The Dow Jones Industrial Average saw its gains evaporate ahead of testimony from Fed Chairman Jerome Powell. Ferrari (RACE) zoomed past You’re here (TSLA) to take the checkered flag as the first choice. Ranking Stock MercadoLibre (MELI) tested a new point of purchase while Apple (AAPL) was a blue chip top.
There were several breakouts amid early bullish action, but the moves faded. Hubbell (HUBB), Outdoor bridge workers (BRIDGE) And Trane Technology (TT) all inputs tested.
The market is now gearing up for Powell’s congressional testimony on Tuesday and Wednesday. The 10-year Treasury yield reversed higher, rising just over 1 basis point to 3.98%.
Stocks opened higher despite San Francisco Fed President Mary Daly saying “further policy tightening, held longer, will likely be needed” at Princeton University on Saturday. She is not currently a voting member of the Federal Open Market Committee.
Traders seem to be betting on two or three more quarter-point rate hikes in this cycle. A significant rally in equities or a painful decline could loom, largely depending on the Fed’s targets.
Nasdaq fades as small caps plunge
The Nasdaq fell and a late rally attempt failed. It closed down 0.1%. Dexcom (DXCM), a market leader in continuous glucose monitoring devices for diabetics, was a notable driver, plunging 7.9%.
The S&P 500 managed to dig in its claws for a gain of 0.1%. Lumen Technologies (LUMN) did well here, up 4.1%. But the stock trades at just 3.30 a share, meaning it’s not worthy of consideration for Investors can SLIM.
The S&P 500 sectors ended the day on a mixed note. Technology and communication services fared best, while materials and consumer discretionary lagged.
Small caps were beaten by the bears, with the Russell 2000 falling 1.5%. Growth stocks saw their gains plummet for the day, with the Innovator IBD 50 ETF (FFTY) split closure.
Dow Jones Today: Apple Stock Jumps Amid Bullish Call
The Dow Jones Industrial Average briefly turned negative late in the session before closing with a modest gain of 0.1%.
Apple stock was one of the best performers, up 1.9%. The stock is now moving away from the 200-day moving average.
A comeback for AAPL continued to bear fruit after Goldman Sachs launched it as a buy with a target of 199. Analyst Michael Ng said gross profit growth over the next five years will be driven through its service activity.
But Merck (M.K.R.) was the best performer on the Dow Jones today. It jumped 3.9% on the release of data on an experimental cholesterol pill.
Dow Inc. (DOW), Intel (INTC) And Boeing (BA) were among the index’s worst laggards. The DOW fell 2.1%, INTC 1.6% and BA 1.5%.
Ranking Stock Passes Entry
MercadoLibre also had a productive day, rising 2.4%. This resulted in a buy point of 1,250.58. Importantly, it held above the level despite the late pullback.
On a weekly chart, this qualifies as a flat base. On a daily chart, it’s more of a handful. Perhaps he is best described as a base-to-base training.
MELI’s bullish action saw it given the green light as today IBD 50 Stocks to Watch selection. MercadoLibre is the largest e-commerce company in Latin America. It is showing solidity despite competition from Amazon.co.uk (AMZN).
The retail stock has been rising since posting strong earnings last month. The exposure to MELI was increased in the ranking to take advantage of the bullish movement.
Tesla Stock Loses RACE Amid Ferrari Pick
Ferrari may have lost in the first F1 Grand Prix of the year on Sunday, but they won in a possibly even more important category.
The stock has been Named US Auto Industry’s Top Stock Pickahead of Tesla stock, according to Morgan Stanley (MS).
Analyst Adam Jonas said the Italian luxury sports car company overtook the electric vehicle giant in a “relatively bearish view on automotive fundamentals”.
Ferrari has the longest backlog, the most earnings visibility and the most pricing power of “any company we cover”, according to Jonas.
Jonas notes that RACE stock is outperforming with a target of 310. Ferrari stock ended the day down 0.4%. Nevertheless, it is trading close to an entry of 270.45 cup with handle, MarketSmith analysis shows.
Tesla stock fell 2%, losing ground at the 200-day line. TSLA is up over 79% so far in 2023.
Outside of Dow Jones: 3 point buy stock test
With the market now back in a confirmed uptrend, it is essential to follow the breakouts. Hubbell briefly topped a cup entry with a handle of 256.53 but reversed lower. It closed the session down 0.1%.
Electrical equipment play made the move at low volume. Overall performance is solid, with its IBD composite rating of 93 out of 99.
Deckers Outdoor closed just above a fixed base buy point of 433.41 on its weekly chart, posting a gain of 1.1%. The relative strength line has reached new highs, a bullish sign. Earnings and price performance are both very strong.
Trane Technologies tested a flat-based entry of 194.76 but reversed below that level. It ended the session down 1.1%.
The RS line is also at new heights. Big Money has been a net buyer of TT lately, stocks Accumulation/distribution rating reaching B+.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more growth stock analysis.
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