Dow Jones futures were little changed Thursday night, along with S&P 500 futures and Nasdaq futures, with Evergrande default fears returning and Nike (NKE) and Costco earnings also in focus. The stock market rally had another vigorous session, with the S&P 500 joining the Nasdaq in reclaiming essential support while leading stocks showed decisive action.
Another big batch of top stocks offered buying opportunities Thursday.
Atkore (ATKR), Salesforce.com (CRM), Dell (DELL), Darden Restaurants (DRI), Accenture (ACN), Devon Energy (DVN), Square (SQ), Denbury (DEN), O’Reilly Auto (ORLY), Moderna (MRNA), MGM Resorts (MGM), Bank of America (BAC), Advanced Micro Devices (AMD), Idexx Labs (IDXX), SVB Financial (SIVB), Microsoft (MSFT) and Google parent Alphabet (GOOGL) were all actionable, following several others on Wednesday.
CRM stock, Dell, Darden Restaurants, Devon Energy, Denbury, O’Reilly, MGM, and SVB Financial were breakouts or reclaiming traditional buy points. AMD stock, Bank of America, Square, Atkore, Moderna, and Idexx Labs were early entries, from rebounds above the 50-day/10-week or trend line breaks — or both. Accenture, Microsoft, and Google stock are rebounding from the first tests of their 10-week lines.
Costco, Nike Earnings
Costco Wholesale (COST) and Nike earnings headlined essential overnight news. Costco and Nike earnings both beat views, with the former topping sales forecasts and the latter just missing.
Nike stock fell 4% in extended action, adding to losses as executives signaled supply-chain woes and margin pressures in the current quarter.
Microsoft stock and Google are on IBD Leaderboard. Microsoft and Google stock also are on IBD Long-Term Leaders, along with IDXX stock. Square stock and Dell are on SwingTrader. Google, Atkore and MRNA stock are on the IBD 50. Dell stock was Thursday’s IBD Stock Of The Day.
The video embedded in this article analyzes the stock market rally and reviews CRM stock, Atkore, and Denbury.
Dow Jones Futures Today
Dow Jones futures edged up vs. fair value. S&P 500 futures tilted higher while Nasdaq 100 futures lost a fraction.
On Thursday, a fundamental Evergrande unit made a debt payment to domestic bondholders, with the deal announced Wednesday, sparking the market rebound. But Evergrande apparently missed a Thursday deadline to pay interest on dollar-denominated debt, with the Chinese property giant not providing any clarity.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Stock Market Rally
The stock market rally started with modest gains Thursday and quickly gained steam, delivering solid payments for a second straight session.
The Dow Jones Industrial Average rose 1.5% in Thursday’s stock market trading. The S&P 500 index gained 1.2%. CRM stock was quickly the top Dow performer and a leading S&P 500 component, second only to Devon Energy.
The Nasdaq composite climbed 1%. The small-cap Russell 2000 popped at 1.8%.
The Innovator IBD 50 ETF (FFTY) jumped 2.6% among the best ETFs, hitting a record high. The Innovator IBD Breakout Opportunities ETF (BOUT) gained 1.9%. The iShares Expanded Tech-Software Sector ETF (IGV) rose 1.6%. MSFT stock and Salesforce are major IGV components. The VanEck Vectors Semiconductor ETF (SMH) rallied 1.3%, with AMD stock a key holding.
SPDR S&P Metals & Mining ETF (XME) advanced 1.2%, and the Global X U.S. Infrastructure Development ETF (PAVE) rebounded 1.8%. U.S. Global Jets ETF (JETS) popped 2.75%. SPDR S&P Homebuilders ETF (XHB) edged up 0.3%. The Energy Select SPDR ETF (XLE) shot up 3.5%, with DVN stock a holding. The Financial Select SPDR ETF (XLF) moved 2.45% higher, with BAC stock a significant component.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) rose 1% and ARK Genomics ETF (ARKG) 0.7%. SQ stock is a top ARK Invest holding.
Market Rally Analysis
The stock market rally took another big step Thursday toward regaining full strength. The Nasdaq, which reclaimed its 50-day line on Wednesday, moved above its 21-day line. The S&P 500 and Russell 2000 recovered their 50-day lines, while the Dow Jones moved close to that level. Arguably all of these indexes are at or above downward-sloping trend lines, suggesting that the market has been breaking its downtrend over the past few weeks.
A market rally is judged by the action of the major indexes and leading stocks. And leaders look robust. Leaders held up reasonably well during the pullback. There have been many bullish moves off crucial support levels, breaking trend lines or outright breakouts, with CRM stock, Dell, Atkore, Accenture, and Devon Energy just a few examples. Leadership breadth is also impressive, including chips, energy, building materials, banks, and software.
FFTY hitting a record high reflects the mix of bullish moves and high-fliers that barely paused
What To Do Now
This has been an excellent time to take advantage and buy top stocks from a variety of groups from bullish entries, significantly if you pared exposure substantially during the recent pullback. Of course, just because this article listed 17 actionable names doesn’t mean taking full positions in everything from AMD stock to Square.
The market rally has had a couple of good sessions, gaining momentum on the major indexes and leading stocks. But this rebound could run out of steam. If you’re going to be nimble with your buys, stay alert and ready to exit quickly as well.
Keep building those watchlists, focusing on leaders on the cusp of buy signals.