures: Bulls Resist Pullback Like Tesla, Nvidia Streaming; 5 stocks near the points of purchase

Dow futures tilted higher overnight, along with S&P 500 futures and Nasdaq futures. fedex (FDX) was reported after the close, as Federal Reserve Chairman Jerome Powell is scheduled to testify before Congress on Wednesday.

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The stock market rally saw losses for the second consecutive session. The Nasdaq and even the S&P 500 have been extended, so the pullback was not surprising and may be welcome. Major indices reluctantly gave up ground, particularly the Nasdaq, with Tesla (TSLA) And nvidia (NVDA) continue to move up.

Market breadth was soft on Tuesday, but it has been improving.

Meritage Homes (MTH) regained a buy point on Monday, while Allegro Micro Systems (ALGM) And Lantheus Holdings (LNTH) flashes early entries. ELF Beauty (dwarf) made a narrow entry. ATI (ATI) moves toward a potential entry.

However, buying stocks with the potential for the market to begin to decline carries additional risks.

Tesla and Nvidia stocks are running IBD Leaderboard, with ELF arrows on the leaderboard watch list. ELF Beauty and ALGM stock available at defect 50. Tesla stock is located at IBD Big Cap 20. Meritage Homes was IBD Tuesday’s inventory.

Fed Chairman Powell

Fed Chairman Jerome Powell will speak to the House Financial Services Committee on Wednesday at 10 a.m. ET, and then appear before the Senate Banking Committee on Thursday. Last week, the Fed left interest rates steady, but indicated it would raise rates two more times this year. Markets are largely anticipating a rally in July or September, but see little chance of a second rally by the end of the year. Fed Chair Powell, along with several other policymakers this week, may try to boost expectations for a second hike. But Powell was relatively pacifist in his comments after the meeting last week. In any case, inflation reports and other economic data in the coming weeks and months will tell the tale.

Dow jones futures today

Dow futures contracts were slightly above fair value. S&P 500 and Nasdaq 100 futures rose.

Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.

FedEx earnings

FDX stock fell 3% in extended trade after FedEx earnings narrowly beat fourth-quarter financial views while missing revenue. The shipping giant also gave guidance with 2024 EPS that was significantly lower than views. FedEx stock fell 0.8% to 231.65 in the regular Tuesday session, just below the 235.81 buy point of a flat base that is part of the bottom-to-bottom formation. The stock topped this entry last Thursday.

United Parcel Service (UPS) fell by 1% overnight. UPS stock is down 0.7% on Tuesday, and is trading around its 50-day and 200-day lines, well below its February 2022 peak.

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Stock market rise

The stock market opened higher with decent losses, but pulled back from its lows after the first hour of trading.

The Dow Jones Industrial Average lost 0.7% in stock market trading on Tuesday. The S&P 500 fell 0.5%. The Nasdaq Composite lost less than 0.2%. Small cap Russell 2000 fell 0.5%.

US crude oil prices fell 1.8 percent to $70.50 a barrel. The 10-year Treasury yield fell 4 basis points, to 3.73%.

Exchange Traded Funds

Among the ETFs, the Innovator IBD 50 ETF (fifty) increased by 0.2%. iShares Expanded Technology and Software ETF (IGV) slipped 1%. VanEck Vectors Semiconductor Corporation (SMH) decreased by 0.35%. NVDA, SMH’s premier holding company, rose 2.6%, hitting a new record high.

Reflecting more speculative stories, the ARK Innovation ETF (ARK)ark(down 0.1% and ARK Genomics ETF)ARKG) increased by 0.35%. TSLA stock, the No. 1 ETF on Ark Invest, rose 5.3% on strong China EV sales and another deal to ship the tech in the US, this time with Rivian (countryside).

SPDR S&P Metals & Mining ETFs (XME) fell 0.5%. US Global Gates Foundation ETF (Planes) fell 0.3%. SPDR S&P Homebuilders ETF (XHB) by 0.6%. Energy Defined Fund SPDR ETF (xle(down 2.2% and the SPDR Healthcare Sector Selection Fund)XLV) drive 0.1% down.

SPDR Financial Selection Fund (XLF) waived 0.75%. SPDR S&P Regional Banking ETF (KRE) declined 1.3%.

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Stocks near buy points

Meritage Homes rose 2% to 132.89, back above 130.68 buy points from a flat base, according to MarketSmith analysis. MTH stock has been trading around this entry for the past two weeks. Surprisingly strong housing starts helped boost homebuilders stocks.

Allegro Micro stock rose 4%, to 41.76. Stocks rebounded from the 50-day line, broke the trend line in their consolidation, and topped the short-term resistance. ALGM stock did all of this in larger quantities.

Lantheos jumped 5.2% to 92.87, moving strongly above the 50-day line. LNTH stock has emerging consolidation with buy potential of 100.85 points. But on Tuesday it offered early entry. Medical product companies have rebounded in the past several sessions

ELF rose 3% to 107.19, clearing 108.43 from a narrow three-week entry on the day and setting a new closing high. This provided a place for existing investors to add a few shares.

ATI stock rose 2.7% to 40.36. Specialty bullion has a 43.32 consolidation buy point on the daily chart, but is working on a potential handle. On the weekly chart, the handle is present, giving ATI stock a lower buy point at 41.

Market rally analysis

The stock market’s rally eased modestly again on Tuesday, but the major indexes came in off their highs for the day. Nasdaq, which was extended, hardly fell at all.

Megacap growth. In addition to Tesla and Nvidia shares, apple (AAPL), Meta platforms (meta), Amazon.com (AMZN) And Netflix (NFLX) are all advanced.

The broader market suffered losses, but in a normal and healthy way. The losers greatly outweighed the winners, but the overall trend was favourable.

First Trust Nasdaq 100 Equal Weighted Mutual Fund (QQEW) fell by 0.9%, but did not touch the 10-day line.

Invesco S&P 500 Equal Weight Fund (RSPIt also fell 0.9%, finding support at the 10-day line and near its peak in April.

The Nasdaq Composite is still 8.6% above its 50-day line, with the Nasdaq 100 up 9.9% above that line, both significantly higher.

Some buying opportunities appeared on Tuesday, such as Meritage and ALGM stocks. As always, market and sector performance will be key to how these stocks fare going forward.

A pause or pullback in the market may allow the leading stocks to find support at the major moving averages or they may consolidate around their traditional buy points, creating new entries. Other potential leaders, like ATI stock, are trying to forge handles.

Look at indexes or ETFs like Dow Jones, QQEW, RSP, and XLI to get an idea of ​​how a pause or pullback translates into individual names.

Of course, some stocks will lag or collapse in a modest decline. Some of these stocks may have lagged behind in recent weeks, but it’s not always obvious when the market is rallying.

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What are you doing now

A modest pullback appears to be the most plausible scenario for a stock market rally in the near term. The alternatives are sideways movement, more serious slippage or renewed market force that immediately pushes the Nasdaq to more extreme levels again. None of these scenarios look particularly bullish for new buys, especially technical plays.

If you make new or additional purchases in the current climate, be prepared to back out quickly. You could consider taking some partial profits on some of the extended names, although it depends on your position size, overall exposure and investment style.

Keep building watchlists. A large number of stocks need some time to generate new entries, but you want to be ready to pounce.

Read the big picture every day to stay in sync with the market trend, leading stocks and sectors.

Please follow Ed Carson on Twitter at @employee For stock market updates and more.

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