Dow Jones futures edged higher Sunday night, along with S&P 500 futures and Nasdaq futures. The major indexes and leading stocks had a negative week as the hawkish Federal Reserve and soaring Treasury yields took their toll. Stock market recovery is “under pressure.”
Tesla stock had a negative outside reversal week. But now it’s got a handle on the weekly charts after a massive rise. While, Apple (AAPL) has drifted lower, giving a bit more to its handle while still trading tight. While Tesla (TSLA) and Apple stock is doing relatively well, most growth stocks are not.
In healthy areas of the market, Callon Petroleum (CPE) is trading closely on the weekly chart despite its “hedgehog” reputation. General dynamics (GD) is also closely trading because it creates a flat base. Molina Health (BYT) has been trading closely in a buy zone, while also finding key support over the past week.
Investors should be cautious with new purchases during the current market week.
The video embedded in this article discusses the mixed market action and stock analysis of Callon Petroleum, General Dynamics, and MOH.
Dow Jones Futures Today
Dow Jones futures contracts are up a fraction of their fair value. S&P 500 futures rose 0.1%. Nasdaq 100 futures rose 0.2%.
Rally stock market
The stock market rallied last week as Nasdaq and the small-cap Russell 2000 fell below their 50-day moving averages.
The Dow Jones Industrial Average fell 0.3% last week stock market trading, albeit with modest gains over the weekend. The S&P 500 index fell 1.3%. The Nasdaq composite fell 3.9%. Russell 2000 fell 4.6%.
The 10-year Treasury yield jumped 34 basis points last week to 2.71%, hitting a three-year high, as the Federal Reserve signaled it would soon trim its balance sheet. huge in addition to a sharp increase in interest rates. The Treasury yield curve was no longer inverted as the two-year yield rose slightly to 2.52%.
US crude oil futures fell 1.2% last week to $98.26 a barrel.
Among the Best ETFsThe Innovator IBD 50 ETF (FFTY) fell 6.15% last week, while the Innovator IBD Breakthrough Opportunity ETF (BOUT) dropped almost 2%. iShares Extension Software-Technology Sector ETF (IGV) back 4.3%. VanEck Vectors Semiconductor ETF (SMH) fell sharply by 7%.
SPDR S&P Metals & Mining ETF (XME) 1.7% last week. The United States X Global Infrastructure Development Fund (SAVE) back 3.8%. US Global Jets ETF (JETS) gradually decreased by 7.3%. SPDR S&P Homebuilders ETF (XHB) decreased by 3.5%, extending the series of decreasing days. The Energy Select SPDR ETF (XLE) rose 3.2% and the financial SPDR ETF (XLF) embedded 0.9%. SPDR Fund for the Healthcare Sector (XLV) increased by 3.7%.
Apple stock fell 2.5% to 169.98 last week, closing just below the 21-day line and slightly above its 50-day and 10-week averages. That gives a little more depth to its handlebar buy point of 179.71. The relative strength line down slightly, but still near record highs. Reports of weaker consumer electronics demand have hit chipmakers, including iPhone suppliers, but Apple’s stock itself has outperformed. The App Store and other services revenue help insulate the tech giant from changing hardware demand.
Tesla stock jumped Monday on record Q1 deliveries and hit a three-month high of 1,152.87 on Tuesday, essentially hitting resistance at a trendline entry. . TSLA stock then reversed course on Tuesday and ended down 5.4% to 1,025.82 for the week, with highs and lows far outpacing last week’s lows. A negative external reversal is bearish, but could be positive for Tesla stock charts, by presenting a real pullback after a major drop in just a few weeks. On the weekly chart, Tesla stock is available cup with handle buy point 1,152.97, follow MarketSmith . Analysis. That handle needs another day to appear on the daily chart.
Arguably, Tesla stock could use a slightly longer and deeper grip. A dip below the 21-day moving average and the 1,000 level could put some of the weaker holders out. More time will also help the 10-week line catch up with TSLA stock.
Remember that Tesla stock is an exogenous factor. Few stocks with triple-digit price-to-earnings ratios are doing well. Can Tesla continue to buck the trend or is last week’s reversal the start of a larger sell-off? When you consider that second scenario as a possibility, you can see how a move below 1,000 could put some investors off.
