Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. The stock market rally lost ground last week, but found support at key levels.
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But the ultimate test for investors: Are you making money in the current stock market rally?
Apple stock, Facebook (FB), Nvidia (NVDA), DocuSign (DOCU) and Snap (SNAP) are all near buy points
Apple (AAPL), Nvidia and Snap stock are on IBD Leaderboard. Nvidia stock is on SwingTrader. Nvidia and Snap stock are on the IBD 50.
The video embedded in this article highlights Facebook stock, DocuSign stock and Goldman Sachs, as well as providing market rally analysis.
Dow Jones Futures Today
Dow Jones futures begin trading at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
Coronavirus News
Coronavirus cases worldwide reached 211.48 million. Covid-19 deaths topped 4.42 million.
Coronavirus cases in the U.S. have hit 38.38 million, with deaths above 644,000.
The FDA is ready to give full approval to the Pfizer (PFE) and BioNTech (BNTX) coronavirus vaccine as soon as Monday.
Stock Market Rally
The stock market rally rose solidly Friday, paring weekly losses and ending near the best levels of the week.
The Dow Jones Industrial Average sank 1.1% in last week’s stock market trading. The S&P 500 index fell 0.6%. The Nasdaq composite declined 0.7%. The small-cap Russell 2000 retreated 2.6%.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) retreated 1.1% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) slumped 2.4%. The iShares Expanded Tech-Software Sector ETF (IGV) closed just above break-even, with Microsoft (MSFT) and Adobe (ADBE) key contributors. The VanEck Vectors Semiconductor ETF (SMH) sank 2.3%.
SPDR S&P Metals & Mining ETF (XME) plunged 9.3% and Global X U.S. Infrastructure Development ETF (PAVE) fell 2.9%. U.S. Global Jets ETF (JETS) skidded 5.1%. SPDR S&P Homebuilders ETF (XHB) gave up 1.9%. The Energy Select SPDR ETF (XLE) plunged 7.1% and the Financial Select SPDR ETF (XLF) 2.3%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) fell 3.6% and ARK Genomics ETF (ARKG) 3.1%, despite Friday bounces.
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Facebook Stock
FB stock fell 1.05% to 159.37 last week, but rebounded late in the week from its 50-day line. You could buy Facebook stock off of that, but it’s already tested the 50-day/10-week line a couple of times recently. Perhaps a trend line break or the Aug. 16 high of 366.95 would be a better trigger. FB stock also is four weeks into a possible flat base.
Apple Stock
Apple stock cleared a short consolidation this past week with a 150.10 buy point, but soon pulled back modestly to its 21-day line. A move above Tuesday’s all-time high of 151.68 would be a new buy signal. Apple nudged down 0.6% to 148.19 for the week, but well off Thursday’s lows.
Nvidia Stock
After strong earnings and guidance late Wednesday, Nvidia stock cleared an early entry of 197.70 on Thursday, breaking a downtrend in a handle. That offered an early entry. On Friday, shares rose 5.1% to 208.16, breaking out past the cup-with-handle official buy point of 207.43.
DocuSign Stock
DOCU stock, like a lot of software and growth names, had multiple head-fakes after reaching its official buy point of 290.33. For those who bought it off an early entry of 236.21 or even lower, DocuSign stock has been an easy hold. Last week, DOCU stock fell below its 21-day line and to its 50-day, where it held support, but didn’t rebound on Friday with the market. DOCU stock fell 3.4% for the week to 286, ending just below the 50-day line. A solid move above the 50-day line would also push shares above the 290.33 buy point, the 21-day line and a trend line. But watch out for those head-fakes!
Also, if DOCU stock falls below recent lows, longer-term investors may want to consider exiting the position.
Snap Stock
The Snapchat parent blasted out of a base on July 23 following blowout earnings. SNAP stock paused right around or above the consolidation high of 73.59. In early August, shares flashed another entry, moving up to 80.85 on Aug. 10 before reversing lower. SNAP stock fell back last week, but rebounded from the 10-week line. Shares sank 2.55% to 72.72 for the week.
A nice rally would push Snapchat stock back above the old consolidation buy point of 73.69 as well as breaking a short downtrend.
Market Rally Analysis
The stock market rally had solid, broad gains Friday, though the below-average volume was not impressive. The Dow Jones and S&P 500 continued their bounce from the 50-day line and back above their 21-day. The Nasdaq composite reclaimed its 50-day line and 21-day. The Russell 2000 is back above its 200-day line.
This is where you’d like to see the indexes hold support. A few more weeks of sideways action for the market rally would let more bases form for the likes of Facebook stock and others, but nobody will be upset if the indexes march to new highs in the coming days.
Winners trumped losers Friday, but the Nasdaq advance/decline line is still right at 2021 lows.
Nvidia stock is leading a handful of chip names coming on. Tech titans such as Microsoft are doing well.
The number of actionable stocks is rather thin. But a little more market strength could flash buy signals for Snap stock, but also DocuSign and Square (SQ). More broadly, several sectors aren’t far from taking a leading role.
Steelmakers and financials have pulled back, but aren’t finished. Housing-related stocks could soon set up again. Many discounters are around buy zones. Shipping firms are coming back.
Then again, a couple of bad days could inflict significant damage to these stocks.
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Are Your Stocks Working In The Market Rally?
Charles Harris, portfolio manager at O’Neil Capital Management, returned to IBD Live on Friday, making a good case for being bullish. Most of all, he noted that not many other people are bullish.
But the real question is how are your stocks doing?
If you’re not making money, take a look at your portfolio. You may have to make changes. But a lot of it has to do with the market. Remember without the M in CAN SLIM, it’s CAN SLI. You may think you’re sly, but picking the “right stocks” won’t work in a bad market.
The market rally had solid, broad gains Friday, so it’s likely your portfolio got a boost. But it’s been a tough few weeks. The Nasdaq and growth stocks have come off highs while market breadth has been terrible.
If you’re in the right names, then you could have been gaining recently. But sector rotation and leading stocks’ head-fakes have made it hard for even skilled stock pickers to do well.
Of course, we’re still in a confirmed stock market rally. Friday’s action alone created several buying opportunities, with a number of others setting up. One reason to take profits and cut losses quickly in this tricky market is to have capital ready when new bullish stock and market signals flash.
Are we at a new short-term bullish turning point? Whether it is or isn’t, you want to be ready. Go through your screens and revamp your watchlists. Hone in on superior stocks setting up potential entries.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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