Wednesday, January 26, 2022

Important support for market rally again; 5 Stocks Near Buy Points

Dow Jones futures will open on Sunday evening along with S&P 500 futures and Nasdaq futures. The stock market rally is intensifying in line with last week’s short-term rally.


The stock market rally stands still, but is hurt and faltering. Key averages are testing key support areas, although the Nasdaq has held its 200-day line so far.

The Nasdaq has lagged behind the S&P 500 index since February, with underperformance increasing over the past two months.

Apple (AAPL) Stock and Apple iPhone Chipmaker Qualcomm (QCOM) are two growth stocks that hold relatively well, while Tesla (TSLA) rival China Xpeng (XPEV) is on early entry. Meanwhile, DE stock is getting installed, while SM Energy (SM) broke on Friday.

Goldman Sachs (GS), Charles Schwab (SCHW) and signature bank (SBNY) report before market opening on Tuesday. GS stock fell below its 200-day moving average on Friday, although it is technically in a base. Schwab stock has been increased. SBNY stock is at the edge of the buy zone.

Xpeng stock is on IBD 50 list. deere (DE) Friday was the IBD stock of the day.

A video embedded in this article discusses volatile market action as well as SM stock, on semiconductor (on) and Deere.

dow jones futures today

The Dow Jones futures opened at 6 p.m. ET on Sunday, along with the S&P 500 futures and Nasdaq 100 futures.

US markets will remain closed on Monday to mark the Martin Luther King Jr holiday, although other exchanges around the world will remain open.

Remember that overnight action in Dow futures and elsewhere does not necessarily entail actual trading in the next regular stock market session.

Join IBD experts as they analyze stock market rally actionable stocks on IBD Live

coronavirus news

Worldwide coronavirus cases reached 323.86 million. Covid-19 deaths topped 5.54 million.

With over 871,000 deaths, coronavirus cases in the US have risen to 65.97 million.

While cases are hitting new highs around the world, new infections in the UK and New York seem to be peaking, following the pattern in South Africa. Hospitalizations are taking place, but not as much as in the previous Covid waves.

stock market rally

The stock market’s rally traded up and down near key support levels over the past week, eventually closing in on a modestly solid low.

The Dow Jones Industrial Average fell 0.9% in last week’s stock market trading. The S&P 500 Index and Nasdaq Composite dropped 0.3%. The small-cap Russell 2000 offered a 0.8% discount.

The 10-year Treasury yield rose 1 basis point to 1.77%, having rebounded on Friday after pulling back marginally for three straight sessions. On Tuesday, it reached a 23-month high of 1.81% intraday. US crude oil futures rose more than 6% to $83.82 a barrel for the week.


Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.3% last week, but after hitting a 52-week low on Monday. The Innovator IBD Breakout Opportunities ETF (BOUT) climbed 1%. The iShares Extended Tech-Software Sector ETF (IGV) dropped 1.6%. The VanEck Vector Semiconductor ETF (SMH) popped 3.4%, with Qualcomm stock being a notable holding.

The SPDR S&P Metals & Mining ETF (XME) climbed 2% last week. The Global X US Infrastructure Development ETF (PAVE) rallied 1.3%. The US Global Jets ETF (JETS) gained 0.1%. The SPDR S&P Homebuilders ETF (XHB) retreated 1%. The Energy Select SPDR ETF (XLE) jumped 5.2% last week after rising 10.5%. The Financial Select SPDR ETF (XLF) retreated about 1%, but many banks were having strong weeks. Health Care Select Sector SPDR Fund (XLV) dropped 0.2%.

Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) and the ARK Genomics ETF (ARKG) both fell nearly 5% to 19-month lows. 1 holding in ARK Invest’s ETF, but Kathy Wood has slashed her TSLA stake in recent months, pushing investments in hard-hitting, highly valued growth.

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apple stock

Apple stock rose 0.5% to 173.07 last week. On Monday, January 10, AAPL stock rebounded from its 10-week line for the first time since its November breakout. Investors can use moves above Thursday’s high of 176.62 as a place to buy Apple stock from a 10-week line bounce. This would push the iPhone maker above its 10-day and 21-day lines.

Apple doesn’t have a base per se, but has been going strong over the past several weeks, with the relative strength line hovering around record highs. Investors can consider this recent trade as a messy flat basis, with the buy point around 181-182.

qualcomm stock

QCOM stock rose 4.6% to 188.69 last week. Shares have generally found support on their 21-day line since mid-December, but rebounded from their 50-day line on January 10. The RS line is at a new high for Qualcomm stock, a particularly powerful performance for the growth stock.

