Dow Jones futures and S&P 500 rose slightly on Sunday night, while Nasdaq futures rose slightly. Merck announced a major biotech deal and positive drug trial results, while Tesla and Netflix are among this week’s notable earnings calls.Apple has a new buying point.
X
Last week’s rally in the stock market was gradual, with significant gains and reversals. Fears of a recession are growing despite inflation declining.
I haven’t had many opportunities to buy. Some stocks sent a buy signal and quickly fell. Investors should be aware of adding exposure in the current environment. amid market volatility apple (AAPL), lululemon athletica (Lulu) and regeneron pharmaceutical (REGN) created a bullish tight pattern.
Earning season is heating up. Tesla (TSLA), ASML (ASML), netflix (NFLX) and DHI stocks are all approaching buy points for immediate returns. ASML and Dr. Horton (DHI) provided insight into the respective groups.
in the meantime, Western Alliance Bank (Wall) is one of many bank and financial institution reports this week. How is the Phoenix-based bank holding up? WAL stock has suffered the most in recent weeks.
LULU In stock IBD leaderboard watchlist and IBD50.
Merck acquires Prometheus
dow jones giant Merck (MRK)I’ll take it Prometheus Bioscience (RXDX) traded approximately $10.8 billion at $200 per share in cash. This represents a 75% premium to the RXDX stock’s closing price on Friday. Clinical-stage Prometheus jumped 166% on December 7th and 22% on December 8th following strong Phase 2 trial results for the treatment of ulcerative colitis and Crohn’s disease. After that, the stock price leveled off significantly.
Separately, Merck and Moderna (mRNA) reported that a cancer vaccine showed strong results in melanoma patients according to a phase 2b trial. The patient received Moderna’s personalized mRNA therapy with Merck’s cancer drug Keytruda. The pharmaceutical company plans to begin Phase III trials later this year to expand the vaccine to treat other forms of cancer.
dow jones futures today
Dow Jones futures rose 0.2% to fair value. S&P 500 futures were up 0.2% and Nasdaq 100 futures were up.
Note that overnight trading on Dow futures or elsewhere does not necessarily lead to actual trading at the next regular stock market session.
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stock market rally
Stock market gains edged higher this week despite daily volatility.
The Dow Jones Industrial Average rose 1.2% in last week’s stock market trading. The S&P 500 index he rose 0.8%. The Nasdaq Composite rose 0.3%. Small-cap Russell 2000 is up 1.5% in his week.
The 10-year Treasury yield rose 14 basis points to 3.52%.
US crude futures rose 2.3% last week to $82.52 a barrel.
ETFs
Innovator IBD50ETF (FFTY) rose 2.65% last week, with the Innovator IBD Breakout Opportunities ETF (game) increased by 1.9%. iShares Expanded Tech Software Sector ETF (IGV) increased by 0.5%. VanEck Vectors Semiconductor ETF (SMH) fell 0.1% after falling 4.1% the week before. ASML shares are a large holding of SMH.
Reflecting more speculative story stocks, the ARK Innovation ETF (arc) rose 0.6% last week, while the ARK Genomics ETF (ARKG) increased by 2%. Tesla stock is the top holding across Ark Invest ETFs.
SPDR S&P Metals & Mining ETF (XME) was up 2% last week. Global X US Infrastructure Development ETF (pave) increased by 2.7%. US Global Jets ETF (jet) fell 1.1%. SPDR S&P Homebuilders ETF (XHB) increased by 4.1%. Energy Select SPDR ETF (XLE) increased by 2.65%. Healthcare Select Sector SPDR Fund (XLV) added 0.8%.
Financial Select SPDR ETF (XLF) rebounded 2.8%. However, the SPDR S&P Regional Banking ETF (Kure) fell 0.75%. WAL shares are one of many KRE holdings.
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applestock, lululemon
Apple stock, lululemon, and regeneron all form tight patterns, but in different circumstances.
Apple’s stock rose 0.3% to 165.21 last week, rebounding from Thursday’s 21-day line. The stock fell 0.15% last week. A 3-week tightening is considered if the previous week had a bi-weekly close between 1% and 1.5%. The buy point for AAPL stock is 166.94. This extends slightly from the flat base that cleared a month ago, but could provide a place for existing holders to add a few more shares.
LULU shares rose 1.1% to 368.25, entering a three-week tight position at the 371.36 buy point. Yoga apparel retailers continue to perform well after revenue gap up. Lululemon’s 3 Week Tight is in a cup base. In fact, tight patterns act as handles on daily charts. Therefore, investors can use breakouts as a place to start their positions. Ideally, the LULU strain provides more shakeout at first.
REGN stock rose 0.1% to 829.33 and now boasts a tight four-week pattern at 837.65 entries. The biotech giant is still in the flat base breakout buy range from 800.58. Investors can use the move past the tight entry as a place to open or add positions in Regeneron stock.
