Last week’s rally in the stock market was mixed.
X
Dow Jones futures will open Sunday night along with S&P 500 futures and Nasdaq futures. Tesla (TSLA) and some chip stocks are noteworthy.
The Nasdaq hit 2023 highs last week, but ended with a modest gain. The S&P 500 and Dow Jones fell this week, but the market range remained weak.
Last week’s rally in the stock market was mixed. Also, there weren’t many stocks sending buy signals, and some stocks moved quickly.
But a volatile rise in the market is dangerous for investors. Cash is still the norm.
Tesla shares are about to bounce back, but face significant resistance as they lay the right side of the foundation.
Trends in EV-related chips ON Semiconductor (upon), Axcelis Technologies (ACLS) and Aehr test system (AEHR) are all trading close to the probability of entry. in the meantime, Advanced Micro Devices (AMD), Ram Research (LRCX) and broadcom (AVGO) is a semiconductor giant near a potential buying point.
Also note Sarepta Therapeutics (SRPT) on monday. SRPT stocks were suspended throughout Friday’s session as the FDA’s advisory panel debated whether to recommend Sarepta gene therapy for patients with Duchenne muscular dystrophy. The committee narrowly voted 8 to 6 in favor of early approval. FDA is not required to follow committee votes, but will consider them. SRPT shares fell 8.2% in the week through Thursday as an FDA briefing suggested the treatment could be rejected.
A video embedded in the article discussed the various messages of the market rally and analyzed the ON stock. trade desk (TTD) and Kinsale Capital (KNSL).
dow jones futures today
Dow Jones futures open Sunday at 6:00 pm ET along with S&P 500 and Nasdaq 100 futures.
Note that overnight trading such as Dow Futures does not necessarily translate into actual trading in the next regular stock market.
IBD experts analyze hot stocks during the stock market rally on IBD Live.
stock market rise
The rally in the stock market continued to be a tense but mixed move that appeared to have weakened by Friday’s close.
The Dow Jones Industrial Average fell 1.1% in last week’s stock market trading. The S&P 500 index fell 0.3%. The Nasdaq Composite rose 0.4%. Small-cap Russell 2000 fell 1%.
Yields on 10-year Treasuries rose two basis points to 3.46% before rebounding on Friday.
US crude futures fell 1.8% last week to $70.04 a barrel, down 15.1% in four weeks.
Copper prices fell 4%. Gold fell 0.1%, but has fallen 1.1% over the past three days. Silver fell 6.8%.
ETFs
Among Growth ETFs, Innovator IBD 50 ETF (FFTY) was up 0.3% last week, while the Innovator IBD Breakout Opportunity ETF (game) fell 0.7%. iShares Augmented Technology Software Sector ETF (IGV) rose 1.4%. VanEck Vectors Semiconductor ETF (SMH) fell 1.2%%. AMD shares are SMH’s primary holdings, as are Lam Research, Broadcom and On Semiconductor.
A stock that reflects a more speculative story, the ARK Innovation ETF (Arkuk) was up 0.8% last week, while the ARK Genomics ETF (Argu) added 0.5%. Tesla shares are the number one holding of all Ark Invest ETFs.
SPDR S&P Metals & Mining ETF (XME) fell 2.6%% last week. Global X US Infrastructure Development ETF (pave) fell 1%. US Global Jets ETF (Jets) fell 1.3%. SPDR S&P Homebuilders ETF (XHB) closed the trade just above breakeven. Energy Select SPDR ETF (XLE) fell 2.1%. Healthcare Select Sector SPDR Fund (XLV) abandoned just over 1%.
Financial Select SPDR ETF (XLF) fell 1.3%.
SPDR S&P Regional Banking ETF (KRE) fell 5.2%. Packwest Bancorp (PACW) plunged 23% on Thursday after revealing heavy deposit losses in the week ending May 5.
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tesla stock
Tesla fell 1.2% last week to 167.98, continuing to trade near its 21-day moving average. Stocks started strong on Friday, but turned down from near the 50-day moving average.
If Tesla stock rises to some extent, it will have a buy point of 207.89 from a double-dip base. The base has formed below the 200-day line, but the buy point is now above the long-slipping 200-day line.
Bulls in TSLA stocks could spy on positive entries, such as the 50-day line and possibly a downtrend line from the crest of a three-month consolidation, but risks could rise, especially in the current market. be.
