Dow Jones futures will open on Sunday evening, along with S&P 500 futures and Nasdaq futures, with Twitter stock in focus as Elon Musk moved to end his takeover. The stock market rally was strong with the Nasdaq leading major indexes higher, while quality stocks flashed more buy signals.
The Nasdaq closed this week at its 50-day line and 10-week moving average, which it has struggled with multiple times this year. While clearing these key levels would represent a positive move, there are still many obstacles to market rallies, such as technical resistance or the start earnings season. A sell-off at current levels would be a bearish sign.
Elon Musk wants to terminate the Twitter deal
Tesla CEO Elon Musso was informed late Friday Twitter (TWTRMusk stated that he wants to end the $44 billion, $54.20-per-share deal. Musk’s lawyers claimed that Twitter had “not adhered to its contractual obligations.”
Twitter’s board declared that they are confident in the deal. They intend to close it. It plans to fight in court to make Musk honor the signed deal. It is possible that there will be lengthy litigation.
This is a significant turnaround from April when Musk delayedly disclosed a large “passive” TWTR stock share and moved quickly on a takeover agreement. He claimed he could greatly expand growth and encourage free speech.
Twitter stock fell 5% on Friday, marking the lowest level since mid-March. After a Washington Post article about the difficulties with the deal, shares plunged 5.1% to 36.81.
Extended trade saw a modest increase in TSLA stock.
Musk’s withdrawal from Tesla could be a good thing for Trump’s failing Truth Social. Digital World Acquisition Corp. (DWACThe stock of, Truth Social’s SPAC merger partner, surged 29% on Friday night.
Stocks Making Bullish Moves
McKesson (MCK), UnitedHealth (UNH), Centene (CNC), Lantheus (LNTH), Northrop Grumman (NOC), Alibaba (BABA), SolarEdge Technologies (SEDG), Fortinet (FTNT) and Tesla (TSLAThere are nine stocks that are in or near the buy zone. They range from traditional breakouts to early points of purchase to aggressive entries.
Northrop, UnitedHealth & LNTH stock can be found on IBD Leaderboard. Centene and McKesson can be found on SwingTrader. FTNT stock is available IBD Long-Term Leaders. UNH stock is available IBD 50. MCK stock, Fortinet are available on the IBD Big Cap 20. McKesson was Friday IBD Stock of the Day.
The embedded video discussed the state market and looked at three stocks that have made bullish moves: McKesson and Lantheus.
Dow Jones Futures Today
Dow Jones futures will open at 6:05 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Stock Market Rally
Stock market rallies rebounded in the last week with solid to substantial gains on the indexes.
The Dow Jones Industrial Average gained 0.8% last week Stock market trading. The S&P 500 index advanced 1.9%. The composite Nasdaq index jumped 4.6%. Russell 2000, a small-cap stock, gained 2.4%
After dropping to 2.75% in the intraday on Wednesday, 13 basis points were added to the 10-year Treasury yield to 3.1%. After having been above the 10-year rate for some days, the 2-year yield rose to 3.1%.
U.S. crude oil prices fell more than 33% over the past week, to $104.79 per barrel. However, they dropped well below $100 on Wednesday.
Although Friday’s June jobs report was better than expected, employment is a weak indicator. According to the Atlanta Fed’s GDP forecast tool, there will be a 1.2% annualized drop in GDP for the second quarter compared to last week’s -2.1%.
CME’s FedWatch tool still expects a 75 basis-point rate hike in October and 50 basis point increases in September. It sees a half point move for the November meeting as possible, which is a departure from the expectations of a quarter point move in the last few days.
Wednesday’s June consumer price Index could be a catalyst for markets and further-reaching Fed rate forecasts. But, July’s massive 75 basis points seem locked in.
There are many to choose from. Best ETFsThe Innovator IBD 50 ETF is also available.FFTY) climbed 1.6% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) advanced 1.5%. The iShares Expanded Technology-Software Sector ETF (IGV) popped 4.4%, with FTNT stock part of the ETF. VanEck Vectors Semiconductor ETFSMH6.45%
SPDR S&P Metals & Mining ETF (XME) slid 1.5%, extending a weekly losing streak. The Global X U.S. Infrastructure Development ETF is (PAVE) rose 0.7%. U.S. U.S.JETS) maintained altitude, closing flat. SPDR S&P Homebuilders ETF (XHBThe ) gained 3.2%. The Energy Select SPDR ETF (XLE) slumped 2.25% and the Financial Select SPDR ETF (XLF) edged up 0.6%. SPDR Fund Health Care Select Sector SPDR FundXLV) climbed 0.8%, with UNH stock a major holding.
ARK Innovation ETF (ARK Innovation ETF) is a reflection of more-speculative stock stories.ARKK) jumped 13.7% last week, vaulting back above its 50-day line. ARK Genomics ETFARKG) surged 14.4%, vaulting from the 50-day line. Ark Invest’s ETFs include Tesla stock as a significant holding.
