Market rally attempt is finally doing this; AMD tops 5 stocks with flashing buy signals | Daily business of the investor

Dow Jones futures were little changed Wednesday night, as were S&P 500 futures and Nasdaq futures. The stock market rally attempt had a decent session on major indices and closed near highs as 10-year government bond yields fell.




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Once again, a large number of growth stocks showed strength in what was, at best, a lackluster market. This offset the weakness in Apple stocks as well as financials and airlines.

AMD stock, CrowdStrike (CRWD), Bill.com (BILL) and Sea Limited (SE) hovered over buy points. All four bounced back from their 50-day or 10-week lines as they broke downtrends. In the meantime, Snowflake (SNOW) admitted a mini-consolidation that could be seen as a handle on a long, deep plinth.

Taiwan semiconductor (TSM) revenue is available. While TSM stock has struggled since its high in February, the world’s largest chip foundry is still a frontrunner for its industry. It makes chips for modern micro devices (AMD), Apple (AAPL), Nvidia (NVDA) and many more.

TSM’s insights into chip scarcity and its own investment plans will be important to the industry and beyond, even if TSM stock doesn’t make big changes.

UnitedHealth (UNH) and Dominos pizza (DPZ) also reported early Thursday. Then do it Bank of America (BAK), City group (C), Morgan Stanley (MRS), Wells Fargo (WFC) reports the results early Thursday. You are following better than expected gains from the Dow Jones giant JPMorgan Chase (JPM).

Financials were notable losers on Wednesday, likely due to declining 10-year government bond yields for the second consecutive year. JPM stock fell 2.4% from a recent buy point. BofA, Citigroup and Wells Fargo all fell slightly while Morgan Stanley climbed higher.

Delta Airlines (DAL) led to a sell-off of airline shares. Delta reported profits after six quarters of pandemic losses, but forecast a small loss in the fourth quarter due to rising fuel costs. DAL shares fell 5.8%, the day’s biggest loser in the S&P 500 index. Other airlines also slumped solidly.

AMD stock is on the IBD leaderboard. AMD and SE stocks are on SwingTrader. Bill.com is on IBD 50. AMD was IBD stock of the day on Wednesday.

The video embedded in this article examined and analyzed Wednesday’s market rally Data dog (DDOG), Sea Ltd. and CRWD shares.

Dow Jones Futures today

Dow Jones futures were hardly changed compared to their fair value. S&P 500 futures and Nasdaq 100 futures were roughly flat.

Keep in mind that overnight action in Dow futures and elsewhere does not necessarily result in an actual trade in the next regular trading session.


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


Stock market rally

The stock market rally attempt ended with slight to solid gains on Wednesday, but best of all, the indices eventually closed near the highs.

The Dow Jones Industrial Average closed unchanged in trading on Wednesday. JPMorgan and American Express (AXP) weighed on the Dow. The S&P 500 index rose 0.3% despite financials, airlines and many energy stocks weighing on the broad index. The Nasdaq composite gained 0.7%. The small-cap Russell 2000 rose 0.5%.

The consumer price index got a bit hot, with inflation reaching a 13-year high again at 5.4%. But core inflation was consistent and steady at 4%.

The 10-year government bond yield rose briefly to 1.6% after the CPI report and before the stock market opened, but it reversed and closed 3 basis points down from 1.55%.

10-year yield didn’t move much after the Fed minutes were released from the September meeting at 2 p.m. ET. Policy makers said a “gradual tapering process” could begin in mid-November, with the acquired assets fully phased out by mid-2022. Several members advocated a more aggressive bond taper. The Fed minutes provided a little more detail but did nothing to change expectations for an official decision to cut bonds at the early November meeting.

US crude oil prices fell slightly but rebounded from lows and stayed above $ 80 a barrel. Copper futures rose nearly 4%.

ETFs

Among the best ETFs, innovator IBD 50 ETF (FFTY) rose 1.7% to close just above its 50-day line. The innovator IBD Breakout Opportunities ETF (BOUT) lost 0.35%. The iShares Expanded Tech-Software Sector ETF (IGV) gained just over 2%. CRWD Stock and Bill.com are IGV components. The VanEck Vectors Semiconductor ETF (SMH) was up 0.85%, with TSM stocks and AMD holding main positions.