QCOM stock has been consolidating in a chaotic manner since mid-November, although trading looks tight on a weekly basis. Officially, Qualcomm stock has a three-week tight entry of 193.68, just above the top of the broader consolidation. Investors can look for a “draw the line” entry that is slightly lower than that. Alternatively, another trial of the 50-day/10-week line, which could correspond to a 21-day, could be another way for Qualcomm to enter.

The consolidation follows two big moves by QCOM stock over the past two months. Shares tumbled on earnings, then two weeks later CEO Cristiano Amon spoke of a bright, post-Apple future for his company.

The wireless chip giant is likely to see its iPhone business fade in the coming years as Apple designs more chips in-house. But Qualcomm aims to grow its total addressable market from $100 billion today to nearly $700 billion over the next decade, connecting Internet devices with augmented reality glasses to automobiles.

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expeng stock

Xpeng gained 10% to 49.69 last week while rebounding from its 200-day line and reclaiming its 50-day line. Shares of China EV startups that have passed NIO (NIO) and lee auto (LI) In Monthly Delivery, there is an official buy point of 56.55 as of December 1st from a consolidation. But XPEV stock crossed a trendline on Friday that’s not too far from its 50-day line. The shares also have 51.50 as short term resistance.

For Tesla stock, the EV giant rose 2.2% to 1,049.61 in a wild week, just below its 50-day line but slightly above its 10-week line. TSLA stock has a buy point of slightly over 1,200.

SM Energy Stock

SM stock rose nearly 12% last week to 36.64, according to MarketSmith analysis, clearing a 35.82 cup-with-handle buy point on Friday. Although the sound was mild. The RS line for SM stock is closer to the higher, reflecting its strong performance versus the S&P 500. But it is a bit in oily patches. How Long Can Oil Prices and Energy Stocks Run Higher?

deere stock

Deere stock rose 0.2% to 379.56 last week. Shares fell marginally on Friday, giving the new handle a less wedged look. The handle buy point in the base going back to the beginning of September is 386.65. But DE stock has been consolidating since last May or March. After doubling in FY21 earnings, analysts see solid growth for the farm equipment giant in 2022 and 2023.

market rally analysis

The stock market rebounded from Monday, January 17, with lower resistance on Wednesday, with major indices falling on Thursday and Friday morning. But the Nasdaq, which again lowered its 200-day line on Friday, led a partial rebound.

The Dow Jones tested its 50-day line on Friday, with the S&P 500 falling below that key level. The Russell 2000 turned lower on Monday, threatening to break below a one-year consolidation.

Major indices are not far from their January 10 lows. A close below those levels could mark the end of a market rally, which is already under pressure. Moreover, after a vicious sell-off in the past week, the major indices finally did not give up much ground in this latest week.

The stock market rally could still use a solid win. But, like a team in a best-of-seven series going 3-0 or 3-1 down, a “win” won’t solve market troubles. Beyond rebounding above or behind the major moving averages, the major index needs to retest Wednesday’s highs. For Nasdaq, the 50-day line and its January 4 peak will be further tests.

The Nasdaq Composite has been trailing the S&P 500 for 11 months. Apple stock, despite megacaps like Tesla, Microsoft (MSFT), NVIDIA (NVDA) and Google Parent Alphabet (GOOGL), which, at least until recently, outperformed all benchmark indices. It’s a reflection of how weak the average growth stock has been. Highly valuable growth has been hit, especially over the past few months, as FFTY, IGV, and ARKK and ARKG shows in particular.

With the Federal Reserve rising sharply and Treasury yields rising, growth stocks could continue to struggle.

Energy stocks remain strong, along with most financials. but friday JPMorgan Chase (JPM) The sell-off is a reminder that earnings season is back, adding to a number of risks for individual stocks, sectors and the broader market.

200-Day Average: Last Line of Support?

What do we do now

Investors should be on the defensive. Major indices are closer to breakeven than they are to breakout. Growth and tech stocks just aren’t working, except for a few chip names like Apple and Qualcomm.

Don’t be in a hurry to jump into the next boom in development. After several heads are faked, investors should wait for real strength, not another dead-cat boom.

The energy and financial sectors continue to lead, along with fertilizer and a few other cyclical names. But don’t concentrate too much here. A reversal in these areas would not be surprising, either by changes in underlying bond or commodity prices or by dragging everything down in the broader stock market.

It’s time to make a watchlist. Look for stocks that show strong relative strength and have key support levels. Several machinery, chemical and industrial stocks are taking shape including Deere. Keep iterating on your lists. some stocks, such as home depot (HD), looked strong and stable two weeks ago but is faltering now. Meanwhile, some other names, such as Xpeng and Deere, are showing some strength.

Read The Big Picture every day to learn the direction of the market and keep up with key stocks and sectors.

Please follow Ed Carson on Twitter @ibd_ecarson For stock market updates and much more.

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