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Wednesday, October 5, 2022

Tech Futures Rise; five stock test resistance

The Dow Jones futures rose slightly overnight, along with the S&P 500 futures and Nasdaq futures. The stock market’s rally on Tuesday largely halted after a rally in the past four sessions. New Covid cases exceeded 1 million on Tuesday, but vaccinations and mild omicron infections have kept deaths from rising.




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meta stock, Tesla (TSLA), Pioneer Natural Resources (pxd), Shadow (SAIA) and Google Parent Alphabet (GOOGL) All trend lines are trading near buy point.

While offering technical resistance points, trend lines can provide early entries for stocks. They can be drawn on declining tops in the base, breaking the downslope of a handle or rebounding from a pullback to the 50-day line or other key level. All of these names except Tesla stock have trend lines that match relatively closely to the 50-day lines, offering another reason to consider them.

meta platform (FB) is clearly above its trend line, while Tesla, Google, Saya and PXD stocks all hit resistance around those entries.

Tesla stock and Google IBD are on the leaderboard. Google stock is on the IBD long-term leaders. Tesla stock is at IBD 50.

dow jones futures today

Dow Jones futures advanced 0.15% versus fair value. S&P 500 futures rose 0.2%. Nasdaq 100 futures rose 0.35%.

There was marginal rise in crude oil futures overnight. US crude oil reserves fell by 3.1 million barrels in the latest week late Tuesday, according to the American Petroleum Institute. The Energy Information Administration will release official crude and refined products stock and production data Wednesday morning.

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 283.14 million. The death toll from Kovid-19 is above 5.43 million.

With over 841,000 deaths, coronavirus cases in the US have risen to 54.13 million.

New coronavirus cases cleared 1 million for the first time on December 28, surpassing 1.15 million. US Covid cases near record high. But there has not been a sharp increase in hospitalizations and no increase in deaths. Credit vaccinations, past infections, and a mild Omron version.

stock market rally

The stock market rally had a mixed session. The Dow Jones Industrial Average rose 0.3% in stock market trading on Tuesday. The S&P 500 index dropped 0.1%. The Nasdaq Composite fell 0.6%. The small-cap Russell 2000 also retreated 0.6%.

The 10-year Treasury yield was flat at 1.48%, continuing to trade around its 200-day line. US crude oil prices rose 0.5% to $75.98 a barrel, from an intraday high, but were extending the winning streak to five sessions.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rallied 1%, while the Innovator IBD Breakout Opportunities ETF (BOUT) declined 0.3%. The iShares Extended Tech-Software Sector ETF (IGV) and VanEck Vector Semiconductor ETF (SMH) both fell 1%.

The SPDR S&P Metals & Mining ETF (XME) gained 0.75% and the Global ex US Infrastructure Development ETF (PAVE) gained 0.1%. The US Global Jets ETF (JETS) rose 0.6%. The SPDR S&P Homebuilders ETF (XHB) was up 0.3%. The Energy Select SPDR ETF (XLE) declined 0.1%, of which PXD stock is a constituent. The Financial Select SPDR ETF (XLF) was just above breakeven. Health Care Select Sector SPDR Fund (XLV) sank 0.3%.

Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) fell 1.8% and the ARK Genomics ETF (ARKG) fell 2.1%. Tesla stock is still the No. 1 holding in ARK Invest’s ETF.


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stock on trend lines

Meta Platforms, formerly Facebook, rose 4 cents to 346.22 excluding intraday gains. On Monday, FB stock rose 3.3% to 347.87, reversing from its 50-day and 200-day lines. It broke above a trend line that started in early September, with 344.46 being a relevant point. The meta stock is still close to those levels, with the November 22 short-term high of 353.83 as another potential resistance area. FB stock is a long way from its official buy point of 384.43.

PXD stock fell 1.1% to 183.72, barely past its 50-day line. Shares declined after a trend line topped intraday. Pioneer stock rose 3.2% to 185.77 on Monday, reversing higher and rebounding from its 50-day rebound in crude oil prices, fueled by plenty of shale plays. PXD stock has 196.74 official buying points.

Google stock fell 0.8% to 2,933.74. On Monday, the shares closed on what was essentially a short trend line, up 0.7%. According to MarketSmith, the stock of GOOGL has a flat-base buy point of 3,019.43.

Sia stock fell 0.9% to 330.19, right around a trend line. On Monday, shares rose 2.9% to 333.05, rebounding from the 50-day line, as many trucking stocks moved into higher gear. Sia’s stock has made a strong comeback from its December 20 low of 288.23. After this week it should have a fair basis with 365.60 buy points.

Tesla fell 0.5% to 1,088.47 after hitting 1,119 intraday. It turns 1,093.24 after a four-day, 22% rise, retracing the 50-day line and stopping right around a trend line. Ideally, the TSLA stock would breathe while creating a handle. But a solid move above Tuesday’s intraday high would offer a clear trend line break. Tesla stock has a double-bottom base with a buy point of 1,202.05.

market rally analysis

The stock market’s rally came to a halt on Tuesday, following a 1,000-point drop on the Nasdaq from its December 20 lows after Monday’s close. The S&P 500 is at record highs while the Nasdaq and Dow Jones are close.

The Russell 2000 reclaimed its 200-day line on Tuesday morning but then fell back. This is a reflection of the breadth of the overall market – has improved over the past week but there is still a long way to go.

On the Nasdaq, the losers outnumber the winners almost 2-to-1.

Market pause for the year-end will allow the stock to consolidate recent gains, perhaps setting up new entries in the form of larger institutions and overall volume returns for 2022. Stocks like Tesla or Google will look even more impressive through the trend line after hitting resistance for a few days. Of course, just because a stock moves up to resistance doesn’t mean it will punch.

Shipping stocks led by travel and trucking are key sectors, a particularly positive sign as the market rally weaves well to the Omicron Covid wave. The names of chips and house building are also strong. The medical sector has quietly been a pioneer in the past several weeks. Energy stocks are taking shape again. The software still seems to be damaged overall, but some are performing well.


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What do we do now

The recent four-day run-up saw several stocks clear buying points over the past few sessions, providing an opportunity to add exposure. A few more buying points topped Tuesday’s mixed action.

If you’ve already added significant performance over the past few days, you might want to pat until the new year. There is no need to place massive fresh bets in a light-hearted environment. The start of the new year can be swift. But even a quicker comeback driven by tax selling wouldn’t be surprising.

Work on your watchlist. Make a varied list of potential winners. The new year will offer far more opportunities for big gains than the last three days of 2021.

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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World Nation News Desk
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