Dow Jones Futures: Market Rally Continues to Slide, 5 Shares Close to Buy Point, Tesla’s Earnings Web

Dow Jones futures opens Sunday night with S&P 500 futures and Nasdaq futures. The stock market rise suffered further losses last week, with the Nasdaq leading to declines as government interest rates continue to rise.




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What is your game plan for the coming week? Be wary of new acquisitions, focusing on leading sectors. The earnings season adds further uncertainty, with Tesla (TSLA) the headline of a great week of results.

Expedia (EXPE), Cheniere energy (LNG), Merck (MRK), Edwards Lifesciences (EW) and Check Point Software (CHKP) are five stocks close to buying points from relatively strong areas of the market. EXPE shares are part of the latest travel revival. LNG storage is a leader in the ever-hot energy sector. Merck Stock and Edwards Lifesciences are part of the healthy medical sector. The CHKP share is a leader in the field of cybersecurity, a technology pocket that holds up.

The Tesla stock, for its part, is working on a cup-with-handle buying point, but the chart is cluttered with earnings, which is just one of the many risks that are in focus.

Cheniere Energy and Tesla shares are on the IBD Leaderboard. Tesla is also on IBD 50. Check Point was Today’s IBD warehouse.

The video embedded in the article discusses this week’s market action and analyzes EXPE stocks, Cheniere Energy and Check Point Software.

Dow Jones Futures today

Dow Jones futures open at 18.00 ET on Sunday with S&P 500 futures and Nasdaq 100 futures.

The US stock markets are closed on April 15 until Good Friday. The stock markets in Europe, Australia and Hong Kong are closed on Friday and Monday.

The People’s Bank of China on Friday kept its one-year medium-term lending rate stable at 2.85%. Most economists had expected a cut in this key interest rate to bolster the economy amid widespread lockdowns.

Keep in mind that overnight trading in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.


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


Stock market rally

The stock market rise had some large daily and intraday movements in a short week, but the overall trend remains bearish. The Dow Jones Industrial Average fell 0.8% in last week’s trading session. The S&P 500 index fell 2.1 per cent. The Nasdaq composition lost 2.6 percent. Small-cap Russell 2000 achieved an increase of 0.5%.

The 10-year government interest rate rose by 12 basis points to 2.83%, reaching its highest level since the end of 2018.

US crude oil futures rose nearly 9% to $ 106.95 per share. barrel last week. The European Union is preparing plans to ban Russian crude oil, the New York Times reported on Thursday, a painful economic move that Germany in particular had opposed. The EU will reportedly not formally discuss a Russian crude oil ban before the final round of the French presidential vote on April 24. If the EU moves forward, crude oil prices could rise higher. The EU is even more dependent on Russian natural gas.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) fell 0.2% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 0.8%. iShares Expanded Tech-Software Sector ETF (IGV) fell 2.1%. VanEck Vectors Semiconductor ETF (SMH) slipped by 3.5% and threatened to fall below the 2022 lows.

The SPDR S&P Metals & Mining ETF (XME) rose 7.3% last week to a new high. Global X US Infrastructure Development ETF (PAVE) rose 1.4 percent. US Global Jets ETF (JETS) rose 8%. SPDR S&P Homebuilders ETF (XHB) closed just during break-even. Energy Select SPDR ETF (XLE) rose 0.4% and Financial Select SPDR ETF (XLF) retreated 2.6%. Health Care Select Sector SPDR Fund (XLV) lost 2.9%, but from all-time highs.

As a result of more speculative history stocks, the ARK Innovation ETF (ARKK) and the ARK Genomics ETF (ARKG) both fell 2.7% last week. The Tesla share remains number 1 across Ark Invest’s holdings.


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Shares to see

The EXPE stock rose 6.5% to 191.55 last week, regaining its 50-day line. The Expedia stock has a buy point of 204.08 cup-with-handles according to MarketSmith analysis. Investors could use a downward trend line from the top of the base to find an early entry around 195.

The Expedia stock has a three-digit price-to-earnings ratio. Highly valued PE stocks have not performed well in recent months. However, with Expedia’s earnings expected to increase by 364%, this may be an exception.

Expedia shares rose Wednesday-Thursday along with many other travel stocks on Delta Air Lines (DAL) earnings and guidance on Wednesday, with the airline saying travelers have not been phased by higher prices. Hilton Worldwide (HLT) and Marriott International (MAR) approved official buy points on Thursday, at least intraday, after crossing early entrances on Wednesday.

The relative strength of EXPE stocks is well positioned with consolidation highs, which is a potential concern. The Marriott and Hilton RS lines are at or near highlights. Relative strength lines, the blue lines in the accompanying charts, track a stock’s performance relative to the S&P 500 index.


