Dow Jones futures edged higher overnight, along with S&P 500 futures and Nasdaq futures. General Electric (GE) headlines key earnings early Tuesday.
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The stock market rally continued to advance Monday as Treasury yields retreated. The Dow Jones and S&P 500 hit fresh highs, though closing off best levels. Small caps led in a second straight day of stronger market breadth, a bullish sign.
Apple (AAPL) continued to advance, reclaiming a key level and offering an early entry. Affirm Holdings (AFRM), MongoDB (MDB), UiPath (PATH), Synopsys (SNPS) and Crispr Therapeutics (CRSP) flashed buy signals Monday.
United Airlines (UAL) reported better-than-expected fourth-quarter earnings Monday night. UAL stock rose sharply in late trade. Airline stocks have sold off following Delta Air Lines (DAL) earnings and the blocked JetBlue-Spirit Airlines deal.
General Electric, homebuilder D.R. Horton (DHI) and heavy truck maker Paccar (PCAR) report early Tuesday, as well as oil services giants Halliburton (HAL) and Baker Hughes (BKR). GE stock hit a fresh six-year high Monday, but is extended. DHI stock hit a record high, but is looking stretched from a short consolidation. PCAR stock flashed an early entry Monday. HAL stock and Baker Hughes are in sharp downtrends.
Netflix (NFLX) reports Tuesday night, with NFLX stock closing in buy range Monday.
Tesla (TSLA) looms Wednesday night. TSLA stock, in a sharp downtrend, reversed lower Monday amid analyst comments and FSD news.
MongoDB and AFRM stock were added to SwingTrader Monday. SNPS stock is on the IBD Long-Term Leaders list. Monday.com and MDB stock are on the IBD 50. MongoDB was Monday’s IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures edged up vs. fair value. S&P 500 futures tilted higher. Nasdaq 100 futures rose 0.1%.
The 10-year Treasury yield edged up to 4.1%.
China is mulling measures to buoy its ailing stock markets, Bloomberg reported Monday night. Hong Kong’s Hang Seng surged more than 3% at one point, but pared gains to less than 2%.
As expected, the Bank of Japan kept its ultra-loose monetary policy unchanged overnight.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
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Stock Market Rally
The stock market rally started off strong, faded significantly before shoring up near the close.
The Dow Jones Industrial Average rose 0.4% in Monday’s stock market trading. The S&P 500 index climbed 0.2%. The Nasdaq composite advanced 0.4%
The Dow Jones and S&P 500 hit fresh all-time highs Monday, while the Nasdaq set another two-year best, but closed well off highs.
Monday showed strong market breadth, suggesting that Friday’s broad rally wasn’t just a one-time blip.
The small-cap Russell 2000 jumped 2%, reclaiming the 21-day line after Friday’s rebound from the 50-day/10-week line.
The Invesco S&P 500 Equal Weight ETF (RSP) rose 0.5%, slightly outpacing the S&P 500 and moving back toward 52-week highs.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) gained 0.4%, another two-year high and besting the Nasdaq 100’s 0.1% uptick.
While several growth software and payment plays were notable winners, industrials, building and financials were strong.
U.S. crude oil prices popped 2.4% to $75.19 a barrel, the highest close since Dec. 26.
The 10-year Treasury yield fell five basis points to 4.09%. falling back after hitting resistance at the 50-day line on Friday. But the 10-year yield also found support at the 200-day line.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) rose 0.9%, with PATH stock in the ETF. The VanEck Vectors Semiconductor ETF (SMH) added 0.5%. Synopsys stock is in IGV and SMH.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) popped 2.3% and ARK Genomics ETF (ARKG) bounced 3.5%. TSLA stock is still a major holding across Ark Invest’s ETFs. CRSP stock and UiPath are significant Cathie Wood holdings as well.
SPDR S&P Metals & Mining ETF (XME) advanced 0.7%. U.S. Global Jets ETF (JETS) edged down 0.1%, with UAL stock a key component. SPDR S&P Homebuilders ETF (XHB) stepped up 1.7%. The Energy Select SPDR ETF (XLE) climbed 0.4%, with Halliburton and BKR stock both big members. The Health Care Select Sector SPDR Fund (XLV) and Financial Select SPDR ETF (XLF) also rose 0.4%.
The Industrial Select Sector SPDR Fund (XLI) was up 0.8%. GE stock is a major XLI holding, with Paccar also in the ETF.
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Apple Stock
Apple stock rose 1.2% to 193.90x, up 6.1% over the last three sessions. The iPhone giant is back above a $3 trillion valuation, after briefly losing its market cap crown to fellow Dow Jones tech titan Microsoft (MSFT) early last week.
AAPL stock is now clearly above its 50-day and 10-week lines as well above a downward-sloping trendline. The relative strength line had lagged for several weeks, but is starting to bounce back.
AAPL stock has a 199.62 buy point from a flat base.
Apple earnings are due on Feb. 1.
Stocks In Buy Areas
AFRM stock jumped 5.2% to 44.35 gapping above the 21-day moving average and decisively breaking a downtrend. That’s after rebounding from the 10-week line on Friday. Affirm stock flashed an early entry on Monday, though shares settled well off session highs.
MDB stock gained 3.1% to 413.42 breaking a downtrend as it rebounded from the 50-day line, offering an early entry. Shares came off intraday highs of 426.51 after briefly topping resistance at 425. MongoDB stock has a 442.84 buy point in a consolidation forged next to a failed cup-with-handle breakout.
PATH stock jumped 5.7% to 23.49, bouncing above the 21-day line and breaking a downtrend after reclaiming the 50-day line on Friday. Shares closed just above the 10-week line. UiPath stock has been consolidating for a few weeks after blasting out of a long trading range in late 2023. It’s on track to have a new base with a 26.52 buy point after this week.
CRSP stock leapt 5.3% to 65.26, reclaiming the 50-day line and brushing up against a downward-sloping trendline in a messy consolidation. Investors could use Monday’s high of 65.80 as specific entry. The official buy point is 76.97, according to MarketSmith analysis.
SNPS stock rallied 4.7% to 541.71, retaking its 50-day moving average and closing near session highs. That offered an early entry into an emerging consolidation. It’s also a good place to start a position in a Long-Term Leader like Synopsys, a chip-and-electronics design software firm.
Synopsys plunged on Dec. 22 on reports that it was in talks to buy Ansys (ANSS), with shares continuing to fall in early January. But SNPS stock rebounded on Jan. 5, then kept rising after the actual Synopsys-Ansys deal was announced on Jan. 16.
Tesla Stock Falls
Tesla stock fell 1.6% to 208.80 reversing from an intraday high of 217.80 to close at a fresh two-month low.
On Monday, Morgan Stanley’s Adam Jonas cut his TSLA price target to 345 from 380, saying, “Global EV momentum is stalling.” Jonas now values Tesla’s EV business at just 75, with most of his TSLA price target for Full Self Driving, robotics and artificial intelligence.
On Sunday night, Tesla released FSD Beta Version 12 to a few paying customers.
Tesla earnings are due Wednesday night. With the EV giant continuing to cut prices and increase discounts in the new year, the outlook for profit margins will be key.
What To Do Now
The market rally continues to act well despite Monday’s fade from morning highs.
Investors can still look for new buying or add-on opportunities, either adding incrementally to exposure or offsetting with profit taking or cutting losses. There’s also nothing wrong with holding steady with significant-to-heavy exposure, letting your stocks work.
But keep working on your watchlists for new setups and continue to grade the stocks in your portfolio.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
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