Dow Jones Futures: Market Rally Resilient; Apple, Tesla, These 5 Chip Stocks Could Use This

Dow Jones futures will open Sunday night, along with S&P 500 and Nasdaq futures. The stock market rally had a generally positive week, with the Nasdaq and small caps leading the way.


But with major indexes at resistance levels after strong recent gains, the market rally has shown resilience amid some mixed headlines.

Berkshire Hathaway (BRKB) earnings are due Saturday morning. Investors are looking to see whether Warren Buffett has added to Apple shares and other core holdings, and whether Berkshire has added to its net equity exposure near the market bottom.

BRKB stock fell 2.8% last week to 292.07, trading between its 200- and 50-day lines. Berkshire’s stock has rebounded from its June lows, but is still a long way from its late March high of 362.10.

Chip stocks are rebounding, a positive sign for any market rally. Monolithic power systems (MPWR), KLA (KLAC), Analog devices (ADI), Axcelis Technologies (AATC) and Onsemi (ON) are running, but are currently in no man’s land, extended from early entries but below traditional buying points.

Apple (AAPL) may still be in range for an early entry, but investors may want to wait to see if AAPL stock can forge a handle.

Tesla stock sold off on Friday, but the electric vehicle giant needs a break. Meanwhile, the California DMV charged You’re here (TSLA) of false advertising in promoting autopilot and fully autonomous driving.

To finish, Celsius (CELH) has been heat checked after huge gains over the past few days and weeks. What should investors do with CELH shares with profits on the line on Tuesday?

The MPWR stock is on IBD Long-Term Leaders. KLAC stock is on the Long-Term Leaders Watch List. CELH, Axcelis Technologies, Onsemi, KLA and Monolithic Power stocks are all on the IBD 50. ADI, Onsemi and Monolithic Power stocks are on the IBD Big Cap 20. The ACLS stock was the IBD stock of the day of Friday. Monolithic Power and ON shares were Stock Of The Day earlier in the week.

The video embedded in this article discusses market action and analysis Vertex Pharmaceuticals (VRTX), EQT (EQT) and ACLS shares.

Dow Jones Futures Today

Dow Jones futures open Sunday at 6 p.m. ET, along with futures on the S&P 500 and Nasdaq 100.

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

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

Stock market rally

The Dow Jones Industrial Average edged down 0.1% in stock trading last week. The S&P 500 index rose 0.4%. The Nasdaq composite jumped 2.15%. The small-cap Russell 2000 rose 1.9%.

The 10-year Treasury yield jumped 20 basis points to 2.84%, including 16 basis points on Friday following the hot jobs report. The likelihood of a 75 basis point Fed rate hike on Sept. 21 rose to two-thirds from around 40% ahead of the jobs data.

U.S. crude oil futures plunged 9.7% on the week to $89.01 a barrel, hitting their lowest level since before Russia invaded Ukraine in late February.

Among the top ETFs, the Innovator IBD 50 ETF (FFTY) rebounded 2.9% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) fell 0.7%. The iShares Expanded Tech-Software Sector ETF (IGV) jumped 3.7%. ETF VanEck Vectors Semiconductor (SMH) gained 2.7%.

The SPDR S&P Metals & Mining ETF (XME) climbed 0.5% last week. The Global X US Infrastructure Development ETF (PAVE) edged up 0.15%. The US Global Jets ETF (JETS) climbed 3.2%. The SPDR S&P Homebuilders ETF (XHB) rose 0.2%, its seventh consecutive weekly gain. ETF Energy Select SPDR (XLE) plunged 6.8% and ETF Financial Select SPDR (XLF) plunged 0.1%. The Health Care Select Sector SPDR Fund (XLV) fell 0.7%, despite strength in biotechnology.

Reflecting more speculative historical stocks, ARK Innovation ETF (ARKK) rose almost 11% last week and ARK Genomics ETF (ARKG) 10.5%. Tesla stock remains a major holding in Ark Invest’s ETFs.

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Chip stocks

Monolithic Power stock jumped nearly 15% to 532.33 last week on strong earnings. Investors might have been able to buy MPWR shares on the Aug. 2 earnings spread as they cleared out other areas of resistance. But as of Friday’s close, Monolithic stock was 17% above its 200-day line and 24% above its 50-day line. The relative strength line is already at a high level, signaling MPWR stock’s outperformance against the S&P 500 index. The stock has a buy point of 580.10 since consolidation dating back to late November. But ideally, the shares would stop and form a handle. This would provide a lower entry and allow the moving averages to catch up a bit.