Stocks In Buy Zones
McKesson stock rose 3.1% Friday to 331.26, flashing several early buy signals. Shares rose from their 50-day low, breaking a downward-sloping trendline and clearing short-term resistance at 331.16. MCK stock has a Flat baseAccording to, 340.04 Buy Point Analysis of the market. The Line of relative strengthIn recent days,, the blue line shown in the charts, has hit new highs.
UnitedHealth stock gained 0.8% Friday to 518.63 Intraday, Dow Jones giant reached 528.37, surpassing a 518.80 handle Purchase pointIt could have been either a cup- or double-bottomed base but it ended just below the entry. UNH stock performed a mini-shakeout on Tuesday to test its 50-day line intraday. Centene is one of the positive signs that several health insurance companies are near or in buy zones. UnitedHealth earnings are due Friday, August 15.
Centene stock increased 3.2% to $88.01 on Friday. This was above the 87.44 level. double-bottomBuy point. CNC stock also tested its 50 day line on Tuesday, just like UnitedHealth. The RS line is at a new record high for Centene. Centene earnings will not be available until July 26, but UnitedHealth reports could impact CNC stock on Friday.
The stock of Lantheus rose 7.4% to 67.79 on Friday. It rebounded above its 50-day mark, breaking a trendline, and reaching a new short-term high. LNTH stock consolidates after a massive run from late February through early June. However, it still needs to establish a solid base for the next week.
Northrop stock fell 1.2% last week to 480.43 after it rebounded into buy range the week before. However, the stock recovered from Tuesday’s 50 day line test. NOC stock can be acted from the 50-day level and an old 477.36 buy price. Northrop stock now boasts a new Flat baseWith a 492.40 Buy Point
Alibaba stock broke above its 200-day mark and broke from a bottoming base that had resistance just above 121. BABA stock gained 4.2% to 120.90 for the week. However, it fell 1.2% to close below these key levels on Friday. BABA stock rose 4.2% to 120.90 on Thursday. However, the ideal bottoming base will be above or largely over the 200-day mark, but other stocks are showing similar patterns. Many Chinese internet stocks are showing improved action.
SolarEdge stock gained 6.75% last week to 295.11, rebounding on Tuesday from the 50-day level and recovering the 200-day line Friday. SEDG stock currently has a 314.62 purchase point. Cup-with handle base. However, it trades right on the trendline at the top of either the handle or the three month base.
This week, Fortinet stock rose 9.3% to 62.70. It regained its 50-day lines and finished just above its 200 day line. This is a great opportunity to buy FTNT stock, whether you are looking for an early entry or a long-term leader. Volume was very low this week. The stock of Fortinet is still well below its peak but the RS line has reached a new high which few software players can match.
Tesla stock surged 10.3% in the last week to 752.9. This is back above its 50-day mark for the first time since May. TSLA stock did not undercut its May lows, so it could be trying to get back above its 50-day line.
Tesla stock rose 2% on Friday after Musk announced that he is trying to end the Twitter deal. This might have been due to additional TSLA sales and collateral.
Although an aggressive trader may try to buy a position, this would not be an IBD buy. Tesla stock has been on a long journey before it reaches its 200-day mark. All-time highs have been well over that.
Tesla may open its Supercharger networkAccording to a White House memo, the U.S. will soon be in its possession. Tesla earnings are due July 20,
Market Rally Analysis
After rebounding from intraday lows on Tuesday, the stock market rally that was in turmoil a week ago, has bounced back this week. The Nasdaq rose to its 50-day line and its 10-week lines, as well as its June highs.
The 10-week mark has been a strong resistance area for tech-heavy Index.
Friday morning’s major averages fell solidly after a strong job report that drove Treasury yields higher. However, they rallied to close the gap little changed.
The S&P 500, Dow Jones and Russell 2000 have not yet reached the 50-day/10-week line area, but did reclaim their 21-day moving averages.
However, the gains last week were made on a low volume basis, which suggests that big financial institutions haven’t placed big bets yet on this market rally.
A market rally pausing at current levels for a few weeks or days wouldn’t be disastrous. This would create more bases and allow major averages to catch up with leading stocks.
But, there are more stocks that have established buy points of various quality. Four out of the nine stocks are from the medical sector, which accounts for most of these stocks. However, there are some promising sectors.
Financial markets still weigh inflation, recession and Fed rate increase risks. Stocks, bonds, and commodities are susceptible to swings of great proportions.
What to do now?
Although the market rally is still “under pressure”, the major indexes look much better than they did a week ago and are poised to take a significant positive step. Leading stocks are becoming more common and showing good results.
This is all still very tentative. A sharp sell-off, particularly at current levels, could be a bearish sign. A few bad days will turn recent buys into clear loss and the indexes will head toward new lows.
You should build your exposure gradually as the market and positions change. To lock in your gains, you might still make partial profits from winners. Be ready to cut losses quickly.
Your watchlists will be a focus of your efforts this week. You should build a large list and pay attention to some potential buys over the next few days.
Pay attention to earnings season which starts this week. Many companies will issue negative guidance or miss estimates amid high inflation, strong dollar, and slowing growth. Pay attention to the timing of earnings reports and key rivals.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Follow Ed Carson @ @IBD_ECarson for stock market updates and more.
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