The stock market rally had a relatively quiet week, with the major indexes holding right at record highs.
The Dow Jones Industrial Average edged up 0.1% in last week’s stock market trading. The S&P 500 index dipped 0.2%. The Nasdaq composite climbed 0.4%. The Dow Jones and S&P 500 rebounded from tests of the 21-day exponential moving averages. All the major indexes had a closing range above 80%.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) dipped 0.3% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) rallied 1.4%. The iShares Expanded Tech-Software Sector ETF (IGV) climbed 0.4%. The VanEck Vectors Semiconductor ETF (SMH) lost just over 1%.
Dow Jones, S&P 500 and Nasdaq futures opens again on Sunday evening at 6 p.m. ET. The stock market rally had the major indexes and growth names trading tightly. Bitcoin continued its huge run over Christmas weekend, soaring above $25,000 and then $26,000 for the first time on Saturday.
House Democrats plan to vote Monday on a bill to increase the stimulus deal’s direct checks to $2,000, up from $600. That was one of President Trump’s objections to the stimulus deal, made after Congress passed it.
If Trump doesn’t sign the stimulus deal by Jan. 2, the next Congress would have to pass the legislation.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Elon Musk said Tesla (TSLA) must go “all out” in the next few days to reach the “historic milestone: of 500,000 deliveries in 2020”.
To reach 500,000 for the full year, Tesla deliveries must hit 181,000 in the fourth quarter, blowing out the third quarter’s record by more than 40,000. The odds of Tesla reaching the mark got a big boost with a huge jump in China sales last month. The fact that Musk is saying that 500,000 is in sight will certainly raise expectations that Tesla will indeed achieve that mark.
Tesla stock fell 4.8% last week to 661.77, but closed near the top of its weekly range. That followed a 70% run over the prior month on news that TSLA stock would join the S&P 500 index. That was capped off with a right-at-the-close surge to a record 695 on Dec. 18.
Tesla stock, which boasts a $627 billion market cap, does not have a proper buy point.
Large cap technology stocks good for buy option this period are Apple stock, Microsoft (MSFT), Taiwan Semiconductor (TSM), Adobe (ADBE) and Qualcomm (QCOM).
Apple (AAPL) is performing optimally, with recent big gains; it’s running towards record highs, suggesting several early buy of points. Microsoft stock is also starting to gain momentum, tripping some early buy signals as well.
Apple stock rose 4.15% last week to 131.91, after a 3.5% gain in the prior week and 10.8% so far in December.
The relative strength line for AAPL stock is rebounding, moving closer to record highs after slumping for a few months. That followed a long RS line uptrend from January 2019. The RS line, the blue line in the charts provided, track a stock’s performance vs. the S&P 500 index.
Apple stock has a world-beating $2.24 trillion market valuation.
Microsoft stock climbed 1.9% to 222.69 last week after a 2.5% rally in the prior week. So far this month MSFT stock is up 4%.
Shares are just below a downward-sloping trend line starting with the Sept. 2 peak of 232.86. Investors also could use 228.22 as another early entry, with 232.96 as the official buy point.
Among the mere large-cap techs, Adobe stock is flashing some early buy signals too. TSM stock is in a tight pattern at record highs, signaling an early entry on Christmas Eve. Qualcomm stock is finding support at the 21-day exponential moving average and just above its 10-week line.
Adobe stock fell 1% last week to 498.14, but that followed a 5.7% jump in the prior week. It’s up 4.1% in December.
TSM stock edged up 1.5% to 105.87 last week after a 0.2% gain in the prior week.
Taiwan Semiconductor is the world’s largest chip foundry, making semiconductors for Apple, Qualcomm, AMD (AMD), Nvidia (NVDA) and others.
Qualcomm stock climbed 1% to 148.90 last week after a 2.2% advance in the prior week. For the month, QCOM stock is up only 1.2%, thanks to an 8.5% tumble in the week ended Dec. 11.
Tesla stock, Apple, Microsoft, Adobe and Taiwan Semiconductor are on IBD Leaderboard. Microsoft and Adobe stock are on IBD Long-Term Leaders. TSM stock is on the IBD 50.
This is a good time to be looking for stocks setting up, either in bases, tight patterns or at key support.
With the stock market rally trending flat to slightly higher, both in the major indexes and leaders, the risks of growth names being greatly extended are a little less likely. But you should analyze your holdings individual and as a whole.