It’s the same story for Axcelis, Onsemi and KLAC stocks, which have all reported profits over the past two weeks, and are now extended from moving averages but below traditional breakouts. ADI stock is much the same, though Analog Devices earnings are available August 17.

Apple broth

Apple stock rose 1.75% to 165.35, its fifth consecutive weekly gain. Investors could have bought AAPL shares as they crossed the 200-day line on July 29 after earnings. At 3.7% above the 200-day line, there is still room to act as an early entry. The RS line for Apple shares is already at its highest. The official buy point is 13.04, but a handful at current levels or slightly higher would be attractive.

Tesla Stock

Tesla stock fell 6.6% to 864.51 on Friday, down 3% for the week as it erased much of a seven-day winning streak. It also pushed stocks below the 200-day line. But if TSLA stock can pause around current levels for a few days, then breaking above Thursday’s high of 940.82 could offer an aggressive entry. It would be too low for a traditional handle.

At Tesla’s annual meeting on Thursday night, shareholders approved a 3-for-1 stock split, though it’s been months overdue. CEO Elon Musk spoke at length about Tesla’s outlook, but said nothing dramatic. Elon Musk’s ongoing Twitter saga could weigh on TSLA stock.

Legal experts say Twitter (TWTR) has a strong case that Musk should move forward with his $54.20 per share buyout deal. The Musk-Twitter trial will take place in October. Amid the latest legal filings, TWTR stock rose 3.6% to 42.52 on Friday, retracing the 200-day line and hitting its best levels in nearly three months.

Meanwhile, the California Department of Motor Vehicles on July 28 accused the electric vehicle giant of misleading customers about the capabilities of Autopilot and FSD, according to documents first reported by the Los Angeles. Time. But if the state DMV wins its action, it will probably only take Tesla to change its advertising and marketing.

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Celsius Stock

Celsius stock has been on a huge tear since breaking its 200-day line on July 5. News broke on August 1 that PepsiCo (PEP) was taking a significant stake in CELH and would be the energy drink maker’s main distributor.

On Friday, CELH stock fell 9% to 98.62, although it rebounded from its 10-day line and was still up nearly 11% for the week. Celsius will move from the S&P 600 small-cap to the S&P MidCap 400. But fewer mutual funds and ETFs track the mid-cap fund compared to the S&P 600, so fewer index funds can hold CELH shares. Also, leader in energy drinks monster drink (MNST) lost 5% on Friday on weak profits.

Celsius earnings are due on Tuesday, so investors have some decisions to make. If you bought CELH shares near day 200 or resistance around 72, then you still have plenty of cushion. You can choose to lock in some partial profits. For those who bought long, say in Monday’s Pepsi news, you might have little cushion or be sitting on a loss ahead of the results. Celsius stock tends to move a lot based on earnings.

Market rally analysis

It was a mixed week for the stock market rally. Growth stocks and small caps led the way while the Dow Jones and S&P 500 were little changed

But given the deluge of earnings and a scorching jobs report signaling sharp Fed rate hikes for longer, the market rally could have sold off hard at the end of last week after stocks hit highs. resistance levels. But they stopped, at most. Friday’s action in particular was encouraging.

The Nasdaq is above its early June highs, but nears a trendline from the start of the year. The Russell 2000 is just at its early June highs while the S&P 500 and Dow Jones are still working at this key level.

A longer break or a modest withdrawal would be healthy. The market rally has come a long way, with most of the advance coming from relatively light volume.

During this time, many top stocks or potential leaders could take a break. Breaking or falling major indices would provide an opportunity for companies like Monolithic Power and Onsemi to forge handles, creating lower entries and letting the moving averages catch up.

The same is true for Apple, Tesla and many other stocks.

Market leadership is expanding. Biotechnology, chips, aerospace/defense, solar, steel and energy, to name a few, are showing strength.

These are encouraging signs. But it could still be a bearish rally that will eventually run out of steam.

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What to do now

Investors should play in this market, but not for all marbles. There are still reasons to be cautious in the current market. At any one time, few stocks are giving buy signals, while sector upheavals and rotations can make it difficult to maintain positions.

So add exposure carefully. There is always an argument for taking partial profits.

Build your watchlists. Be sure to cast a wide net to spot potential leaders from various industries.

Read The Big Picture every day to stay in tune with market direction and top stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.


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