Dow Jones futures were higher early Wednesday, along with S&P 500 and Nasdaq futures. Stock market gains resumed on Tuesday, with the S&P 500 rising above 4,000.
Deere (DE) reported better-than-expected earnings early Wednesday. DE shares rallied sharply in pre-market trading, signaling an exit from overbought territory.
Deere’s earnings and guidance are important to a variety of agricultural stocks, including CF Industries (CF) and Archer-Daniels-Midland (ADM) as well as machine builders The caterpillar is persistent (CAT).
Energy stocks are performing well. Leader of the day Enphase energy (ENPH), a coal miner Peabody Energy (BTU), processor CVR energy (CVI), a natural gas producer EQT Corp. (EQT) and LNG fund Increase energy (EE) are all close to points of purchase.
EE shares came out on Wednesday, with Enphase moving back into buy territory. BTU shares, CVR Energy and EQT are eligible for action.
DE stock and Enphase Energy are on IBD’s leaderboard. EQT shares on SwingTrader. Deere’s stock is in the IBD 50. ENPH shares are in the IBD Big Cap 20. Peabody Energy is Tuesday’s IBD stock.
Riots at the Apple iPhone factory
Riots broke out at Apple’s biggest iPhone factory in China overnight, with hundreds of workers clashing with security. More than 100,000 workers have been forced to stay at the Foxconn campus in Zhengzhou for weeks due to Covid, many of whom have not been paid during that time.
Protests are escalating elsewhere amid renewed lockdowns and stricter restrictions across much of China as Covid cases rise.
Apple recently warned that Apple iPhone 14 Pro models are in short supply due to the Foxconn factory in Zhengzhou.
Apple shares were slightly lower early Wednesday. On Tuesday, AAPL rose 1.5% to 150.18, finding support near its 50-day line but still below its 200-day moving average.
Today’s Dow Jones Futures
Dow Jones futures were above fair value. S&P 500 futures rose about 0.1%. Nasdaq 100 futures rose 0.2%, helped by an update from Citigroup. Tesla (TSLA).
The 10-year Treasury yield rose 2 basis points to 3.78%.
Crude oil futures fell 3%. Natural gas prices in the US rose by 7 percent. On Tuesday, Europe released data on natural price caps for the year starting Jan. 1, more than double the current level.
New Zealand’s central bank raised rates by a record 75 basis points, as expected.
The minutes of the Fed’s November meeting will be released on Wednesday. Ahead of the open, investors will be looking at weekly jobless claims, October durable goods orders, and more. gets
Keep in mind that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Join IBD’s experts as they analyze stocks in action during the stock market rally on IBD Live
Stock market rally
The stock market rally opened mixed on Tuesday, but made broad-based gains as it neared session highs.
The Dow Jones Industrial Average rose 1.2% in Tuesday’s trading. The S&P 500 and Nasdaq composite both rose about 1.4%. The small Russell 2000 rose 1.1%.
The 10-year Treasury yield fell by 7 basis points to 3.76%. But the two-year Treasury yield, closely tied to Fed policy, was around 4.53%.
The dollar, which rose in the previous three sessions, fell again on Wednesday. Since the end of September, especially since the beginning of November, the blue currency has fallen significantly.
U.S. crude oil prices rose 1.1% to $80.95 a barrel after Monday’s brief decline. Gasoline futures rose 4.3%, good news for refiners. Natural gas futures edged higher after falling more than 2% on the day.
Among the top ETFs, the Innovator IBD 50 ETF ( FFTY ) rose 3.4%, helped by a number of energy and metals stocks. The iShares Expanded Tech-Software Sector ETF ( IGV ) rose 1.8%. The VanEck Vectors Semiconductor ETF ( SMH ) rose 2.9%.
The SPDR S&P Metals & Mining ETF ( XME ) rose 3.2%, while the Global X US Infrastructure Development ETF ( PAVE ) rose 1.3%. The SPDR S&P Homebuilders ETF ( XHB ) rose 1.9%. The Energy Select SPDR ETF ( XLE ) rose 3.1%. The health care select SPDR fund ( XLV ) rose 0.9% to a seven-month high.
ARK Innovation ( ARKK ) gained 0.3% and ARK Genomics ( ARKG ) fell 0.4%, showing stocks with speculative events.
Five of the best Chinese stocks to watch right now
Energy reserves close to purchase points
Enphase shares rose 4% to 320.44, above a buy point with a 316.97 cup handle for the first time. However, the last three times ENPH stocks rose to these areas, it fell. Enphase shares have large daily fluctuations. Therefore, investors may find that ENPH stock is quickly returning to its rising 21-day moving average.
Some other LNG funds are showing strength Flex LNG (FLNG) exit and Cheniere Energy (LNG) is recovering its 50-day line.
BTU shares rose 6.7% to 29.62, just below a seven-month consolidation buy point of 30.15. Tuesday’s move broke the handle’s trend line and suggested an early entry. However, BTU stock is 9.3% above its 21-day line and 17% above its 50-day. The handle follows strong earnings from Peabody Energy.
Shares of CVR Energy rose 4.85% to 40.85, above a previous buy point of 39.81, which could still be considered valid. CVI stock also has a three-week pattern with a record of 42.31. A break above 41.31 could suggest an early entry into that tight pattern.
Shares of EQT are up nearly 6% at 43.79, breaking above the 50-day line after rebounding from Monday’s 200-day high. Stocks break the downtrend line. The official buying point is 52.07.
EE shares rose 9.6% to 30, with a buy point of 28.49 cups on above-average volume, according to MarketSmith analysis. That move to a record close wiped out much of Excelerate Energy’s trading run before its April IPO. EE shares were earlier on Friday and Monday, although trading was below normal on those days. Excelerate is now slightly extended from the buy zone and well extended from the 21-day line.
Market rally analysis
The stock market rally continues to show constructive activity, trading in a narrow range after a modest pullback and support last week. Major indexes rebounded from Monday’s losses on Tuesday.
The S&P 500 broke above its 10-day line at 4,000 as it moved toward its 200-day line. Although not above the intraday high of November 15, it was the index’s best close in more than two months.
50 day line simply The S&P 500 started to move higher.
The Russell 2000 is very close to its 200th day. The S&P MidCap 400, which broke its 200-day line last week, posted additional gains.
The Dow Jones Industrial Average climbed above 34,000 for the first time in three months, just below the August 16 peak. Lagging Nasdaq found support at its 21-day line, just above the 50-day, but failed to recover all of Monday’s losses.
All of these indices work on levers, with the Dow lurking above. Most stocks track the action of major indexes, so many handles are formed in stocks near buy points. A slightly longer break, perhaps until key economic reports later next week, will allow the moving averages to catch up.
Time the market with the IBD ETF Market Strategy
What to do now
Until the S&P 500 breaks above its 200-day line, investors may not want much exposure right now. With the Thanksgiving holiday trade-off and key economic data from the Fed next week, the market rally could be massive in the short term.
This can help you set handles and take moving averages for stocks from different sectors. Investors should create their own checklists. It’s certainly time to look beyond traditional tech growth stocks, which are now largely lagging behind.
Given that most leaders are extended from moving averages like Excelerate Energy or BTU stock, it’s more important to look for early entries and act quickly.
Read The Big Picture daily to stay in sync with market direction and leading stocks and sectors.
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