September 30, 2023

Fall Dow Jones Futures: Market Rally Backs On Apple; 5 shares in buying areas

Dow Jones futures were little changed early Tuesday along with S&P 500 futures and Nasdaq futures after a modest down session ahead of the stock market rally. Two recent IPOs, Mobileye and Sprinkler, made headlines.




X



Major indices pulled back on Monday, with the Nasdaq and S&P 500 turning negative while AAPL shares fell slightly. But they held onto most of last week’s gains.

Apple (AAPL) rolled back slightly lower following the unveiling of the much-anticipated Vision Pro mixed-reality headset,

Tesla (TSLA), Fortinet (FTNT), DexCom (DXCM), Shopify (Shop Wing stop (WING) are within buying range.

Bitcoin collapsed as the SEC filed charges against Binance, the world’s largest cryptocurrency exchange, and co-founder Changpeng Zhao, alleging securities violations and operating illegally in US COIN stocks and also tumbled Bitcoin miners like Marathon Digital. The SEC has threatened action vs. Coin base (COIN).

IPOs are getting off to a late start

Late Monday, marketing software maker sprayer (CXM) reported better-than-expected earnings and revenue growth in the first quarter. CXM shares rose nearly 4% in late trading. Sprinkler shares, an IPO in 2021, had closed just above a short consolidation that could be seen as a handle for an eight-month consolidation.

In the meantime, Mobile (MBLY) fell 6% in premarket trading signaling a move back below 50 days. The self-driving systems company said it will sell on behalf of 35 million shares Intel (INTC), which spun off Mobileye last year in an IPO. MBLY shares fell 2.7% to 42.37 on Monday. The shares will fall below their 50-day line.

Tesla stock is on IBD Leaderboard, with Wingstop on the Leaderboard watchlist. FTNT shares were added to SwingTrader on Monday and are listed on IBD Long-Term Leaders. WING stock and Fortinet are on the IBD 50. Fortinet was Monday’s IBD stock of the day.

The video embedded in this article discusses Monday’s market action and analyzes FTNT stocks, Samsara (IoT) and Fluence energy (FLNC).

Dow Jones Futures Today

Dow Jones futures lost a fraction of their fair value. S&P 500 futures fell lower and Nasdaq 100 futures rose higher.

The 10-year Treasury yield fell 2 basis points to 3.67%.

Crude oil futures fell more than 2%, now well below the level before Saudi Arabia announced a surprise production cut on Sunday.

Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular trading session.

Apple VisionPro

Apple unveiled the highly anticipated mixed reality headset, the Vision Pro, at its annual Worldwide Developers Conference. The glasses are aimed at gaming, communication and productivity and combine virtual and augmented reality. The $3,499 price tag, higher than speculation at around $3,000, could scare off potential buyers. It will go on sale in early 2024.

Earlier, Apple unveiled some new Mac computers and released updates on the latest operating systems for the iPhone, iPad, Mac, Apple TV, and Apple Watch.

Apple shares closed 0.8% at 179.58 after an intraday high of 184.95 before the unveiling of the Vision Pro.


Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live


Stock market rally

The stock market rally saw generally modest declines on Monday, after the Nasdaq pulled back from solid morning gains.

The Dow Jones Industrial Average fell 0.6% during Monday trading. The S&P 500 index fell 0.2%. The Nasdaq composite fell 0.1%. The small-cap Russell 2000 fell 1.3%.

US crude oil prices rose 0.6% to $72.15 a barrel, well below intraday highs. Saudi Arabia said it would cut production by 1 million barrels per day in July.

The yield on 10-year government bonds remained unchanged at 3.69%.

ETFs

Among growth ETFs, the Innovator IBD 50 ETF (FFTY) was up 0.85%. The iShares Expanded Tech-Software Sector ETF (IGV) climbed 0.7%, with FTNT shares an IGV stake. The VanEck Vectors Semiconductor ETF (SMH) fell 1.25%.

Reflecting more speculative story stocks, ARK Innovation ETF (ARKK) rose 1.1% and ARK Genomics ETF (ARKG) gained 0.75%. Tesla stock is the No. 1 position in Ark Invest’s ETFs. COIN Stocks and Shopify are also top 10 positions for Cathie Wood’s Ark ETFs.

