Dow Jones futures open on Sunday evening, along with S&P 500 futures and Nasdaq futures. The stock market rally attempt gained momentum, with the major averages rising sharply on Friday and over the week.
UnitedHealth (UNH), Shockwave Medical (SVAV), Ulta Beauty (ULTA), enphase energy (ENF), Sociedad Kimica and Minera (sq.m.), Quanta Services (WEU), Northrop Grumman (NOC) – stocks worth watching. They all have relative strength lines at or near the highs.
Shockwave stock rose on Friday, while Ulta and PWR shares may have offered early entries. Shares of UnitedHealth, Northrop, SQM and ENPH are close to buy points.
Also follow Google parent Alphabet (GOOGL) and the electric vehicle giant Tesla (TSLA). Shares of Google and Tesla are far from old highs, but these mega-capitals are rising above key levels after holding above their May lows this month.
NOC shares are on the IBD leaderboard and PWR shares are on the watchlist. GOOGL stock is on the long-term leaderboard of IBD. Shares of UnitedHealth, Ulta Beauty, SQM and ENPH are included in IBD 50. Shares of UNH and Ulta are included in IBD Big Cap 20.
UnitedHealth was named IBD stock of the day on Thursday. SQM was stock of the day on Tuesday.
Dow Jones futures today
Dow Jones futures open at 6:00 pm ET Sunday, along with S&P 500 and Nasdaq 100 futures.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze valuable stocks in the stock market rally in IBD Live.
stock market rally
An attempted stock market rally brought a big weekly gain in a short week, the major indices closed on Friday at their best levels.
The Dow Jones Industrial Average jumped 5.4% in stock trading last week. The S&P 500 added 6.5%. The Nasdaq Composite Index rose 7.5%. Small-cap Russell 2000 shares jumped 6%.
The 10-year Treasury yield fell 11 basis points to 3.12%, up from just above 3% at Thursday’s lows.
U.S. crude oil futures fell 0.3% to $104.27 a barrel last week, rising 3.2% on Friday.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) fell 1.5% last week, with commodities-related stocks weighing on FFTY. The Innovator IBD Breakout Opportunities (BOUT) ETF was up 1.7%. The iShares Advanced Technology & Software (IGV) ETF rose 10.3%. The VanEck Vectors Semiconductor (SMH) ETF rose 5.1%.
The SPDR S&P Metals & Mining ETF (XME) fell 1% last week, despite a big bounce on Friday. The Global X US Infrastructure Development ETF (PAVE) added 3.6%. The US Global Jets ETF (JETS) jumped 5%. The SPDR S&P Homebuilders ETF (XHB) jumped 7.6%. The Energy Select SPDR (XLE) ETF was down 2.6%, while the Financial Select SPDR (XLF) ETF was up 4.6%. The Health Care Select Sector SPDR Fund (XLV) rose 7.8%, led by UNH shares.
Reflecting more speculative stocks, the ARK Innovation ETF (ARKK) climbed 18.25% last week and the ARK Genomics ETF (ARKG) gained 18.1%, both climbing above their 50-day line. Tesla shares remain the top asset among Ark Invest ETFs.
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Promotions near the points of purchase
Shockwave shares rose 6.4% on Friday and 25% on the week to 197.69. This cleared the buy point at 194.41 handle cups, with Friday’s move driven by above-average volume for SWAV stocks. Shockwave Medical has been profitable for the past three quarters, while revenue growth has been triple digits over the past five quarters.
Shares of UnitedHealth jumped 9.6% on the week to 495.64 but pulled back below the 50-day mark on Friday. Shares of UNH have double-bottomed with a buy point of 507.35, which is only slightly above Thursday’s intraday high. Several other promotions by health insurers are being created.
Shares of Ulta Beauty rose 3.7% on Friday and for the week to 410.70. On Friday, the stock retraced its 50-day line. Perhaps this suggested an aggressive entry. ULTA shares have a strange cup-and-handle basis with an official buy point of 429.58.
