Dow Jones futures were little changed late Wednesday, along with S&P 500 futures and Nasdaq futures. The stock market rally had a quietly bullish day, with the Nasdaq holding at record highs while leaders and growth had solid sessions.
Snapchat parent Snap (SNAP) ran higher, breaking past resistance into a buy zone. Tesla (TSLA) jumped Wednesday, flashing a couple of early buy signals. But investors should at least kick the tires before buying Tesla stock.
Meanwhile, FedEx (FDX) earnings are on tap Thursday. FDX stock could potentially offer a buying opportunity if it rallies on earnings. So could rival UPS (UPS), which may have slightly better-looking chart. Expeditors International (EXPD), an air freight logistics firm, is near a buy point.
Bitcoin moved sideways for most of Wednesday, edging up above $34,800 in the morning before drifting down to about $33,000 in the evening. On Tuesday, the Bitcoin price crashed to below $29,000, a 2021 low, but rebounded to about $34,000 by Tuesday night.
Bitcoin has hit resistance around $40,000-$41,000 a few times over the past month. The cryptocurrency peaked at $64,829.14 mid-April, and has trended lower since early May.
So while the rebound is encouraging, it’s far too soon to say that the price of Bitcoin has bottomed.
Dow Jones Futures Today
Dow Jones futures were just above fair value. S&P 500 futures and Nasdaq 100 futures also rose less than 0.1%.
Stock Market Rally
The stock market rally had a mixed session on the major indexes. The Dow Jones Industrial Average fell 0.2% in Wednesday’s stock market trading. The S&P 500 index dipped 0.1%. The Nasdaq composite edged up 0.1%. The small-cap Russell 2000 rose 0.3%.
But there some decent gains among growth stocks and sector ETFs.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.8%, while the Innovator IBD Breakout Opportunities ETF (BOUT) climbed 0.6%. The iShares Expanded Tech-Software Sector ETF (IGV) closed just below break-even. The VanEck Vectors Semiconductor ETF (SMH) advanced 0.5%.
Snap stock popped 5.4% to 66.35, breaking out into a buy zone.
On the one hand, investors could look at the chart and see a 65.76 buy point from a handle buy point. But if you simply draw the line across the three times Snap stock hit resistance just below 66, getting above all those levels seemed like the true test, making 65.96 the more appropriate entry.
Of course, it’s a matter of 20 cents, and Snap stock is in buy range either way.
The relative strength line for Snap stock is still off highs but did hit its best levels in three months. The RS line, the blue line in the charts provided, tracks a stock’s performance vs. the S&P 500 index.
Snap was Wednesday’s IBD Stock Of The Day.
Tesla stock jumped 5.3% to 656.57, reclaiming its 50-day line for the first time since early May. Shares had been finding support around a slowly rising 200-day line. TSLA also hit or edged past a downward-sloping trend line. Volume was slightly above normal, the first time that’s happened in a month. Tesla is flashing an aggressive entry for the first time since April.
Still, there are reasons to be cautious.
The RS line for TSLA stock is at its best level since early May but hasn’t risen that much from its 2021 lows set earlier this month. Now, perhaps this is when Tesla takes off and really begins to power higher, outpacing the S&P 500 index consistently.
To be fair, Tesla stock was the best S&P 500 performer on Wednesday. And shares rose about 1% in extended trading.
Meanwhile, Tesla stock in recent weeks has lagged China EV rivals as Nio (NIO), Xpeng Motors (XPEV) and Li Auto (LI) which have rebounded considerably after melting down. Several traditional automakers, notably Ford (F), have been looking strong.
Finally, Tesla deliveries for the second quarter loom late next week. Much like an earnings report, Tesla sales could provide a catalyst for big gains or losses. Buying TSLA stock doesn’t offer a lot of time to build a cushion heading into deliveries.
If you do want to buy Tesla stock, you might start with a small position, adding to shares at a 780.89 early entry.
One alternative is to buy an ETF such as ARKK, which has been trending better than Tesla in recent weeks. ARKK provides exposure to a number of highly valued growth names, including Tesla stock of course, while minimizing stock-specific risks.
FedEx Earnings On Tap
FedEx earnings are due late Thursday. Analysts expect FedEx earnings to jump 98% to $5.01 a share, which would snap a three-quarter string of stronger gains. Revenue should climb 24% to $21.52 billion, which would be the fourth straight quarter of accelerating growth.
FedEx stock dipped 0.1% to 297.37 on Wednesday, just below its 50-day and 10-week line. Shares technically are in buy range from a 294.86 cup-with-handle buy point initially cleared in late April, but the 50-day/10-week line seems more relevant now. A bullish post-earnings rebound could offer a buying opportunity for FDX stock.
FDX Rivals Near Buys
UPS stock slipped 0.7% on Wednesday to 204.02, a hair above its 50-day line as it works on a flat base with a 219.69 buy point. UPS stock gapped up April 27 on strong earnings, and kept running for a time before consolidating above the prior base. The RS line for UPS stock looks a little stronger than FedEx’s.
EXPD stock edged down 0.5% to 125.13. After a strong advance, shares formed a three-weeks-tight in late May to early June, with a buy point of 126.67. Last week, EXPD stock fell 4% to its 10-week line. Shares have rebounded this week, also reclaiming the 21-day exponential moving average. Investors could buy EXPD stock off that rebound, then add to the position if it clears the three-weeks-tight. The RS line is right at highs.
Amazon stock was just below break-even Wednesday, closing at 3,503.82. AMZN stock is approaching a 3,554.10 cup base buy point, according to MarketSmith. But the e-commerce and cloud-computing giant has been consolidating since at least September. The RS line is at cup-base highs at least.
Amazon is still a FedEx customer, though they’ve pared back ties substantially over the past year. It’s shifted some business to UPS, while increasingly handling deliveries on its own.
Market Rally Analysis
The stock market rally was quiet Wednesday The major indexes were narrowly mixed with the Nasdaq inching higher after hitting a record high on Tuesday. Meanwhile, leading stocks and growth names generally showed positive action.
That’s not a bad combination, especially for active investors. There’s nothing wrong with a few tame market days, especially if your portfolio has solid gains. Flat overall market action would let stocks form handles or tight patterns after recent runs. It also could provide an opportunity for former leaders such as Tesla stock to perk up their RS lines.
Aside from FedEx and Nike (NKE) earnings Thursday night, there aren’t many big reports on tap until late next week. Those include the June jobs report, an OPEC+ meeting and Tesla deliveries.
The past several days have offered a number of buying opportunities, providing a chance to step up exposure to reorient portfolios after last week’s wild swings. As stocks set up, keep adding to your watch lists.
But until proven otherwise, be on watch for another wave of sector rotation or another spell of weak overall action.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
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