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LNG stock

The LNG stock retreated 3.2% to 139.53 last week, but returned from its 21-day moving average and 10-week line. This is the second or possibly third 10-week line test for the Cheniere Energy stock, but investors can use it to start a small position or add a few more stocks. LNG storage may be in the process of forming a new base. The RS line is just below the highlights.

Cheniere Energy is expected to deliver massive profits in 2022 as demand for liquefied natural gas rises in the air around the world, particularly Europe. The crisis between Russia and Ukraine spurs further interest, although a Russian gas embargo is not on the table for now.

Merck stock

Merck stock fell 0.9% to 86.91 last week, pausing to rise steadily up the right side of a cup base. The MRK stock has a buying point of 91.50 at the moment, but could have control of a daily chart after Monday, giving it an entry of 89.58. Technically, the Merck stock now has a handle on a weekly chart, but it is barely visible. Ideally, Merck paper would form a longer, slightly deeper handle to shake out weak holders. But the RS line is already at its 52-week high.

EW stock

Edwards Lifesciences stock fell 3.15% to 120.02 last week. On a daily chart, the EW stock has a cup base with a buy point of 131.83. After Monday, it could have a handle with an official buy point of 125.21. That handle is already there on a weekly chart. The RS line for EW shares is also already at a record high.

Manufacturers of medical devices and products should see greater demand as electrical procedures return with declining Covid.

CHKP stock

The Check Point Software stock lost 4 cents to 142.78 last week, trading relatively close over the past few weeks. CHKP shares are in a consolidation that could be seen as a flat or flat cup-with-handle base. The cup-with-handle purchase point is 145.64. A downward trend line from the top in March would provide a slightly lower entry.

The current base followed a long consolidation that is likely to go back to the beginning of 2021.

Check Point’s earnings growth is small and is not expected to improve much. But CHKP shares have a low PE ratio. Palo Alto Networks (PANW), a faster-growing game with higher PE cyber security, also looks good.

Tesla shares

Tesla shares fell nearly 4% last week to 985, after losing more than 5% in the previous week. The advantage is that the handle now has a certain depth, which probably shakes out some weak holders after the TSLA share’s strong run at the end of March. But the chart is deep and messy. A longer handle, with somewhat tighter action, would allow the large averages to continue to catch up.

Tesla earnings fall due Wednesday night. Investors can expect strong year-on-year growth, but are likely to look ahead to Q2 and beyond.

Will the company discuss the impact of the Tesla Shanghai shutdown? The EV giant’s main factory has been shut down since March 28 due to the city’s strict Covid lockdowns, which do not appear to end any time soon. It will have a major impact on production in the second quarter, even with the factories in Berlin and Austin slowly rising.

Investors will also be looking for new tracks on the Tesla Cybertruck, Semi and other additional products. But they may not get it.

Meanwhile, Tesla CEO Elon Musk has bid on Twitter (TWTR) is also a potential headwind. If Musk buys Twitter, he can sell another share of TSLA shares to pay for it. And running another company could further distract Musk.


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Analysis of market rally

The stock market rise continues to grow more divided. The Nasdaq composite fell solidly after falling below its 50-day line in the previous week. The S&P 500, now clearly below its 200 days, also fell below its 50 days.

The broad raw material sector, medical and defense companies are leaders. Insurance companies and REITs are doing reasonably well. Travel names are on the way back again, with crude oil prices from their peak in March, and consumers are moving away from goods and willing to pay high prices.

But the Nasdaq has lost more than half of its gains in late March. Apple (AAPL) and Tesla stay OK, but they do not look very attractive either. As for other megacaps, Microsoft (MSFT), Nvidia (NVDA) and Google parent Alphabet (GOOGL) is approaching the recent lows. Amazon.com (AMZN) and Facebook parent Meta platforms (FB) has been fighting for several months.

An environment of rising prices is hard for highly valued growth stocks. TSLA population stands out, but this market has not treated solitary wolf growth play kindly.


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What should I do now

A fragmented market upswing, with some sectors rising and others falling, is a difficult trading environment. Investors need to keep their exposure light and focused on leading sectors. But do not get too concentrated in a particular area. An advantage of travel stocks coming back into play is that the sector is not correlated with the energy / commodities sector.

With commodity games, you can look for moving average withdrawals as chances to start or add to positions.

Depending on your trading style, you may want to take a partial profit on stocks that have risen 10% or 15% to ensure you get away from trading with a gain.

Do not be stubborn. If your stocks are not working, especially those in backlog sectors, reduce your losses and get out. You might think that big former growth leaders can no longer fall, but as long as a stock is above zero, it can still fall 100%.

Continue to build your watchlists. Opportunities can come and go quickly, while market conditions can change quickly. So you want to be ready.

The earnings season starts next week. Know when your holdings – or key rivals, supplies or customers – report results.

Read The Big Picture every day to stay in sync with the 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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