Dow Jones futures were slightly higher, while S&P 500 futures were lower, and Nasdaq 100 futures dived early Wednesday, as Georgia citizens voted to decide a pivotal runoff election. Apple stock rebounded after triggering a sell signal from a buy point, while Tesla aimed for more record highs after a price-target hike after the close Tuesday. JD.com surged to a breakout above a new buy point.
The stock market rally recovered a portion of Monday’s sell-off losses, as it continues to trade just off record highs. The Dow Jones Industrial Average rallied 0.55%, or 167 points, while the S&P 500 climbed 0.7%. The tech-heavy Nasdaq composite moved up 0.95%.
Among the Dow Jones leaders, Apple (AAPL) gained 1.2%, while Microsoft (MSFT) edged higher. Apple stock triggered a key sell rule on Monday.
Tesla (TSLA) moved up 0.7% to extend a win streak to eight sessions. JD.com (JD) soared 10.6% to break out past a new buy point and move into buy range.
Stocks in or near buy zones in the current stock market rally are Nvidia (NVDA), Pinterest (PINS) and Target (TGT).
Apple, Microsoft, Target, and Tesla are IBD Leaderboard stocks. Pinterest is an IBD SwingTrader stock and was also featured in this week’s Stocks Near A Buy Zone column. JD.com and Nvidia were this week’s IBD Stock Of The Day picks.
Dow Jones Futures Today: Georgia Vote
Early Wednesday, Dow Jones futures rose 0.3%, while S&P 500 futures dropped 0.1% vs. fair value. Nasdaq 100 futures pared sharp losses to 1.3%. Remember that trading in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Tuesday’s outcome in Georgia will determine whether Republicans will hold control of the Senate or Democrats retake the majority. The polls in Georgia closed at 7 p.m. ET.
Results showed leads for Democrat Senate candidates Raphael Warnock and Jon Ossoff, according to the New York Times forecasts. The NYT forecasts say Warnock will win, while Ossoff is “pretty likely” to win. Early Wednesday, the Associated Press declared Warnock the winner.
Among exchange traded funds, Innovator IBD 50 (FFTY) jumped 2% Tuesday. The Nasdaq 100-linked Invesco QQQ Trust ETF (QQQ) traded up 0.8%. Meanwhile, the SPDR S&P 500 ETF (SPY) ascended 0.7%.
Amid the coronavirus stock market rally, the major stock indexes looked to recover from a rough start to 2021. The tech-heavy Nasdaq ended 2020 up 43.6%, its best year since 2009. The S&P 500 was up 16.3%, while the DJIA advanced 7.2%.
U.S. Stock Market Today Overview
Last Update: 4:36 PM ET 1/5/2021
According to the Worldometer data tracker, the cumulative number of confirmed coronavirus cases in the U.S. topped 21.4 million on Tuesday. Total virus-related deaths rose past 364,000.
The cumulative total of worldwide Covid-19 cases confirmed since the start of the outbreak topped 86.6 million Tuesday, with more than 1.87 million virus-related deaths.
Coronavirus Stock Market Rally
Looking back at the current uptrend, November was a key month for the stock market. IBD’s The Big Picture flagged the new uptrend following the market’s bullish follow-through day on Nov. 4. Meanwhile, 2021 kicks off with stocks just off all-time highs. Be sure to check out IBD’s Stock Market Outlook for 2021.
Monday’s Big Picture cautioned, “The stock market got a lousy start to 2021, as indexes dripped with losses and were left facing a technical test that could determine the market’s direction. Indexes broke the gentle uptrends they carried into the end of 2020 with sharp declines Monday. Main indexes slid more than 1% and some sector indexes fared much worse.”
Investors should continue to use the stock market’s strength to buy breakouts. Be patient and wait for powerful breakouts instead of chasing extended stocks. If the new breakouts work, then add more exposure. But if breakouts start to fail, then you can back away.
In particular, focus on stocks with strong relative strength. Find them by using the relative strength line. The RS line measures a stock’s price performance vs. the S&P 500. If the stock is outperforming the broader market, then the RS line angles upward. If a stock is performing worse than the broad market, then the line will point lower.
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Dow Jones Stocks To Watch: Visa
Wednesday’s IBD Stock Of The Day, Visa, is just below the 5% buy zone past a 217.75 buy point in a flat base, according to IBD MarketSmith chart analysis. The buy zone goes up to 228.64.
Shares moved down 1.5% Tuesday and are about 1% below the entry.
Stocks In Or Near Buy Zones: JD, Nvidia, Pinterest, Target
Tuesday’s IBD Stock Of The Day, JD.com, broke out above a 92.87 buy point Tuesday with a 10.6% surge to 95.50. The 5% buy zone goes up to 97.51, so shares are squarely in buy range.
Early Tuesday, Stifel upgraded the stock from hold to buy with a 105 price target. Meanwhile, the New York Stock Exchange Tuesday reversed course, saying it will now not delist shares of China’s big three state-owned telecommunications operators.
Monday’s IBD Stock Of The Day, Nvidia, is trying to retake its key 50-day line, which has served as resistance since early December. The graphics-chip maker is moving up the right side of a flat base with a 587.76 buy point amid Tuesday’s 2.2% rally.
A real flaw is the stock’s weak RS line. Its RS line is far from its old highs, indicating sharp underperformance. The relative strength line measures a stock’s price performance vs. the broad market.
IBD SwingTrader stock Pinterest continued to rebound from its 10-week line Tuesday amid a 0.5% rise.
According to IBD Stock Checkup, Pinterest stock shows a 92 out of a perfect 99 IBD Composite Rating. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths.
IBD Leaderboard member Target is trying to break out above a 234.65 buy point in a flat base, according to IBD MarketSmith chart analysis. Shares briefly broke out above the new buy point, but closed below the buy point with a 1.5% gain.
Per Leaderboard commentary, “The previous pattern was a bit short for a flat base, unless you stretch the definition and count the 25 days since the Oct. 13 closing high. But now the stock has a legitimate flat base to work with. Shares are extended from the 10-week line. The new base is third stage.”
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IBD Leaderboard stock Tesla again neared record highs Tuesday with a 0.7% gain. Shares extended a win streak to eight sessions. The stock jumped over 2% after the close Tuesday when Morgan Stanley upped its price target to 810.
On Dec. 17, Tesla stock hit a record high at 744.49 and is about 1% off that all-time high. Shares have climbed as much as 59.8% from a 466 buy point in a cup with handle.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple is trying to rebound after triggering the 7%-8% loss-cutting rule during Monday’s sell-off. Shares fell more than 7% below a cup base’s 138.08 buy point that day, according to IBD MarketSmith chart analysis.
Shares bounced 1.2% Tuesday. In recent weeks, Apple shares have moved above aggressive entries at 125.49 and 122.09.
Apple is an IBD Leaderboard stock. Per Leaderboard commentary, “The alternate entry is in the lower half of the base but the RS line is improving. Apple nearly doubled from its breakout in April and it will be tough to replicate that run. The base is third stage, which is a reason to have lower expectations this time around.”
Software giant Microsoft moved up 0.1% Tuesday, as shares continue to approach a 228.22 buy point. The stock is finding support at its 50-day moving average line.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones futures.
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