Dow Jones futures rose slightly on Thursday night, along with S&P 500 futures and Nasdaq futures. The stock market rally had a strong session on Thursday as the Nasdaq continues to build momentum with growth joining the tech megacards. Taiwan Semiconductor (TSM) will be in focus on Friday.
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The splitting of the split market is over, with the Nasdaq record breaking records and more and more technological stocks breaking out, offering early entries or making other bullish movements.
Apple stock builds along with the right side of its base Amazon.com (AMZN), Adobe (ADBE) and Nvidia stock. Shopify (SHOP) flashes an early entry. Meanwhile, it Microsoft (MSFT), Facebook (FB) and Google Parent Alphabet (GOOGL) is at a record high, in buying zones.
IBD 50 shares Etsy (ETSY), Square (SQ), Pinterest (PINS), Wayfair (W) en HubSpot (HUBS) is setting up in bullish bases. Etsy stock and Square are offering early entries, while PINS and HUBS have already done so.
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Taiwan semiconductor sales owed
Taiwan Semiconductor is likely to report March sales on Friday morning, with quarterly earnings next week. The world’s largest disc foundry offers clues to the demand for its customers, including appeal (AAPL) and Nvidia (NVDA).
The TSM stock rose 2.95% to 123.43 on Thursday and closed just below the 50-day line. A move above the 50-day high and the high of 127.40 last week could provide an early entry as TSM shares build the right side of a base with a buying point of 142.29.
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Tech Giants Lead
Apple shares rose 1.9% to 130.36, a day after regaining its 50-day line. This is likely to be an early entry, although the weak relative strength of AAPL shares did not give a strong reason for aggressive purchases. Nvidia rose 1.2% and worked to the right of its base after moving sideways for several months.
Microsoft stock rose 1.3%. Google shares rose 0.5%, while Facebook fell 7 cents. The three titans have risen 4.5%, 5.6% and 4.8% so far this week.
Amazon’s share rose 0.6% on Thursday, heading in the direction of an early entry. Adobe shares rose 1.3%, reaching resistance near an early entry of 506.61. SHOP shares rose 5.45% to 1,222.69, recovering its 50-day line after bouncing back from its 21-day line.
A possible weakness is that some of these recovery technologies, including Apple and Amazon stocks, have risen to low volume.
Square Stock, Nvidia, Microsoft and Taiwan Semi are on IBD Leaderboard. Shopify shares are on SwingTrader. MSFT shares and Adobe are on the IBD long-term leader list. In addition to the five quoted above, GOOGL shares are also on the elite IBD 50.
Dow Jones Futures Today
Dow Jones futures rose 0.1% to fair value. S&P 500 futures rose 0.2% and Nasdaq 100 futures rose 0.25%.
Remember that overnight actions in Dow futures and elsewhere do not necessarily translate into stocks in the next regular session.
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Coronavirus News
Coronavirus cases worldwide reached 134.43 million. The deaths from Covid-19 were 2.91 million.
Coronavirus cases in the US hit 31.71 million, with deaths above 573,000.
Stock market rally Thursday
The stock market boom has been good, with key indices closing in on the sessions, Fed chief Jerome Powell said before the IMF on Thursday.
The Dow Jones industrial average climbed 0.2% in stock market trading. The S&P 500 index rose 0.2%. The Nasdaq composite jumped 1%. The Russell 2000 rose 0.85%, regaining its 50-day line.
The 10-year Treasury yield fell by 2 basis points to 1.63%, the lowest since March 25th.
Economic reopening and recovery are playing back, including steel, energy, travel and industrial stocks, but many have reduced early losses.
Of the best ETFs, the Innovator IBD 50 ETF (FFTY) recovered 1.3%, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 1.9%. The iShares Expanded Tech-Software Sector ETF (IGV) climbed 1.85% and moved above its 50-day line. The VanEck Vectors Semiconductor ETF (SMH) rose 1.4%, just below record highs. TSM shares are the best SMH stock with Nvidia as a key component.
SPDR S&P Metals & Mining ETF (XME) fell 0.2% and Global X US Infrastructure Development ETF (PAVE) was flat. The US Global Jets ETF (JETS) fell 0.3%. All three ETFs closed the lowest morning.
ARK Innovation ETF (ARKK), which reflects more speculative story shares, jumped 2.75%, with SQ shares as a key stake. ARK Genomics ETF (ARKG) climbed 1.1%.
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Square stock rose 5.4% to 258.37, reaching a short-term high of 252.60. This is another early entry after regaining the 50-day line and tending to deteriorate on Wednesday. SQ share has an official buy point of 283.29.
Shares in Etsy rose 5.6% to 215.39, the S&P 500’s best performance on Thursday. It regained its 50-day average and a breakdown trend, with two reasons to start a position. The leader for e-commerce on arts and crafts also has 231.44 as a possible early entry. The official buy point of Etsy share is 251.96.
Pinterest share climbed 2.5% to 85.98. It is approaching a buy point of 90. PINS shares offered an early entry when it broke a deteriorating trend last week and passed the 50-day high.
Wayfair stock rose 1.9% to 332.22. It has a buying point of 356.06 handles.
HubSpot share jumped 6% to 514.18. The HUBS stock has a buying point of 547.57 after crossing its 50-day line and a trend line last week.
Market analysis
The stock market had a positive session, with growth stocks taking the lead.
The S&P 500 is at a record high; the Dow Jones hovers just below Monday’s all-time high while the Nasdaq rushes to join them. The Russell 2000 is now lagging behind, but it’s not too bad to work on the 50-day line not far from record highs.
The split of the split market, with the Nasdaq and growth stocks in a de facto correction, seems to be over. Chip shares led the technological revival, followed by Microsoft, Facebook and Google on Monday. Now software, medtech plays and other growth sectors are underway.
More stocks are starting to flicker early entries, especially from growth sectors that have struggled for several weeks.
But many large 2020 stocks are still well below their 50-day lines, including Tesla (TSLA), Teladoc Health (TDOC) and Zoom video (ZM). Maybe they will bounce back. Do not assume that a previous big winner will bounce back.
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What to do now
The sales of big tech winners in February and the end of March may have discouraged some investors. But over the past few weeks, the stock market has clearly improved and offers a large number of breakouts.
This is an important lesson for investors. If the market is winding or corrected, investors should reduce exposure or go for cash. But they must remain engaged. Take note of the market action and build watchlists. That way, you’ll be ready for a new market meeting.
Investors should take advantage of this market march and contribute to exposure over the past few weeks, while not overweighting in a particular stock, sector or theme. While reopening and recovery play, it’s usually Thursday, but many still have strong
Please follow Ed Carson on Twitter @IBD_ECarson for stock market updates and more.
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