In the news, Tesla Austin held a “Cyber Rodeo” on Thursday night as Model Y deliveries were underway. Tesla Berlin begins limited deliveries in March. The plants will eventually provide a significant boost to Tesla’s production capacity, but output growth is likely to slow.
Meanwhile, the Tesla Shanghai factory has been closed since March 28, due to the city being closed amid a spike in Covid cases there. It is unclear when the factory may reopen. Even if the site is allowed to reopen, the outbreak and Covid restrictions may affect suppliers.
On Monday, the China Association of Automobile Manufacturers will release industry data on March EVs and overall auto sales. That would include Tesla’s wholesale sales. That should show little impact from the Shanghai lockdown.
The CPE stock chart has a well-deserved reputation as a “hedgehog”, with lots of morning spikes fading or turning negative. Callon stock also didn’t have a big rally like many other energy games. But there are some positive signs. The stock has moved from finding support at the 200-day level to the 50-day line and now the 21-day line.
Meanwhile, despite major intraday swings, CPE stock fell 0.8% last week to 61.94. Now it has formed a three tight weeks, providing an entry 66.48. That tight pattern is almost entirely within 5 months of consolidation, so investors can still use 65.55 as an impact point of purchase.
General Dynamics Stock
Shares of General Dynamics have been consolidating again after breaking out with other defense contractors when Russia’s invasion of Ukraine began in late February. Stocks currently have a flat base on the weekly chart with 255.09 buy points. GD stock has also rallied for a tight three weeks in that flat. Investors can use that tight entry of 246.23, just above Friday’s high, as an early buy point on most of the recent trading in General Dynamics stock.
Molina Health Stock
Molina stock tested its 10-week line last week, then rebounded, closing down 0.6% at 337.82. Health Ministry shares have now been tight for 4 weeks, offering a buy level of 347.72. That tight pattern has formed almost entirely within the buy zone of the previous cup-with-handle stand. Investors can use tight entry as an additional purchase or to initiate a new position.
Market aggregation analysis
Over the past week, the stock market has turned negative over the past week, with growth, small caps and mid-caps selling off. The uptrend has been “pressured” since Wednesday.
The Dow Jones Industrial Average fell slightly for the week, holding support at the 50-day line, just below the 200-day line. The S&P 500 fell just below the 200-day line but held above the 50-day line. The Nasdaq Composite Index fell sharply, closing the week below the 50-day line, joining the Russell 2000 and S&P MidCap 400.
Just two weeks ago, the market rally was widely seen, with strength across multiple sectors and with bulls easily beating bears. But the rally is starting to look narrow and bifurcated, heading back to 2021’s tough environment.
Energy and other commodities stocks continued to lead, along with medicines, discounters and defense companies, while REITs and insurers were doing well. But growth, retail, housing, tourism and traditional banks are struggling.
That’s not surprising, with rising rates weighing on growth stocks and housing developments, while hot inflation is starting to weigh on discretionary spending.
Next week, the Labor Department will publish the consumer price index and producer price index. Inflation is set to heat up, but markets could cheer any sign that price gains are faltering. The latest retail sales report will show whether shoppers are tightening their coins amid high inflation.
Next weekend, China will release first-quarter GDP data and March reports on retail sales and industrial production. But that won’t provide much insight into the impact of the Covid lockdown in Shanghai, which began on March 28.
Earnings season will kick in, with UnitedHealth scheduled for April 14 and Tesla for April 20. That could be a catalyst for individual stocks or sectors or the broader market. , up or down.
So while the market rally is at an inflection point, it may not break out definitively higher or lower for a while.
What to do now
The divisive protests are complicated. Even if you only play strong industries, the market can quickly turn against them quickly, or weakness becomes widespread. So, avoid being too focused on one particular area, while keeping your overall visibility modest.
With volatile market conditions and changing prospects, investors should stay engaged and ready to act. Resist the temptation to make a bunch of new purchases. Focus on building your watch list to find the leaders in the market’s next sustainable uptrend.
Read Big picture every day to stay in sync with market trends and top stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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