Dow Jones Futures: Santa Claus Rally Comes Early As Tesla Surges, These 5 Stocks Flash Buy Signals
Dow Jones futures will open on Sunday night, along with S&P 500 futures and Nasdaq futures. The stock exchange rally restored recently, with the S&P 500 almost at a brand-new high while a varied list of leaders flashed buy signals, consisting of AMD stock and Google moms and dad Alphabet (GOOGL).
While it may not be whatever financiers desired from Santa heading into Christmas vacation, it’s a lot much better than the swelling of coal they were anticipating after Monday, Dec. 19.
Tesla (TSLA) was a huge winner recently, rebounding strongly from the top of a previous base to clear its 50-day line. However Tesla stock isn’t in buy variety yet. On The Other Hand Tradeweb Markets (TW), ArcBest (ARCB), Advanced Micro Gadget (AMD), West Pharmaceutical Solutions (WST) and Google stock all are actionable now.
Tesla, Google, AMD and TW stock are on IBD Leaderboard. Google stock is on SwingTrader. Google and WST stock are on IBD Long-Term Leaders. Google, West Pharma, Tradeweb and AMD stock are on the IBD 50. Tradeweb likewise is IBD Stock Of The Day.
The video embedded in this short article covers the marketplace rebound and examined Tradeweb, AMD and ARCB stock.
Dow Jones Futures Today
Dow Jones futures open at 6 p.m. ET, along with S&P 500 futures and Nasdaq 100 futures.
U.S. stock exchange and lots of exchanges all over the world are closed on Christmas Eve.
Keep in mind that over night action in Dow futures and somewhere else does not always equate into real trading in the next routine stock exchange session.
Sign up with IBD professionals as they evaluate actionable stocks in the stock exchange rally on IBD Live
Coronavirus cases worldwide reached 278.52 million. Covid-19 deaths topped 5.4 million.
Coronavirus cases in the U.S. have actually struck 52.78 million, with deaths above 834,000.
New Covid cases are at their greatest number in months, as the super-infectious omicron alternative turbocharges an already-rising case count in much of the world. Nevertheless, omicron cases seem much milder usually than with prior Covid versions.
Stock Market Rally
The stock market rally started off the past week poorly but then came on strong, with three solid gains and closing near session highs. Technically, it’s a little early for a Santa Claus rally, but investors didn’t mind opening up gifts a bit early.
The Dow Jones Industrial Average rose 1.65% in last week’s stock market trading. The S&P 500 index climbed 2.3%. The Nasdaq composite and small-cap Russell 2000, which looked the worst on Monday, both rallied for 3.2% weekly gains.
The 10-year Treasury yield jumped 9 basis points last week to 1.49%. Crude oil prices popped 4% to $73.79 a barrel.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rebounded 4.75% last week. The Innovator IBD Breakout Opportunities ETF (BOUT) climbed 3.5%, nearly at a record high. The iShares Expanded Tech-Software Sector ETF (IGV) advanced 2.4%. The VanEck Vectors Semiconductor ETF (SMH) rallied 4.4%, with AMD stock a major component.
SPDR S&P Metals & Mining ETF (XME) rose 3.1% last week. The Global X U.S. Infrastructure Development ETF (PAVE) was up 1.7%. U.S. Global Jets ETF (JETS) ascended 6.7%. The SPDR S&P Homebuilders ETF (XHB) climbed 2.7%. The Energy Select SPDR ETF (XLE) edged up 0.9% and the Financial Select SPDR ETF (XLF) 0.6%, after both erased steep losses earlier in the week. The Health Care Select Sector SPDR Fund (XLV) climbed 1%, right at new highs.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) rose 1.9% last week and ARK Genomics ETF (ARKG) inched up 0.6%. Tesla stock remains the No. 1 holding across ARK Invest’s ETFs.
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Tradeweb stock jumped 3.8% to 98.89 on Thursday, capping a 4.2% weekly gain. TW rebounded bullishly from its 50-day line and broke a trend line, flashing an early buy signal Thursday. But it kept rising, briefly hitting a record high and topping a 99.35 buy point from a four-weeks-tight pattern that was almost a flat base. The relative strength line for TW stock is near a record high.
In another positive sign, other financial market or exchange stocks, including NYSE-owner Intercontinental Exchange (ICE), Nasdaq (NDAQ), CME Group (CME) and more are acting well.
ArcBest stock popped 5.45% to 111.65 higher, in a bullish outside week, clearing a trend line and a short-term peak as it extended a 50-day line rebound. That offered an early entry for ARCB stock, which has an official buy point of 116.89.