Tesla earnings
Tesla’s first-quarter earnings are due to be released on Wednesday night. The electric vehicle giant reported record first-quarter shipments earlier this month thanks to significant price cuts and new US EV credits. Yet deliveries fell, and production once again significantly exceeded sales.
Investors will see how much it affected Tesla’s precious profit margins, which had already begun to fall last year.
On Friday, Tesla cut prices in Europe, Singapore and Israel, but the European price cuts largely absorbed the cuts in early March. A week ago, Tesla slashed U.S. prices for all of its vehicles. This points to further margin pressure in the second quarter.
Tesla shares fell 6 cents to 185 last week after falling 10.8% the previous week. Stocks hit resistance at the 21-day and 50-day lines. TSLA stock has a cupped handle base forming below the 200-day moving average, which is not very good. So while Tesla’s buy point is at 207.89, investors are currently below 213. He could wait more than 200 days for a decisive move.
Another possibility is if Tesla’s stock price rises above the 50-day line in earnings, offering an early entry with a little headroom to the 200-day line.
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netflix earnings
Netflix’s earnings will be paid out on Tuesday night. Earning subscriptions is often more important than Netflix revenue. The results will also matter for streaming rivals such as: disney (DIS), even as Roku (Roku).
After more than doubling from July to early February, Netflix’s stock has reestablished a base for cups with handles at a buy point of 349.90. The handle is formed with a slight volume and is supported by a 50-day line. NFLX’s share price fell 0.2% over the week to 338.63.
Earnings in ASML
ASML’s stock was reported early Wednesday morning, outperforming peers. Ram Research (LRCX) after the deadline. Marketsmith analysis shows ASML earnings recovering in 2023 after a difficult period in 2022. The stock rose 1.4% last week to 666.20, rebounding from the 50-day line. The buy point is 683.28.
DR Horton Earnings
DR Horton’s earnings are due early Thursday, with homebuilder results. The homebuilding giant, like other rivals, is expected to report a significant decline in EPS. Guidance is the key. DHI stock rose 2.7% to his 98.25. On Tuesday, the stock fell back in the Cup with Handles, where he regained its 99.50 buy point, but has since fallen.
Western Alliance Bancorp Earnings
The Western Alliance will report Tuesday night. The California-based bank has already provided some key first-quarter indicators, including deposits and unrealized losses. But investors will want to hear about the ongoing situation. WAL shares rose 2.9% last week to 31.66, but are still plummeting in 2023. Warren said bank deposits are probably safe, as Buffett said Wednesday, but it’s not clear if bank stocks will be.
Charles Schwab (Shu), bank of america (BACs), goldman sachs (GS) and several super-regional banks report this week.
Overall, they provide a good picture of deposit and lending trends.
Market rally analysis
The stock market rally didn’t move much from week to week, but there were big daily and intraday fluctuations. The major indices posted a big gain on Thursday before falling on Wednesday and Friday.
In fact, the Nasdaq Composite Index fell every day except Thursday and still rose week after week. The S&P 500 and Dow Jones hit his two-month high on Friday before falling, with the Dow rising for his fourth straight week.
The major indices are not far from their 2023 highs, but they are also not below the 50-day line.
On the other hand, the Invesco S&P 500 Equal Weight ETF (RSP), giving no more weight to megacaps such as Apple and Tesla stocks.
Over the past week, markets have become more concerned about recession risks. Notably, he was prompted by Wednesday’s news that Fed staff predicted a “moderate recession” at the March policy meeting. But despite these concerns, the chances of a rate hike in May actually rose to 80% on Friday, despite inflation data improving overall.
A recession and Fed rate hikes are not a great combination for equities. As such, last week’s market rally showed resilience. And despite the volatility, the Nasdaq and S&P 500 have effectively formed a tight three-week pattern, with the recent range looking a lot like his LULU stock.
Market breadth has improved somewhat over the past few weeks. However, there were not many stocks that gave a buy signal. And the market reversal meant that some stocks that seemed viable quickly weakened or reversed.
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what to do now
How public should investors be? It depends on the stocks you own. Some stocks that have flashed buy signals in the past few weeks have performed well, while others have mixed or fallen.
Unstable market fluctuations have made it difficult to add stocks lately. So it may be a good thing that Thursday’s big rally offered relatively few buying opportunities.
Macroeconomic conditions remain fluid and financial results are likely to rise over the next few weeks. As such, the volatility of the card can increase.
If the market shows some strength and the stock flashes a buy signal, gradually add more exposure. Be prepared to take partial profits and exit losers. Remember: If you add exposure quickly, you should be prepared to scale out just as quickly.
Finding early entries and buying closer to those buying points is still a smart strategy.
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