Dow Jones futures were slightly higher on Friday, along with S&P 500 futures and Nasdaq futures. Lululemon, Costco and Broadcom reported earnings after the close.
Stock market stocks edged up on Thursday, but recovered some of the losses seen in the past few days. Investors should remain vigilant despite market movements. The S&P 500 remains below its 200-day line with most indexes hitting resistance at the 21-day moving average.
Semiconductor stocks fared well, along with chip makers Nvidia (NVDA) among the top performers on the S&P 500 on Thursday. But chip makers are generally in better shape, with KLA Corp. (KLAC), Axcelis Technologies (ACLS) and Ultra Clean Holdings share price (UCTT) flash buy signal Thursday. ASML (ASML) and Tools used (AMAT) is among those close to the acquisition.
Costco Wholesale (COST), Lululemon Athletica (LULU) and Broadcom (AVGO) reported on Thursday evening.
COST stock was little changed overnight after missing Costco prices and sales. Costco stock lost some ground in Thursday’s regular session but is down nearly 11% so far this month.
LULU stock tumbled in extended trading after the yoga apparel retailer led to a slightly lower low for the holiday quarter. Lululemon’s revenue rose slightly in Q3. Lululemon stock rose 0.6% to 374.11 Thursday, closing at a 370.56 cup-with-handle price. But it’s about to fall into that buy zone.
AVGO stock rose sharply in premarket trading as Broadcom’s earnings and guidance improved outlook, with the chip-and-software giant also raising its dividend. Broadcom stock closed up 2.4% at 531.08, below its 200-day line. Last week’s 552.42 level may suggest some kind of entry.
LULU stock is on the IBD Leaderboard for stock exchanges. The KLAC fund is in the IBD Long-Term Leaders.
Dow Jones Futures today
Dow Jones futures rose 0.3% vs. S&P 500 futures rose 0.4% and Nasdaq 100 futures rose 0.45%.
Oil futures rose 1%.
Remember that overnight movements in Dow futures and elsewhere do not necessarily translate into actual trading in the next trading session.
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Stock Market Rally
The stock market had a strong session, with the index moving sideways after the first hour of trading.
The Dow Jones Industrial Average rose 0.55% in market trade on Thursday. The S&P 500 index rose 0.75%. The Nasdaq composite rose 1.1%. The small-cap Russell 2000 advanced 0.7%.
The price of US oil fell 0.8% to $ 71.46 a barrel, with changes in the weather. Crude futures are now at levels that the Biden administration has indicated will result in a replenishment of the Strategic Petroleum Reserve, which has been pumped from long-term lows this year to reduce energy costs.
The 10-year Treasury yield rose 8 basis points to 3.49%, but that was an intraday after collapsing to 3.41% on Wednesday.
Over the past month, the price of the iShares Expanded Tech-Software Sector ETF has changed by +1.8%. VanEck Vectors Semiconductor ETF’s share price changed by +2.55% during the week. Nvidia, ASML, KLA and AMAT stocks are all SMH stocks. Over the past month, the price of the ARK Innovation ETF has changed by -2.4% and the ARK Genomics ETF has changed by -2.2%.
Shares of SPDR S&P Metals & Mining ETF (XME) changed by +0.3% during the week. The US Global Jets ETF’s last stock price is 0.3%. Shares of SPDR S&P Homebuilders ETF changed by +0.66%. Energy Select SPDR ETF (XLE) and Financial Select SPDR ETF (XLF) share prices changed by +0.1% during the week. The Health Care Select Sector SPDR Fund ( XLV ) rose 0.9%.
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Share Chip near Buy Points
Many chip-gear manufacturers are in or near the acquisition zone. In general, semiconductor equipment manufacturers have a bleak outlook for the coming year, but chip-gear stocks are often low well before the company recovers.
KLAC stock rose 2% to 395.92, removing some buying between 392.60-396.02. Trading was very light, but there were several big gains in spiking currency as KLA bounced back from the bear market in October and November. Strength levels are at record highs, even some way off the January peak. KLA stock is a long-term leader, but the time to buy LTL stock is when it is closer to the 200 or 50-day line.
ACLS stock rose 4.9% to 81.93, back above the 80.34 cup price with the handle, according to MarketSmith analysis. Axcelis extended well from the 50-day line, but the 21-day line ran higher. The RS line for ACLS stock is in a 15-year high.
UCTT stock rose 5.6% to 36.59, the price of the cup increased to 36.10-with-hands and reached the best level since April. The base was formed at the bottom, without a previous rise. But the handle was generally formed above the 200-day line. The minimum number of UCTT is 8 months.
ASML stock rose 0.9% to 606.89. Market share increased from October 13th to November 15th. Since then, the Dutch semiconductor giant has successfully strengthened its 200-day line, at its best level since April. The 21 day line is close to being reached. A recent high break may suggest an early entry. Ideally, ASML will retrace to the 21-day line or build a suitable base.
AMAT stock gained 2.4% to 108.61 on Thursday. The shares are slightly above the 200-day line after the Oct. 13-Nov. 15 runs. Applied Materials has a tough three-week pattern, suggesting a buy point of 112.22. Investors can use a short trendline, perhaps at Thursday’s high of 109.43 as a trigger, as a small entry before.
Meanwhile, tech giant Nvidia rallied 6.5% to 171.69, rebounding from a 21-day low. NVDA stock is currently below the 200-day line. Aggressive traders can use a breakdown of the 200-day line as a buy signal. But it might be better to wait for the Nvidia stock to clear the 200 days and create some kind of confirmation, la ASML or AMAT, to detect more secure access.
Market Rally Analysis
The stock market rally pared recent losses with modest gains. But this did not completely change the technical picture. The major indexes are moving sideways, finding support at fundamental levels but also hitting resistance.
The S&P 500 index managed to close above its 21-day moving average. The benchmark index needs to bounce back above its 200-day moving average and the December 1 high.
The Nasdaq composite held support at its 50-day moving average, hitting the 11,000 level but closing at its 21-day low. The Russell 2000, which fell below the 200-day and 21-day lines earlier this week, retreated to the 21-day intraday.
The Dow Jones, which closed above its 21-day moving average on Wednesday, jumped on Thursday.
The market may not act decisively upon the arrival of important news.
Producer prices for November will be released on Friday morning. Wholesale inflation should show a steady decline. But the main concern is the cost of the service. The November CPI report is due on December 13, with the Fed’s year-end meeting the following day.
These events can be the cause of major market ups or downs. Of course, last month there was a lot of activity around the CPI in October, the speech of the head of the Fed Powell and many others, but on the other hand, the turbulent movement continued.
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What to do now
Some stocks had buy signals on Wednesday, including KLAC, ACLS, United Rentals (URI) and Dexcom (DXCM). Investors may be nibbled on some of them – or not.
The overall brightness should remain low. The current market trend is sideways and turbulent. It’s just a tough environment for making advanced trading stocks. If you make a new purchase and get a decent profit, consider taking a quick profit. Too many promising stocks have turned 5%, 10% gains in the last few weeks.
A number of funds from various sectors are being established. So keep it on your watch list and stay in touch.
Read The Big Picture every day to stay in tune with the direction of the market and stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market reforms and more.
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