Several other trucking firms, including J.B. Hunt (JBHT) and Saia (SAIA), are also shaping up.
AMD stock rose 1.6% to 146.14 on Thursday, breaking a trend line and capping a strong weekly bounce from the 50-day line. It’s actionable here, with the Dec. 16 high of 147.93 another key hurdle.
Several other chipmakers, including AMD rival Nvidia (NVDA), are at or near buy points.
West Pharma Stock
West Pharmaceutical stock broke out past a cup-with-handle base buy point of 458.09 on Thursday, according to MarketSmith analysis. That continued a strong bounce from the 21-day and 10-week lines. WST stock rose 2.2% to 459.84 for the week. As a medical supplier, WST stock is another “picks and shovels” play, generating steady growth.
A wide variety of medical stocks are showing strength in recent weeks.
Google stock, after hitting a two-month low intraday Monday, rebounded for a 3.7% weekly gain to 2,938.33. That’s back above the 50-day line, a short trend line and an old buy point of 2,925.17. GOOGL stock now has a new flat base with a 3,019.43 buy point.
Tesla stock hit a low of 886.12 on Tuesday morning, more than round-tripping a 38% rally from a 900.50 cup-base buy point cleared in late October. But shares then roared higher, surging more than 14% for the week to 1,067 and reclaiming its 50-day moving typical. Tesla stock was the S&P 500’s biggest winner on Wednesday and Thursday.
CEO Elon Musk, amid some confusion, signaled that he’s nearly finished selling TSLA stock to cover a tax payment.
While the rebound from the prior base and running past the 50-day line are bullish moves, Tesla stock is not yet actionable. The EV giant has a consolidation that can be viewed as a double-bottom base with a 1,202.05 buy point. A downward-sloping trend line from the early November peak offers an early entry around 1,115.
Musk said Friday evening that Tesla was rolling out FSD Beta 10.8, the latest version of its driver-assist system being used by several thousand Full Self-Driving owners.
In early January, perhaps before the open of the first trading session of 2022 on Jan. 3, Tesla will release fourth-quarter production and delivery figures. Analysts are expecting another record quarter for deliveries, with plants near Berlin and Austin set to begin production soon.
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Market Rally Analysis
The stock exchange rally is looking promising again. On Monday, the Nasdaq undercut the early December lows, ending its rally attempt. But the S&P 500 did not, so the overall market rally continued. It didn’t look good at the time. But the major indexes rebounded strongly over the next three sessions, reclaiming their 50-day moving averages.
The S&P 500 hit a closing high Thursday, while the Nasdaq broke a trend line and cleared its high on Dec. 16, when the market reversed sharply lower. That action provides more confidence in the health of the market rally.
The Russell 2000 rebounded from Monday’s nine-month low, but is still below its 200-day and 50-day lines. That’s a good proxy for overall market breadth, which improved in the previous few sessions however remains woeful. New highs easily passed new lows on the NYSE on Thursday but still lagged on the Nasdaq.
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On the plus side, market leadership continues to broaden.
Travel stocks were big winners, and a clear signal that markets, for now, are once again feeling more confident about the omicron Covid variant. Medicals have quietly been very strong. Networking stocks are clear leaders in recent weeks. TW stock and other exchange plays are doing well, while many financials aren’t that far off from looking interesting.
Several chips are flashing buy signals, including AMD stock but also several chip-equipment makers. Trucking plays are looking strong, with ARCB stock perhaps leading a convoy in the coming weeks. Housing-related stocks, despite some bumps, are standing tall.
Software remains a weak area, however there are a few kernels of strength.
What To Do Now
The stock market rally is showing real momentum. If you haven’t already, you can start to add to your exposure. But don’t suddenly rush into stocks. See how some initial buys do. If your stocks and the market continue to act well, you can gradually come off the sidelines.
To get ready, work on your watchlists. Look for stocks with strong relative strength that are holding or reclaiming key support. Make sure to include stocks from a variety of groups and sectors. Then focus on stocks that are actionable or nearly so.
Historically, financiers might expect more presents this coming week. The traditional Santa Claus rally covers the last five trading days of the year, plus the first two trading sessions of the new year.
But it’s no guarantee. While the market reacted favorably to the latest omicron Covid headlines, coronavirus or other headlines could roil markets amid light volume.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock exchange updates and more.
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Jobber Wiki author Frank Long contributed to this report.