SPDR S&P Metals & Mining ETF (XME) fell 0.8%. The US Global Jets ETF (JETS) fell 0.2%. SPDR S&P Homebuilders ETF (XHB) fell nearly 1%. The Energy Select SPDR ETF (XLE) lost 0.7% and the Health Care Select Sector SPDR Fund (XLV) rose 0.4%.

The Financial Select SPDR ETF (XLF) fell 0.5%. The SPDR S&P Regional Banking ETF (KRE) fell 2.5%.


Five best Chinese stocks to watch right now


Stocks in buying areas

Shares of Tesla rose 1.7% to 217.61 on Monday after reaching a 2023 high of 221.29 intraday. Shares are still within range of a buy point of 207.79, but are at the top end of the 5% chase zone. Tesla shares broke Friday from what is either a cup or a false bottom. The EV giant has achieved above-average volume for six consecutive sessions.

FTNT shares rose 4.6% to 71.27, recovering a buy point of 69.07 from a V-shaped flat base, according to MarketSmith’s analysis. The volume was heavy. Fortinet originally broke out on May 19, but soon turned lower to test the 50-day line before recovering.

DXCM shares rose 1.7% to 124.66 on Monday, also reaching the flat-base buy point of 126.44 intraday. Equities retook the 50-day line late last week and broke a short trendline. Dexcom stock topped near-term on Monday.

SHOP shares rose 2.8% to 59.92, recovering from the 21-day line. That offers early access, although Shopify stock has been teasing aggressive buying points several times in recent weeks to fizzle quickly. Equities are working on a possible basis after a significant earnings gap in early May.

WING shares rose 3%% to 203.69, recovering from the 50-day and 10-week lines, just above a previous consolidation. Stocks also retook their 21-day line and broke a downtrend line. Volume was light but not terrible. Investors could use Monday’s move as a buy signal. Wingstop stock is on track to have a flat base by the end of the week, part of a base-on-base pattern.

Analysis of the market rally

The stock market rally slipped Monday, but appeared normal after last week’s big gains. The Nasdaq initially led, but turned red as Apple stock moved lower. So did the S&P 500.

The Dow Jones retreated modestly, but is still above the 50-day mark.

The Russell 2000 fell sharply to close just below the 200-day mark. That is a reflection of weak latitude. After the winners dominated late last week, the losers won easily on Monday.

The Nasdaq 100 rose 0.1%, outside of session highs. It’s still 9.3% above the 50-day mark.

The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) also rose 0.1%.

The Invesco S&P 500 Equal Weight ETF (RSP) fell 0.3%, but is still above the 50-day line and 200-day line. It will be important to maintain that level and eventually make the journey to the 2023 highs.

The market rally was led by tech titans and AI stocks, including many chip plays. While some continued to climb on Monday, Apple’s stock reversal and recent chip pullback isn’t entirely unwelcome.

While market breadth was negative on Monday, some sectors showed or pointed to strength.

So is cybersecurity, with FTNT stock just one of many top performers. Several restaurant names, including WING stock, are still on the map. Medical products and systems play like DXCM stocks are at or near entrances. Homebuilders and to a lesser extent travel stocks are doing well.


Time the market with IBD’s ETF market strategy


What to do now

After last week’s bullish, broad market rally, investors should try to gradually add more exposure.

Several stocks flashed buy signals on Monday, though it wasn’t a flood given Monday’s slightly lower action.

Don’t force your way into heavy exposure. Let yourself be carried away by the market rally. If the market is steadily improving and top stocks are showing flashy buy signals, you can add to your portfolio over time. If the market starts to falter, you want to keep an eye on the exit.

Have your watchlists ready. Finding emerging leaders and recognizing early participants is key.

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.

YOU MAY ALSO LIKE:

Why this IBD tool simplifies your search for top stocks

Do you want to make a quick profit and avoid big losses? Try Swing Trader

Best growth stocks to buy and watch

IBD Digital: Unlock IBD’s premium stock lists, tools and analytics today

Tesla vs. BYD: EV Giants vying for the crown, but which is the better buy?

Cybersecurity giant joins S&P 500 Index

Leave a Reply

Your email address will not be published. Required fields are marked *