Dow futures rose slightly overnight, along with S&P 500 futures and Nasdaq futures, heading into the Thanksgiving holiday.
The stock market was positive for the second consecutive session. Fed officials see a slower rate hike “soon,” according to Fed minutes from the November meeting released Wednesday afternoon.
And led the Nasdaq, supported by a recovery Tesla (TSLA). All major indices are up solidly so far in this shortened holiday week. But a longer break for the market rally could be constructive.
Investors should be cautious about adding exposure given key technical resistance and notable economic reports ahead.
but, dexcom (DXCM), United Health (United nations) , Neurobiological Sciences (NBIX), Midpeace Holding (MEDP) and Shockwave Medical (SWAV) are five healthcare stocks showing interesting action.
DXCM and Neurocrine Biosciences stock are on the IBD Leaderboard, with MEDP stock on the leaderboard watch list. NBIX and Medpace stocks are in the IBD 50.
Dow jones futures today
Dow futures rose 0.1% against fair value. S&P 500 futures rose 0.2% and Nasdaq 100 futures rose 0.25%.
The 10-year Treasury yield fell 2 basis points, to 3.69%.
US stock markets will be closed on Thursday for the Thanksgiving holiday. On Friday, the US stock exchanges will close early at 1 p.m. ET. But other exchanges around the world will open normally on Thursday and Friday.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
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Stock market rise
The stock market rally saw some volatility on Wednesday, but extended gains, led by technology companies.
Initial jobless claims rose to their highest level in three months while continuing claims hit their best level in eight months. S&P Global’s Purchasing Managers’ Indexes for US manufacturing and services pointed to contraction.
The Fed minutes reinforced expectations of a 50 basis point rate hike at the December 14th meeting. Markets still favor another half-point move in February, but there is a good chance of a quarter-point hike.
The Dow Jones Industrial Average rose 0.3% in the stock trading session on Wednesday. The S&P 500 rose 0.6%, led by TSLA stock. The Nasdaq Composite rose 1%. Small Capital Russell 2000 rose 0.1%.
US crude oil prices fell 3.7 percent to $77.94 a barrel. Natural gas futures jumped 7.2%.
The 10-year Treasury yield fell 5 basis points, to 3.71%. The two-year Treasury yield, closely linked to expectations of a Fed rate hike, fell below 4.5%.
The US dollar fell significantly for the second consecutive session, and is back near its recent lows.
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Exchange Traded Funds
An ETF (IGV) in the iShares Expanded Tech-Software Sector (IGV) jumped 1.5%. The VanEck Vectors Semiconductor Index (SMH) rose 0.9%.
The SPDR S&P Metals & Mining ETF (XME) rose 0.3%. The US Global Jets ETF (JETS) rose 0.1%. The SPDR S&P Homebuilders ETF (XHB) jumped 0.5%. The Energy Select SPDR ETF (XLE) fell 1.1%. The SPDR Healthcare Sector Selection Fund (XLV) rose 0.4%. UN giant Dow Jones stock is XLV’s highest contract.
Reflecting speculative stock stories, ARK Innovation ETF (ARKK) rose 2.9% and ARK Genomics ETF (ARKG) rose 0.9%. TSLA stock is a major holding via Ark Invest’s ETF
Tesla stock jumped 7.8% to 183.20 on Wednesday, bouncing off Tuesday’s bear market lows as Citigroup upgraded the EV giant from sell to hold. TSLA stock is still down 19.5% so far this month and has nearly halved in 2022.
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Stocks to watch
Dexcom stock advanced 1.7% to 112.92, and found support at the 21-day moving average. DXCM stock has paused this month after its earnings surge on Oct. 28. Dexcom stock arguably has a long handle with 123.46 buy points from the seven-month consolidation. Investors can buy DXCM shares from an early entry farther from the 21-day line, possibly using Tuesday’s high of 113.88 as a specific buy point.
Medpace shares fell 1.3 percent to 218.81 on Wednesday. Shares have been consolidating near record highs since skyrocketing 38% on the Oct. 25 post-earnings earnings. Since then, MEDP stock has been forging a messy handle on a deep cup base that has been around for a year. While stocks saw some significant swings during the day, MEDP stock is currently on track to form a narrowing three-week pattern by Friday’s close. Investors may use the November 15th close of 226.57 as an early entry, above the bulk of recent trading.
NBIX shares fell 1.5% to 118.97. Stocks are consolidating near multi-year highs, extending from the breakout in October. Despite dipping to the 50-day line last week, Neurocrine stock has a tight three-week pattern and is on track to go for a fourth week. Technically, this contains 126.09 a buy, although investors may want to wait for quieter action.
Shockwave stock rose 4.7% to 264.06 on Wednesday, back above the 21-day line but hitting resistance at the 50-day line. After the failed breach in late October and the sell-off that continued through earnings, SWAV stock has rebounded over the past week. It will take more time to build a new base, but aggressive investors can use a strong move above 50 days as an early entry.
UN stock rose 1.3% to 529.71, bouncing back above the 50-day and 21-day lines after briefly breaking the 200-day line last week. UnitedHealth stock used to be the long-term leader for IBD and it still shares many characteristics. Investors can use the bounce from the 50-day line as either an early entry or a long-term leading entry. UN stock needs to form a new base after the breakout from the base of a cup with a handle last month failed quickly.
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Market rally analysis
A rally in the stock market added to Tuesday’s gains. The S&P 500 surpassed its intraday high on November 15 and closed within 1% of its 200-day line.
Russell 2000 came right up to the 200-day streak.
The Nasdaq added to Tuesday’s rebound from the 21-day moving average, although it is still below its November 15 high in the short term and well below the 200-day mark.
The Dow Jones Industrial Average came within 20 points of the intraday high of August 16th.
The S&P 500 moving decisively above its 200-day line – which roughly coincides with a year-old downtrend line – is a major test of the market rally.
A slew of economic releases could swing the Fed rate outlook and thus the stock market. On Wednesday, November 30, the JOLTS report for October will feature employment opportunities, and Fed Chairman Jerome Powell will speak later in the day. On Thursday, the Personal Consumption Expenditure Price Index, the Fed’s preferred measure of inflation, will be released, along with unemployment claims and the ISM manufacturing index. The November jobs report is due on Friday, November 2nd.
Ideally, the market would move sideways for a few days, allowing the 21-day line to at least catch up, heading into those economic reports.
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What are you doing now
The market rally showed some nice gains this week, with more stocks flashing buy signals in the past few days. Investors could have added more exposure as a result.
But they may want to be cautious about making significant new purchases with the S&P 500 hovering below the 200-day line and a lot of Fed economic uncertainty next week.
Also consider taking some partial profits on stocks that are going up quickly. Stocks have been making short-term advances amid a volatile uptrend and sector rotation.
However, investors should work diligently on their investment shopping lists, looking for actionable combinations and names across a variety of sectors.
Read the big picture every day to stay in sync with market trend, leading stocks and sectors.
Please follow Ed Carson on Twitter at @employee For stock market updates and more.
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