On Friday, Tesla CEO Elon Musk confirmed that Linda Yaccarino, who had just stepped down as head of advertising at NBCUniversal, would become Twitter CEO. Musk tweeted on Thursday afternoon that he had found a new leader for the social site. As a result, Tesla shares rose to close.
Yaccarino could help revive Twitter’s ad revenue. For TSLA stock investors, Musk may be able to spend more time with Tesla, but Twitter’s product and technology lead will remain.
Chip stocks to watch
On Semiconductor is the supplier of Tesla chips. ON shares have traded relatively strongly just above the 50-day line within the three-month consolidation period. On Friday, shares of ON Semiconductor signaled an early entry to clear out recent trading, but the stock quickly erased the gains. Investors can still take advantage of price action above the May 8 high of 81.72 to open positions.
That’s probably a safer bet than buying ON stock at the breakout with a buy point of 87.65.
Onsemi is a major customer of Aehr Test Systems’ chip test equipment. AEHR shares sold heavily in late March and late April, but the 200-day line provided support. Since then, the stock has risen, rising 2% to 27.67 last week. However, Aehr shares are still below the 50-day line. A definitive return to the 50-day line would see AEHR stocks aggressively entering new consolidations. Like ON stocks, Aehr Test Systems is probably safer to buy from early entry than traditional buying points.
ACLS stock, which was a leader among semiconductor giants in 2023, has also retreated since late March. Shares of chip equipment makers exposed to EVs fell on May 4 following first-quarter results, but closed lower. Axcelis shares climbed to the 50-day line, which hits resistance. A retake of the 50-day line would also break the downtrend line, giving two reasons for an early entry. The combined buy point for ACLS shares is 136.48. Axcelis rose 1.6% on the week to 122.11.
AMD shares surged 19% in the six sessions ending May 11, above the 50-day line and offering early entry on May 8. The stock fell 1.9% to 95.26% on Friday. Ideally, the chip giant would build a handle on the cup base, which currently has a bypoint of 102.53.
LRCX shares fell 0.5% to 527.10 for the week. The chipgear giant boasts a flat base buy point of 548.95 and has traded above the 21-day and 50-day lines in the past few weeks. Investors may use 536.60 as an early entry. This is the buy point for the 4-week tight pattern on the weekly chart.
The buy point for AVGO shares is now 648.60 from a flat base of 7%, according to MarketSmith analysis. The stock rose 0.2% to 631.15, closing just above the 50-day line. A decisive move above 50 days, possibly a break above the downtrend line, would allow early entry.
market rise analysis
The stock market rally had an overwhelming week. On Wednesday, the Nasdaq Composite Index hit a 2023 high and rose slightly further on Thursday and early Friday. However, the Nasdaq turned down on Friday and ended the week with a modest gain.
The S&P 500 fell with a small weekly decline but held onto the 21-day line. The Dow Jones has tested the 50-day moving average, which has been the support area for major indices in recent weeks. Both indexes fell for the second week in a row.
Even the Nasdaq’s relative outperformance was largely due to parent company Google alphabet (Google) and other mega-cap stocks. The Nasdaq 100 rose 0.7% for the week.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) fell 0.3%, its fourth straight week of slight weekly declines. But it still holds 50 days.
Invesco S&P 500 Equal Weight ETF (RSP) decreased by 1.1%. RSP is pegged below all moving averages.
Other indicators point to weaker market width, such as rising/falling lines and new highs versus new lows.
Not many stocks offer a buying opportunity. Some recent revenue gap ups, but not all, are working. Other stocks include ON Semiconductor, Trade Desk, New Relic (new), I was making fun of the purchase point, but then I got frustrated, especially with TTD. These stocks may still work, but moving forward is hard.
Stock markets continue to grapple with economic concerns, and recession risks now outweigh inflation. The banking crisis is not resolved. And the debt ceiling could be a bigger concern for the market. If Congress and President Biden can’t come to an agreement, a US sovereign default is likely by early June.
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what to do now
The major averages didn’t have a strong week, but they look better than the equivalent ETFs and insider stocks.
Investors should be exposed to relatively light risks. If you have some positions that are doing well, you may end up investing more than others. But even that is no reason to be aggressive.
A side market is far more dangerous than a bear market. When indices and major stocks are falling, it’s clear that cash is king. However, volatile and range-bound markets offer enough strength to attract investors, but only chop them up.
Investors should focus on preparing for the next strong uptrend. A big rally in that bull market could happen next week, next month, or next year. Despite the market woes and lack of stocks to buy, quite a few stocks have set or are close to setting. So prepare your watchlist.
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