As with S&P 500 futures and Nasdaq futures, Dow Jones futures changed little overnight. The stock market’s rally on Wednesday was mixed, but the Dow Jones hit record highs, while rising Treasury yields weighed on the name of growth.
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Tesla (TSLA), meta platform (FB) (nee Facebook) and Datadog stock are all getting established, but some are hitting resistance. Breaking these resistance levels will provide early entries. fb stock and datadog (DDOG) had already cleared trend line entries, but recent short-term highs are proving to be important.
Meanwhile, AMD stock and NVIDIA (NVDA) bounced back for the second day in a row, losing 3.2% and 1.1%, respectively. This largely erased Monday’s bullish move. Like Facebook and DDOG stocks, Monday’s moves offered early entries for AMD and Nvidia stocks, but investors may want to use Tuesday’s intraday highs or wait for a proper base to form before taking new positions.
Tesla, Advanced Micro Devices (AMD) and Nvidia are on the stock IBD leaderboards. Tesla stock and AMD are at IBD 50.
dow jones futures today
Dow Jones futures were largely flat versus fair value. S&P 500 futures and Nasdaq 100 futures remained virtually unchanged.
Remember that overnight action in Dow futures and elsewhere does not necessarily entail actual trading in the next regular stock market session.
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coronavirus news
Worldwide coronavirus cases reached 284.77 million. The death toll from Kovid-19 is above 5.43 million.
With over 843,000 deaths, coronavirus cases in the US have risen to 54.6 million.
New COVID cases continue to rise, with omicron being far more contagious than previous COVID variants worldwide and in the US, but the likelihood of serious illness being particularly high among those who have been vaccinated.
stock market rally wednesday
The stock market rally had another quiet session. The Dow Jones Industrial Average rose 0.25% in Wednesday’s stock market trading. The S&P 500 index climbed 0.1%. The Nasdaq Composite dropped 0.1%. The small-cap Russell 2000 rose 0.1%.
The 10-year Treasury yield rose six basis points to 1.54%, reclaiming its 50-day line. US crude futures climbed 0.8% to $76.56 a barrel as domestic reserves fell last week.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) advanced 0.9%, while the Innovator IBD Breakout Opportunities ETF (BOUT) gained 0.7%. The iShares Extended Tech-Software Sector ETF (IGV) dropped 0.2%. DDOG stock is an IGV holding. The VanEck Vector Semiconductor ETF (SMH) was just below breakeven. AMD and NVDA stocks are the major SMH holdings.
The SPDR S&P Metals & Mining ETF (XME) was down 0.6% and the Global X US Infrastructure Development ETF (PAVE) lost 0.4%. The US Global Jets ETF (JETS) dropped 1.5%. The SPDR S&P Homebuilders ETF (XHB) climbed 0.9%. The Energy Select SPDR ETF (XLE) was down 0.6% and the Financial Select SPDR ETF (XLF) was down 0.1%. Health Care Select Sector SPDR Fund (XLV) rose 0.6%.
Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) retreated 1.1% and the ARK Genomics ETF (ARKG) 0.85%. Tesla stock remains the No. 1 holding in ARK Invest’s ETF, but Kathy Wood has cut her stake significantly in recent months.
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Tesla Stock
Tesla stock fell 0.2% to 1,086.19 on Wednesday. After rising above recent lows, the stock continues to remain right around a declining trend line. Tuesday’s high of 1,119 TSLA could serve as an early entry for the stock. Ideally, the EV giant would make a handle here, making it a less official buying point. As per MarketSmith analysis, the current buy point for a double-bottom base is 1,202.05.
In early January, Tesla will release its fourth-quarter production and delivery figures, with Monday, January 3rd as the most likely date. With analysts expecting another record quarter of Tesla deliveries, much talked about sales could be a blow. One way or another, the data will likely be the catalyst for TSLA stock.
meta platform stock
The Meta Platforms stock fell nearly 1% to 342.94 on Wednesday. While FB stock is still above a trend line entry that was cleared on Monday, investors are now looking to initiate a position until the meta stock clears its November 22 high of 353.83. This will act as an opening entry, and can be viewed as a double-bottom base. A reversal from Tuesday’s intraday high of 352.71 suggests this area is a major resistance. Officially, FB Stock has a Cup Base with a buy point of 384.43.
datadog stock
DataDog stock rose 1.3% to 179.71 on Wednesday, having found support at the 50-day line. Shares cleared a trend line entry on December 22, but then hit resistance on Tuesday, falling short of an intraday high of 186.28. DDOG stock had a short-term high of 185.95 on 9 December and 187.70 on 29 November. A strong move above Tuesday’s high would offer a fresh opening entry. The official buy point of Datadog Stock is 199.78.
One concern is that Datadog is almost a lone wolf in these dog days for the software sector.
market rally analysis
The stock market rally continues to strengthen after a solid pullback. If the major indices stall in this low-volume environment by the end of the year, major stocks including Tesla and AMD could form a handle or finish base. This would leave investors in a good position in 2022, as institutional traders return.
The Dow Jones hit record highs on Wednesday after the S&P 500 hit an all-time high on Monday. The Nasdaq Composite is not far off.
The Russell 2000 is still below its 200-day line. Market breadth is lower than December lows, but remains relatively weak.
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What do we do now
With the coming year coming to a close and business activities slowing down, there is no need to be overly intense. New Year’s Eve can be a raucous time for young fun-goers, but 5 a.m. on New Year’s Day isn’t the time to suddenly get frantic.
Riding into 2022 with your current holdings, whether it’s all cash, some token position or solid exposure, is a sensible strategy.
Over the next several days, investors should build their watch list. Make sure you’re keeping an eye on a wide range of areas. The market leadership is relatively broad.
In the meantime, review your 2021 trading. Look at your big winners and losers. Try to figure out how you traded these stocks and how you could have improved, from selection to buying and selling.
Read The Big Picture every day to learn the direction of the market and keep up with key stocks and sectors.
Please follow Ed Carson on Twitter @ibd_ecarson For stock market updates and much more.
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