Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures, rallied late Monday, as the price of Bitcoin plunged before slashing losses. Apple stock is approaching a new buy point, while Nio surged to new highs. Tesla dived amid a potential climax top.
The stock market rally fell from record highs Monday amid moderate declines in the major stock indexes. The Dow Jones Industrial Average eased 0.3%, or 89 points, while the S&P 500 slid 0.7%. The tech-heavy Nasdaq composite declined 1.25%.
Among the Dow Jones leaders, Apple (AAPL) sold off 2.3%, while Microsoft (MSFT) lost 1%. Meanwhile, Amazon.com (AMZN), Facebook (FB) and Twitter (TWTR) all fell sharply. Amazon stock declined 2.15%. Facebook dropped 4% and Twitter tumbled 6.4%.
However, chip giants Advanced Micro Devices (AMD) and Nvidia (NVDA) advanced 2.8% and 2.6%, respectively. AMD hit a new high, while Nvidia is approaching a new buy point, according to IBD MarketSmith chart analysis.
Tesla (TSLA) dived nearly 8%, as it flashes several signs of a potential climax top. Chinese rival Nio (NIO) surged 6.4% to hit record highs after unveiling its new sedan at its Annual Nio Day.
Stocks in or near buy zones in the current stock market rally are Chipotle Mexican Grill (CMG), Lululemon (LULU) and Tractor Supply (TSCO).
Apple, Chipotle, Microsoft and Tesla are IBD Leaderboard stocks. Lululemon and Tractor Supply were featured in this week’s Stocks Near A Buy Zone.
Dow Jones Futures Today
Late Monday, Dow Jones futures and S&P 500 futures traded up 0.1% vs. fair value. Nasdaq 100 futures moved up 0.15%. Remember that trading in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Among exchange traded funds, Innovator IBD 50 (FFTY) rallied 1% Monday. The Nasdaq 100-linked Invesco QQQ Trust ETF (QQQ) traded down 1.45%. Meanwhile, the SPDR S&P 500 ETF (SPY) descended 0.7%.
U.S. Stock Market Today Overview
Last Update: 4:26 PM ET 1/11/2021
According to the Worldometer data tracker, the cumulative number of confirmed coronavirus cases in the U.S. topped 22.9 million on Monday. Total virus-related deaths rose past 383,000.
The cumulative total of worldwide Covid-19 cases confirmed since the start of the outbreak topped 90.9 million Monday, with more than 1.9 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 sees stocks just off their record highs.
Friday’s Big Picture commented, “The Nasdaq led Friday’s action with a 1.1% advance. A 2.4% gain for the week hammered home the point that big and megacap techs are not ready yet to roll over.”
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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The price of Bitcoin plunged as much as 23% Monday to hit a low of $30,305 before slashing losses. Bitcoin traded around $35,000 late Monday, more than 15% off its lows, according to Coindesk. The Grayscale Bitcoin Trust (GBTC) tumbled 15.85% and is more than 20% off its 52-week high.
Bitcoin set an all-time high at $41,962 on Friday. Year to date, Bitcoin is up about 10%.
Dow Jones Stocks To Watch: Boeing Slides
Boeing was one of the worst performers on the Dow 30 Monday. Shares fell 1.5% after a Boeing 737-500 jet flown by Indonesian carrier Sriwijaya Air crashed in the sea shortly after takeoff from Jakarta with 62 people on board.
Boeing stock is testing its 50-day moving average line and is about 40% off its 52-week high.
Stocks In Or Near Buy Zones: Chipotle, Lululemon, Tractor Supply
IBD Leaderboard member Chipotle Mexican Grill regained its 1,366.76 double-bottom buy point last week as it bounced off its 50-day line. Shares edged 0.1% higher Monday. The 5% buy zone goes up to 1,435.10.
According to IBD Stock Checkup, Chipotle stock shows an 81 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.
Lululemon moved down 1% in a volatile session after the company improved its adjusted earnings and revenue guidance for the fourth quarter. Lululemon expects Q4 earnings and sales to come in “at the high end of its prior range of expectations.”
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.
Tractor Supply is within striking distance of a 150.79 buy point in a cup with handle. Shares briefly topped the entry before closing below the buy point amid Monday’s slight gain.
Chip Giants AMD, Nvidia Lead
AMD is well extended from an 88.82 buy point in a double bottom amid Monday’s 2.8% rise.
IBD Leaderboard stock Nvidia rallied 2.6% after Chinese electric-car maker Nio selected Nvidia automated driving technology for its new Nio ET7.
According to Leaderboard commentary, “Nvidia may finally be forming the right side of its base, after weeks of flat action. The stock is still forming a flat base.” The new buy point is 587.76.
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Chinese Tesla rival Nio surged as much as 13% before slashing gains to 6.4% Monday after the company unveiled its new Nio ET7.
Shares tumbled nearly 5% late Monday before paring losses after the company announced it will sell $1.3 billion of convertible senior notes. The Chinese carmaker said it plans to use net proceeds from the notes offering mainly for general corporate purposes.
The Nio ET7 will launch in Q1 2022. The ET7 will come with advanced driver-assist capabilities, including Lidar functionality and an Nvidia-powered supercomputer. Nio claims it’ll have far-greater computing power and camera resolution than Tesla Full Self Driving.
Shares followed through on Friday’s breakout move above a 57.30 buy point in a short cup base. Shares are already extended past the buy zone.
Tesla Stock In Climax Top?
IBD Leaderboard stock Tesla dived from record highs Monday, falling nearly 8%. Shares snapped an 11-day win streak.
Check out Friday’s IBD Stock Of The Day for a detailed analysis of Tesla’s potential climax top, signaling that investors might want to take some profits.
On Friday, Tesla stock hit a record high at 884.49. Shares climbed as much as 88% from a 466 buy point in a cup with handle.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple fell 2.3% Monday. Shares are forming a base with a new buy point at 138.89, according to IBD MarketSmith chart analysis.
In recent weeks, Apple shares have moved above aggressive entries at 125.49 and 122.09.
Software giant Microsoft moved down 1% Monday, as it fights to hold above its 50-day line. Shares continue to trace a new base with a 228.22 buy point.
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