SPDR S&P Metals & Mining ETF (XME) was up 1.5% and Global X US Infrastructure Development ETF (PAVE) was up 0.3%. The US Global Jets ETF (JETS) was down 2.5% as DAL stocks and other airlines took their toll. SPDR S&P Homebuilders ETF (XHB) gained 0.5%. The Energy Select SPDR ETF (XLE) lost 0.1% and the Financial Select SPDR ETF (XLF) lost 0.6%.

The ARK Innovation ETF (ARKK) was up 1.5% and the ARK Genomics ETF (ARKG) was up 1.1%, reflecting more speculative story stocks.


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Shares in buy zones

Bill.com stock rose 5.2% to 294.71, extending a move from the 21-day and 10-week lines. The volume was slightly below the average trading volume. By the end of the week, BILL could have a buy point base of 302.09.

CRWD stock rose 7% in volume to 270.44, recovering from its 50-day line and breaking a trend line, allowing early entries. The official buy point for CrowdStrike stock is 289.34 from a base that began in late August.

The SE share rose 7.5% to 349.35, jumped off its 21- and 50-day lines and easily broke a downtrend. Both offered early entry into the Southeast Asian e-commerce giant. Volume was strong. The line of relative strength reached a new high as the SE share holds in its base. That’s a bullish mark that denotes it as a “blue dot” stock in MarketSmith.

AMD stock rose 3.9% to 109.16, hitting its 50-day line again, breaking a short-term resistance this time around. Investors could use 107.95, October 7th high, as an early entry. Volume ended up underperforming for AMD stock, but it was its strongest in a month.

AMD has a raised floor base with a buy point of 115.59.

The SNOW share rose by 4.8% to 327.85, the highest closing price of the year. During the day, Snowflake shares hit 329.75, above the high of a brief consolidation. This could be viewed as a grip on a huge low base that dates back to last December when SNOW stock hit a record high of 429. But stocks overcame tiny resistance within the “handle” and broke a trend line. Volume was below average but picked up speed in the late afternoon.

Analysis of the market rally

The stock market rally attempt eventually closed near session highs, with the Nasdaq leading the way even as Apple’s Megacap stock fell slightly. This closed a four-day series of the most important indices, especially the Nasdaq, poorly. But the major indices all stay below their falling 21-day moving averages, with the 50-day line even further ahead. There wasn’t nearly a day after that to confirm the new rally attempt.

Some of it reflects the weakness among the tech megacaps. Apple stock trimmed losses on Wednesday but is near recent lows and not far from its 200-day line. Microsoft (MSFT) is the only one of the trillion-dollar stocks above its 50-day line, and just barely.

The market remains in correction.

But don’t tell the leading stocks. The number of growth stocks that have shown buy signals or expanded gains in the past few days has been impressive. With the Nasdaq actually rising and closing near intraday highs, it’s not surprising that growth had another strong session as AMD, CRWD stocks and others showed.

Financial stocks are wilting with government bond yields, though 10-year yields have still risen sharply in recent weeks. Energy stocks and fertilizer stocks are also pausing, but that could be healthy after moving heavily over the past few weeks.


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What now

Still, the major indices remain below their 21 and 50 day lines. The market has not yet proven itself. The major indices could easily make a significant price decline in the next few sessions – perhaps after a promising headfake – to break the recent lows. By then, many of the growth stocks that have done so well recently would likely come under pressure.

There is no doubt that buying opportunities have increased this week. In general, these trades have proven their worth in the short term.

If the temptation to add exposure was great on Monday and Tuesday as major indices closed near the lows, it could have been all but irresistible on Wednesday.

If you’ve made some new purchases in the past few days, after relatively modest wins, take partial profits with you to ensure you make a profit. Reduce losses quickly.

For those who have largely stayed on the sidelines, there will be a time, whether tomorrow, next week, next month, or even next year, that there will be a confirmed market rally. Then there are many options.

Read The Big Picture daily to keep up with market direction and leading stocks and sectors.

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

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