Dow Jones Futures Rise: 5 Stocks Near Buy Points In Market Rally; Tesla FSD Beta Expands Widely

Dow Jones futures were little changed on Friday morning, along with S&P 500 futures and Nasdaq futures, heading into a shortened trading session. Apple, Microsoft and Tesla are in the news.




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The stock market was positive for the second session in a row on Wednesday. According to the minutes of the November meeting, released Wednesday afternoon, federal officials see a slower rate hike coming “soon.”

The Nasdaq led the way back Tesla (TSLA). The major indexes have so far risen steadily in this short holiday week. But a longer break could be constructive for a market rally.

Investors should be cautious about adding exposure given the major technical resistance and significant economic reports.

However, Dexcom (DXCM), United Health (UNH), Neurocrine Biology (NBIX), Medpace Holdings (MEDP) and Shockwave Medical (SWAV) are five healthcare stocks that are showing interesting action.

DXCM and Neurocrine Biosciences are on the IBD Leaderboard, and MEDP is on the Leaderboard Watchlist. NBIX and Medpace are stocks in the IBD 50.

Tesla FSD beta release

Tesla CEO Elon Musk tweeted Thursday that the full self-driving beta is now available to all FSD owners in North America who request it.

This could allow Tesla to recognize deferred revenue from FSD.

Despite its name, Full Self-Driving does not offer full driving, but is a level 2 driver assistance system. The National Highway Traffic Safety Administration is investigating the safety of Autopilot and FSD. The Justice Department is reportedly conducting a criminal investigation into Tesla’s self-driving claims.

Tesla shares rose more than 2% in early trading Friday. Shares rose 7.8% to 183.20 on Wednesday, rebounding from Tuesday’s bear market lows, as Citigroup upgraded the EV giant from sell to hold. TSLA stock is down 19.5% so far this month and looks set to nearly halve in 2022.

Dow Stock Deal News

In Dow Jones stock news, Apple ( AAPL ) is interested in buying a British soccer giant Manchester United (MANU). The Federal Trade Commission could try to ban it Microsoft (MSFT) for purchase Activision Blizzard (ATVI) worth almost 69 billion dollars.

Also, Microsoft may face an EU investigation into its business practices in relation to Slack, Reuters reports.

Separately, Apple’s iPhone shipments may be further delayed due to the ongoing Covid-19 shutdown in China.

Apple shares fell, while Microsoft was little changed. ATVI shares fell 3%. MANU shares rose 11%, extending massive weekly gains.

Dow Jones futures today

Dow Jones futures rose 0.2% against fair value. S&P 500 futures advanced 0.1% and Nasdaq 100 fell 0.2%.

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The 10-year treasury yield increased by 1 basis point and reached 3.72%.

The price of crude oil increased by more than 2%. Copper futures rose more than 1%.

On Thursday, China reported nearly 33,000 Covid cases, including those without symptoms, after more than 31,000 on Wednesday. They rise above the April average during the Shanghai blockade. Covid infections with symptoms are still below April peaks.

Several Chinese cities are under lockdown, including Beijing and Zhengzhou, home to giant iPhone assembly plant Foxconn. But Disney Shanghai started its full operation today.

China cut bank reserve requirements on Thursday. hoping to boost lending and the economy in the wake of Covid.

US stock markets, which were closed on Thursday for the Thanksgiving holiday, will close at 1:00 p.m. ET.

Keep in mind that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next stock market session.


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Stock market rally

The stock market had some wobbles on Wednesday, but broad gains were led by technologists.

Initial jobless claims rose to a three-month high, while continuing claims hit an eight-month high. The S&P Global Purchasing Managers’ Index for U.S. manufacturing and services both declined.

The minutes of the Fed reinforced expectations of a 50-basis rate hike at the December 14 meeting. Markets still support another half-point move in February, but there is a good chance of a quarter-point increase.

In stock market trading on Wednesday, the Dow Jones Industrial Average rose 0.3%. The S&P 500 rose 0.6%, led by shares of TSLA. The Nasdaq Composite rose 1%. The small-cap Russell 2000 rose 0.1%.

The price of US crude oil fell by 3.7% and reached 77.94 dollars per barrel. Natural gas futures rose 7.2%.

The 10-year treasury yield decreased by 5 basis points and reached 3.71%. The two-year Treasury yield, which is mostly linked to the prospect of a Fed rate hike, fell below 4.5%.

