by Dow Jones futures fell slightly Sunday night, along with S&P 500 futures and Nasdaq futures. Last week’s stock market rally showed resilience, offsetting modest weekly losses even as government bond yields soared. But Friday’s rebound was largely fizzling as the Nasdaq faces resistance.
X
nvidia stock, Visa (V), Chipotle Mexican Grill (CMG), Salesforce. com (CRM), Tempur Sealy (TPX), living (LTHM), Arista Networks (A NET), SLB (SLB), Flowserve (FLS) and Marriott International (M.A.R.).
Visa stocks and Marriott are in traditional buy zones, while Chipotle and FLS stocks are close by. SLB stocks are usable from an early entry while Nvidia (NVDA), CRM Stocks, Tempur Sealy, Arista Networks and Livent are close by.
Nvidia and software makers Salesforce and Dynatrace are riding the AI wave, along with many other tech stocks.
Nvidia is on the IBD Leaderboard, while CMG stock is on the Leaderboard watch list. DT shares are listed on SwingTrader. LTHM Stocks and Salesforce.com are on the IBD 50 list. Salesforce was the IBD stock of the day on Friday.
The video embedded in the article discussed the weekly action of the market rally and analyzed the shares of Salesforce, Tempur Sealy and SLB.
Dow Jones Futures Today
Dow Jones futures fell 0.1% from fair value. S&P 500 futures lost 0.2%. Nasdaq 100 futures fell 0.3%.
The 10-year Treasury rose slightly to 4.08%.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular trading session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
Stock market rally
The stock market rally retreated in a short holiday week.
The Dow Jones Industrial Average fell 2% in stock market trading last week, dropping below the 21-day line and approaching the 50-day line. The S&P 500 index fell 1.2% to just below the 10-day line. The Nasdaq composite fell 0.9% and held the 10-day hold. The small-cap Russell 2000 fell 1.3%, but Friday’s 1.2% gain brought it back above the 21-day mark.
The Invesco S&P 500 Equal Weight ETF (RSP) lost just 0.75%. The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) lost 1.3%.
The 10-year Treasury yield rose 23 basis points to 4.05%, matching the 2023 high of 4.09% intraday. Two-year Treasury yields, more closely tied to Fed policy, rose 5 basis points to 4.93%, but fell from Thursday’s 16-year high of 5.12%.
US crude oil futures rose 4.6% during the week to $73.86 a barrel. Copper futures rose 0.7%, following a gain of 1.3% on Friday.
The US dollar initially recovered with government bond yields, putting pressure on equities and especially commodities. But the greenback returned lower this week.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) fell 2.7% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) lost 1.75%. The iShares Expanded Tech-Software Sector ETF (IGV) fell 1.8%, with CRM stocks being a major component. The VanEck Vectors Semiconductor ETF (SMH) lost 2.1%, with NVDA stocks leading the pack.
Due to more speculative story stocks, ARK Innovation ETF (ARKK) fell 0.9% last week and ARK Genomics ETF (ARKG) fell 2.8%.
SPDR S&P Metals & Mining ETF (XME) fell 0.6%% last week, but emerged from lows. The Global X US Infrastructure Development ETF (PAVE) lost 1.6%. US Global Jets ETF (JETS) rose 1.2% and was up 6% in the prior week. SPDR S&P Homebuilders ETF (XHB) lost 2.9%. The Energy Select SPDR ETF (XLE) fell 0.5%, with SLB stocks a significant stake. The Health Care Select Sector SPDR Fund (XLV) fell 2.8%. The Industrial Select Sector SPDR Fund (XLI) dropped 1%.
The Financial Select SPDR ETF (XLF) fell 0.4% and met resistance at the 200-day mark. The SPDR S&P Regional Banking ETF (KRE) rose 1.6%.
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Stocks to watch
Shares of Nvidia rose 0.5% to 425.03 last week. The AI leader is on a tight four-week pattern with a buy point of 439.90, but investors could use Friday’s high of 432.14 as an early entry. A longer pullback or sideways action would be ideal, but NVDA stocks may not offer that.
Visa shares hold just above a flat-base buy point of 235.57 and are just 3.2% above the 50-day line. Can Visa and fellow payments giant MasterCard (MA) finally making a real move again? A robust US consumer and travel abroad are tailwinds.
CMG shares attempted to break above a flat-base buy point of 2,139.88, but never closed above it, MarketSmith’s analysis shows. Shares fell 2.9% to 2,077.46 for the week, retreating to the 21-day, 10-week line. A bullish move from those levels or a traditional breakout are possible entries.
CRM shares are trading solidly on the 21-day and 10-week lines, within a flat base with a buy point of 225. A move above Wednesday’s high of 214.62 would allow early entry.
TPX shares rose 0.9% to 40.43, including Friday’s gain of nearly 3% in above-average volume. The mattress giant is operating on the right side of a five-month consolidation with a buy point of 44.28. It sits right on resistance around 41.50-41.62. Clearing would provide early access to Tempur Sealy stock.
LTHM shares rose 1.7% to 27.40 on Friday, just below an entry of 27.75. Investors might view 27.75 as a high handle for a low. Other lithium games have bounced back since then Tesla (TSLA) and several other EV manufacturers reported strong second-quarter deliveries in recent days.
ANET shares are starting to rebound and find support at the 21-day line. It is close to a trendline break, with 164.20 as another possible entry. The networking giant has a new base with a buy point of 178.36. Keep in mind that Arista shares have a few weeks of large-scale selling in the new consolidation.
SLB shares jumped 8.6% to 53.35 on Friday in the heaviest volume of the year, shooting above the 200-day line and breaking a trendline stretching back to January. Investors could still buy the oilfield services giant formerly known as Schlumberger, although it is slightly extended from the 200-day mark. SLB earnings are due July 21.
Flowserve shares rose 1.9% to 36.96 on Friday, rising from the 21-day line. FLS stock has a buy point of 37.56 cups with handle. Flowserve has struggled since 2014. But earnings are recovering, with strong growth through 2024. Industrial companies are currently market leaders and Flowserve’s end markets are doing well.
Marriott shares rose 1.1% to 185.66 for the week. Friday’s 2% gain in slightly above average volume pushed MAR stock back above a buy point of 183.27 and not far from its April 2022 all-time high.
Analysis of the market rally
The market rally has moved sideways for the past three weeks, which has been constructive, causing stocks to pull back into key support or forge handles and bases.
Not many stocks flashed buy signals and made those moves stick over the past week. But a host of leading stocks from various groups are setting up, including Nvidia, Salesforce, Flowserve, and more. Chips, software and megacaps look strong, but housing, industry, travel and even some energy are at play. So is EVs and automakers in general, although few are in position.
The bulls want to run, which is a good thing, but are met with resistance. The Nasdaq is 5.4% above its 50-day line and the Nasdaq 100 is up 6%. Those aren’t extensive, but aren’t far from being that. Ideally, the Nasdaq would move sideways or slightly sideways
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What to do now
Investors should pay close attention and build their watchlists. You can look to add some lighting, but do so carefully. A number of stocks made early entries last week only to pull back amid the range-bound market. Many can work fine, but you should not assume that.
You may still want to take partial profits quickly, especially if the Nasdaq hits extreme levels again.
Earnings season kicks off next week Delta Airlines (VALLEY), Aehr test systems (AEHR) and JPMorgan Chase (JPM) leading several banks.
Read The Big Picture every day to stay in sync with market direction and leading stocks and sectors.
Follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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