Dow Jones futures, along with S&P 500 futures, turned lower late Monday amid key coronavirus stimulus talks between President Joe Biden and a group of Republican senators. GME stock plunged 30% amid the ongoing short squeeze. Tesla stock surged on a price-target hike Monday, while Dow Jones leader Apple is again approaching a buy point.
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The stock market recovered from Friday’s sell-off, as the tech-heavy Nasdaq composite surged 2.55%. The S&P 500 rallied 1.6%, while the Dow Jones Industrial Average followed up with a 0.8% gain.
Among the Dow Jones leaders, Apple (AAPL) rallied 1.6%, while Microsoft (MSFT) rose 3.3%. Apple stock remains below its recent buy point, while Microsoft is now just out of buy range.
Tesla (TSLA) recovered from Friday’s 5% sell-off, racing 5.8% higher Monday. Among the Chinese EV leaders, Nio (NIO) fell further below its buy point, while Xpeng Motors (XPEV) remains far from its old highs. Both reported strong January sales. Li Auto (LI) is expected to report January sales in the near future.
Among top stocks in or near buy zones, AdaptHealth (AHCO) broke out past a new buy point and is in buy range, while PayPal (PYPL) continued to rebound from its key 50-day support level. Meanwhile, ServiceNow (NOW) is just under its own buy point.
Apple, Microsoft, PayPal and Tesla are IBD Leaderboard stocks. AdaptHealth was Monday’s IBD Stock Of The Day, while ServiceNow was featured in this week’s Stocks Near A Buy Zone.
Dow Jones Futures Today: Biden Stimulus Talks
After the close Monday, Dow Jones futures and S&P 500 futures slipped 0.1% each vs. fair value. Nasdaq 100 futures were slightly higher vs. fair value. Remember that trading in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
At 5 p.m. ET on Monday, President Biden is expected to discuss potential coronavirus stimulus plans with a group of 10 Republican senators at the White House. On Sunday, the group proposed a $618 billion package, far less than Biden’s $1.9 trillion plan. The Republican plan includes new stimulus checks of $1,000 per person, depending on income level.
Among exchange traded funds, Innovator IBD 50 (FFTY) jumped 3.1% Monday. The Nasdaq 100-linked Invesco QQQ Trust ETF (QQQ) traded up 2.5%. Meanwhile, the SPDR S&P 500 ETF (SPY) rallied 1.6%.
U.S. Stock Market Today Overview | ||||
|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 30212.37 | +229.75 | +0.77 |
| S&P 500 | (0S&P5) | 3773.77 | +59.53 | +1.60 |
| Nasdaq | (0NDQC ) | 13403.39 | +332.69 | +2.55 |
| Russell 2000 | (IWM) | 210.60 | +5.04 | +2.45 |
| IBD 50 | (FFTY) | 44.47 | +1.35 | +3.13 |
Last Update: 4:28 PM ET 2/1/2021 | ||||
Stock Market Pulls Back, Finds Support
Looking back at the current uptrend, November was a key month for the stock market. IBD’s The Big Picture flagged the new uptrend following the market’s bullish follow-through day on Nov. 4. Meanwhile, the start of February has the Dow Jones Industrial Average, Nasdaq and S&P 500 trying to find support near key levels during the current pullback.
Friday’s Big Picture commented, “The major stock indexes experienced a sharp sell-off Friday, ending the week on a down note. Top growth stocks were hit hard and the Nasdaq fell through a key support level, resulting in a stock market downgrade.”
Due to the recent weakness, it would be a great time to play some defense. Weakness can snowball, so it’s usually best to get off margin to avoid outsize losses. Meanwhile, you can reduce some exposure by cutting positions that show a loss after recently breaking out.
Focus on stocks that showed strong relative strength during last week’s sell-off. They could be some of the market’s leaders if the indexes are able to rebound.
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Dow Jones Stocks To Buy And Watch: Nike’s New Buy Point
Dow Jones stock Nike is tracing a new flat base with a 148.05 buy point, according to IBD MarketSmith chart analysis. The stock rallied 1.6% Monday.
Shares of the retailer remain below their 50-day moving average line, and about 8% off their 52-week high.
Stocks In Or Near Buy Zones: AdaptHealth, PayPal, ServiceNow
Monday’s IBD Stock Of The Day, AdaptHealth, broke out above a 39.86 buy point in a consolidation base. Shares rallied 4.9% Monday and are in the buy zone that tops out at 41.85.
IBD Leaderboard stock PayPal continues to rebound from its 50-day line, placing the payments leader in a new buy area Monday. The stock rose 3.2% Monday.
According to Leaderboard commentary, “PayPal is trading below a new alternate entry (244.35) and making its first test of the 10-week moving average in 2021.”
ServiceNow is approaching a 566.84 buy point in a flat base, according to IBD MarketSmith chart analysis. Shares rallied 2.9% early Monday.
According to IBD Stock Checkup, NOW stock shows a solid 94 out of a perfect 99 IBD Composite Rating. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths.
GME Stock Short Squeeze
The GME stock short squeeze faltered Monday, as shares plunged nearly 31% to give back a large portion of Friday’s 67% surge. GameStop (GME) stock slipped as much as 23% before paring some losses in extended trade Monday.
Robinhood continues to limit purchases in short-squeeze targets, like GameStop and AMC Entertainment (AMC). Robinhood customers could only buy one share of GameStop early in the short squeeze, and five options contracts. However, Robinhood raised that to 20 shares on Monday, CNBC reported.
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Chinese EV Leaders: Li Auto, Nio, Xpeng Motors
Li Auto is expected to announce its January sales in the coming days. Li Auto stock is trading below its 50-day line, about 33% off its 52-week high.
Early Monday, Nio and Xpeng Motors reported strong January sales numbers.
In January, Nio grew sales 352% to 7,225 electric vehicles. Nio stock reversed from early gains to edge lower Monday. Shares are below their 57.30 buy point in a cup base.
Meanwhile, Xpeng Motors grew sales 470% to 6,015 electric vehicles. Xpeng stock rallied 2.3% Monday.
Tesla Stock Gets Price-Target Hike
IBD Leaderboard stock Tesla snapped a three-day losing streak Monday, racing nearly 6% higher. Ahead of the stock market open, Piper Sandler upped its Tesla stock price target from 515 to 1,200.
The Jan. 8 IBD Stock Of The Day column signaled that Tesla was flashing several signs of a climax top amid a sharply vertical run over the past few weeks. But so far the stock is showing tremendous resilience after hitting record highs last week.
On Jan. 25, Tesla stock hit a record high at 900.40. Shares are about 80% above a 466 buy point in a cup with handle amid Monday’s action.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple moved up 1.6% Monday, but remains below its 138.89 buy point in a cup with handle. Shares gave up the entry during last week’s sharp weakness.
Meanwhile, Microsoft rallied over 3.3% Monday, recovering the entirety of Friday’s 2.9% decline.
Shares of the software giant broke out past a 228.22 buy point in recent sessions. The stock is just out of the 5% buy zone that goes up to 239.63.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones futures.
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