The US dollar fell sharply for the second straight session, returning to recent lows.


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ETFs

The iShares Expanded Tech-Software Sector ETF ( IGV ) rose 1.5%. VanEck Semiconductor Vectors ETF ( SMH ) rose 0.9%.

The SPDR S&P Metals & Mining ETF ( XME ) rose 0.3%. US Global Jets ETF (JETS) rose 0.1%. The SPDR S&P Homebuilders ETF ( XHB ) rose 0.5%. The Energy Select SPDR ETF ( XLE ) fell 1.1%. The Healthcare SPDR Fund ( XLV ) rose 0.4%. Dow Jones UNH is the top holding in XLV.

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Reflecting higher speculative holdings, the ARK Innovation ETF ( ARKK ) rose 2.9% and the ARK Genomics ETF ( ARKG ) rose 0.9%. TSLA shares are a large holding in Ark Invest ETFs.


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Stocks to watch

Shares of Dexcom rose 1.7% to 112.92, finding support at its 21-day moving average. Shares of DXCM have stalled this month after missing earnings on Oct. 28. Dexcom shares likely have long potential with a 123.46 buy point from a seven-month consolidation. Investors could buy shares of DXCM on an early break above the 21-day line, perhaps using Tuesday’s high of 113.88 as a specific buy point.

Medpace shares fell 1.3% to 218.81 on Wednesday. Shares plunged 38% on Oct. 25 after earnings near record highs. Since then, MEDP’s stock has built a messy handle on a deep base of annual bowls. While the stock had a lot of intraday swings, MEDP shares are currently on track to form a solid three-week pattern through Friday’s close. Investors can use the November 15 close of 226.57 as an early entry, above much of the recent trade.

NBIX shares fell 1.5% to 118.97. Stocks are consolidating near multi-year highs that were extended from the October lows. Despite falling below the 50-day line last week, Neurocrine stock has a solid three-week pattern that continues for a fourth week. Technically, it has a buy point at 126.09, although investors may want to wait for quieter action.

Shares of Shockwave rose 4.7% to 264.06 on Wednesday, rebounding from its 21-day line but showing resistance at the 50-day line. After a failed breakout at the end of October and a sharp selloff that continued through earnings, SWAV stock has rebounded over the past week. A new base will take more time, but aggressive investors can use a strong 50-day move as an early entry.

Shares of UNH rose 1.3% to 529.71, rising above its 50-day and 21-day lines after breaking short of the 200-day line last week. UnitedHealth shares used to be the long-term IBD leader and still share many of the same characteristics. Investors can use compensation from the 50-day line as an early entry or long-term leader entry. UNH’s stock needs to build a new base after breaking the bowl base with the team last month.

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Market Rally Analysis

The stock market index increased on Tuesday’s gains. The S&P 500 only hit a one-day high on Nov. 15 and closed within 1% of its 200-day line.

The Russell 2000 just reached its 200-day line.

The Nasdaq added to Tuesday’s rebound from its 21-day moving average, although it is still off its short-term high of Nov. 15 and well below its 200-day high.

The Dow Jones was within 20 points of its intraday high on August 16.

The S&P 500 is moving firmly above its 200-day line, which is roughly in line with the annual downtrend — a big test for a market rally.

A flurry of economic data can change expectations for the Fed and therefore the stock market. On Wednesday, November 30, the October JOLTS jobs report will be released, which is when Fed Chairman Jerome Powell will speak. On Thursday, the PCE price index, the Fed’s favorite gauge of inflation, will be released, along with jobless claims and the ISM manufacturing index. The November jobs report is due Friday, November 2.

Ideally, the market would move sideways for a few days, allowing at least a 21-day line to enter those economic reports.


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What to do now

The market rally has shown some good gains this week, with more stocks showing buy signals over the past few days. As a result, investors could add a little more exposure.

But they may be wary of significant new purchases, with the S&P 500 below its 200-day line and so much critical economic action from the Fed expected next week.

Also consider taking partial profits on stocks that will rally quickly. Stocks made short-term gains amid sharp gains and sector volatility.

However, investors should work hard on their investment shopping lists, looking for setups and performing names in various sectors.

Read The Big Picture daily to stay in tune with market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter @IBD_ECarson for stock market updates and more.

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