Shares of ENPH rose 7.4% to 198.39 last week. This is above the recent 193 buy point, which is no longer valid, although investors may see an early entry here. Enphase shares are working on an entry at the 217.33 handle. While solar stocks have been strong in recent weeks, Enphase and its peers tend to have large daily fluctuations.
Shares of SQM fell 1.1% over the week to 89.28 but rose on Friday to regain their 50-day mark. The lithium giant, which also has a significant presence in the fertilizer market, recently surged 27%. But a strong move above the 50-day line, possibly a crossover of the 21-day line, would suggest an aggressive entry. SQM revenue and revenue growth is skyrocketing.
Shares of Quanta Services jumped 10.65% to 125.98, bouncing off the 200-day line and above the 50-day line. This perhaps suggests an aggressive entry into the base of the cup with a handle. According to MarketSmith analysis, PWR’s official buy point is 138.56. Quanta provides infrastructure services to electric utilities.
Northrop shares rose 4.45% last week to 463.70, almost all the way on Friday. This is again above the 50-day line. NOC stock is entering new consolidation after a failed breakout from a cup and handle bottom. The strong move from the 50-day line suggests an early entry. The old buy point 477.36 is no longer valid, but there has been a lot of trading near it over the past four months.
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Tesla shares jumped 13.35% over the week to 735.15, above the 21-day moving average. TSLA shares are slightly below their 50-day line and their early June peak, which are now roughly aligned. The electric vehicle giant has a long way to go to reach its 200-day milestone. But compared to most mega-cap stocks, Tesla stock is showing some glimmers of hope.
Tesla is likely to release production and shipments data for the second quarter later this week.
Google shares are feeling even better, retracing their 50-day line on Friday, close to the early June high. Shares rose 10.1% on the week to 2359.50. Google stock has a long way to go to hit its 200-day milestone. This roughly coincides with the descending trend line from the February 2 peak at 3030.93. This may offer early or long-term entry into the lead.
Market Rally Analysis
The major indexes recovered after heavy losses during most of the month. It was the Nasdaq’s best week since mid-March, while the S&P 500 and Dow had their best week since the last full week in May. Keep in mind that after this bounce at the end of May, the market fluctuated for several sessions before dropping to new lows.
The Nasdaq had a strong move on Thursday, but volume ended up falling slightly. In addition, growth did not stand out much against the backdrop of recent major market movements, while most of the market was struggling.
On Friday, all the major indexes posted significant price gains in a broad, strong advance. Volume, which had been slightly lower on the Nasdaq and NYSE for most of the session, rebounded towards the close thanks to Russell’s annual rebalancing.
The Nasdaq Composite Index jumped above its 21-day moving average on Friday along with the Dow Jones and the S&P 500. Above this resistance, the 50-day line and early June highs emerge.
A decisive break above these levels would be stronger evidence that the recent rally is more than a tradable rally.
High inflation, the Fed’s rate hike and recession fears remain major headwinds for the market.
The medical sector looks to be the strongest. Health insurers and some product makers such as UnitedHealth and Shockwave are showing up after several drug games signaled a buy. China stocks have been rising in recent weeks, but overall they look extended or are still recovering.
Commodity stocks were hit hard despite Friday’s rebound, reflecting recession fears.
Many of last week’s winners have failed in growth
Market Time with IBD ETF Market Strategy
What to do now
As the market rally gains momentum, investors may choose to take a small exposure through either single stocks or broad market ETFs.
There is nothing wrong with waiting until the next day.
Of course, there were several confirmed market rallies in the market in 2022 that quickly turned around. Even after the business day is over, investors should still aim for partial profits and a quick loss reduction.
Work on your watchlists. Focus on stocks that are, or nearly so, but have a broader list of names that show relative strength even if they are out of position.
Read The Big Picture every day to stay up to date on market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson to update the stock market and much more.
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