The Dow Jones Industrial Average saw gains fade ahead of key testimony from Fed Chairman Jerome Powell. ferrari (RACE) buzzed past tesla (TSLA) to take the checkered flag as the first pick. Leaderboard Actions free market (MELI) tested a new point of purchase while Apple (AAPL) was a top blue chip.
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There were plenty of breakouts amid the early bullish action, although they were under pressure. hubbell (HUB), outdoor deckers (COVER) and Trane Technologies (TT) all entries tested.
The market is now preparing for the crisis Congressional testimony from Powell on Tuesday and Wednesday. The 10-year Treasury key yield reversed higher, rising about 2 basis points to 3.98%.
Stocks opened higher despite San Francisco Fed President Mary Daly saying “further policy tightening will likely be needed, sustained longer” at Princeton University on Saturday. She is currently a non-voting member of the Federal Open Market Committee.
Despite this, traders appear to be betting on two to three more quarter point rate hikes in the future. A significant rally or a painful fall could be ahead.
Nasdaq Fades as Small Caps Tumble
The Nasdaq saw its early gains fade and was mostly flat in afternoon trading. dexcom (DXCM), the market leader in continuous glucose monitoring devices for diabetics, was a notable move, falling about 8%.
The S&P 500 rose 0.1%. lumen technologies (LUMN) did well here, rallying around 6%. But the stock is trading around 3 per share.
S&P 500 sectors were mixed. Technology and communication services fared better, while materials lagged behind.
Small caps were taking a hit, with the Russell 2000 down 1.5%. Growth stocks saw gains for the day evaporate, with the Innovator IBD 50 ETF (FFTY) falling fractionally.
Dow Jones today: Apple shares rise amid bullish call
The Dow Jones industrial average saw early gains fade but remained slightly positive with a gain of 0.1%.
Apple shares had one of the best results, jumping around 2%. The stock is now pulling away from the 200-day moving average. Goldman Sachs started it as a buy with a target of 199. Analyst Michael Ng said gross profit growth over the next five years will be driven by its services business.
But Merck (MRK) was the best performer in the Dow Jones today. It jumped almost 4% with the publication of data on an experimental cholesterol pill.
dow inc (DOW) and Boeing (BA) were the worst laggards in the index.
Entry of sorting stock passes
MercadoLibre was also having a productive day, up around 3%. This saw him clear a buy point of 1,250.58.
On a weekly chart this qualifies as a flat bottom. On a daily chart it is more of a handle. It is perhaps best described as a base-on-base formation. It’s today’s IBD 50 Stocks to Watch selection.
MercadoLibre is the largest e-commerce company in Latin America. It is showing strength despite competition from amazon.com (AMZN).
Retail stocks have rallied since posting strong gains last month. Exposure to MELI on the leaderboard was increased to take advantage of the bullish move.
Tesla stock loses RACE amid Ferrari selection
Ferrari may have lost the first F1 Grand Prix of the year on Sunday, but it won in perhaps an even more important category.
The stock has been named the top pick in the US auto industry, ahead of Tesla stock, according to Morgan Stanley (MS).
Analyst Adam Jonas said the Italian luxury sports car firm outperformed the electric vehicle giant amid a “relatively bearish view on auto fundamentals.”
Ferrari has the longest order book, the highest earnings visibility and the highest pricing power of “any company we cover,” according to Jonas.
Jonas rates RACE shares as an outperformer with a target of 310. Ferrari shares rose slightly. It is trading above a handle cup entry of 270.45, MarketSmith analysis shows.
Tesla shares fell more than 1%, losing ground at the 200-day line. TSLA is up about 80% so far in 2023.
Outside Dow Jones: 3 Stock Test Buy Points
Hubbell briefly passed a handle cup entry of 256.53. The electrical equipment play made the play at low volume. Overall performance is strong, with an IBD Composite Rating of 93 out of 99.
Deckers Outdoor remains above a flat-based buy point of 433.41 on its weekly chart. The relative strength line reached new heights, a bullish sign. Both earnings and price performance are very strong.
Trane Technologies tested a flat base entry of 194.76 but is back below this level.
The RS line is also at new heights. Big Money has been a net buyer of TT of late, with the stock’s accumulation/distribution rating coming in at B+.
Follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
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