The stock market rally showed mixed action last week.
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Dow futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. Tesla (TSLA) and many more chip stocks worth watching.
The Nasdaq index hit a 2023 high last week, but ended up with small gains. The S&P 500 and Dow Jones fell for the week, while market breadth remained subdued.
The stock market rally showed mixed action last week. Also, not many stocks gave buy signals, and some fluctuated quickly.
But the volatile market rally is dangerous for investors. It’s still a good time to be mostly cash.
Tesla stock is trying to bounce back, but it is facing major resistance as it is building up the right side of the base.
Operation of electric vehicle related chips on semiconductors (on), Axcelis Technologies (ACLS) And Aehr Test Systems (ahr) are all trading near potential entries. while, advanced micro devices (AMD), L Research (LRCX) And from Broadcom (AVGO) are the chip giants near potential buying points.
Also pay attention to Sarepta Remedies (SRPT) on monday. SRPT stock has been halted throughout Friday’s session, as an advisory panel from the U.S. Food and Drug Administration debated whether to recommend the gene therapy Sarepta for patients with Duchenne muscular dystrophy. The committee voted narrowly 8-6 in favor of expedited approval. The Food and Drug Administration (FDA) does not have to follow up on the committee’s vote, but it does take it into account. SRPT stock fell 8.2% for the week through Thursday as FDA briefing documents indicated the treatment could be denied.
The video embedded in the article discussed the mixed messages of the market rally and analyzed the stock ON, Trade office (TTD) And Kinsale Capital (KNSL).
Dow jones futures today
Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
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 continued to trade tightly, with mixed action that looked weaker as Friday closed.
The Dow Jones Industrial Average fell 1.1% in trading last week. The S&P 500 fell 0.3%. The Nasdaq Composite Index rose 0.4%. Small Capital Russell 2000 fell 1%.
The 10-year Treasury yield rose 2 basis points to 3.46%, bouncing back on Friday.
US crude oil futures fell 1.8% to $70.04 a barrel last week, down 15.1% in four weeks.
Copper prices fell 4%. Gold declined by 0.1%, but has fallen by 1.1% over the past three days. Silver fell 6.8%.
Exchange Traded Funds
Among the ETFs, the Innovator IBD 50 ETF (fifty(up 0.3% last week, while the Innovator IBD Breakout Opportunities ETF)fit) decreased by 0.7%. iShares Expanded Technology and Software ETF (IGV) by 1.4%. VanEck Vectors Semiconductor Corporation (SMH) fell 1.2%%. AMD stock is a major SMH property, with Lam Research, Broadcom and On Semiconductor components as well.
Reflecting more speculative stories, the ARK Innovation ETF (ARK)ark(up 0.8% last week and the ARK Genomics ETF)ARKG) added 0.5%. Tesla stock is the number one stock ETF held by Ark Invest.
SPDR S&P Metals & Mining ETFs (XME) fell by 2.6%% last week. Global Infrastructure Development Fund X US (cradle) decreased by 1%. US Global Gates Foundation ETF (Planes) fell 1.3%. SPDR S&P Homebuilders ETF (XHB) closed just above the break-even point. Energy Defined Fund SPDR ETF (xle) slipped 2.1%. SPDR Health Care Sector Selection Fund (XLV) gave up just over 1%.
SPDR Financial Selection Fund (45) fell 1.3%.
SPDR S&P Regional Banking ETF (Creates) decreased by 5.2%. Backwest Bancorp (PACW) fell by 23% on Thursday after disclosing large losses in deposits in the week ending May 5th.
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Tesla stock
Tesla fell 1.2% to 167.98 last week, and continues to trade around the 21-day moving average. On Friday, stocks opened strongly but pulled back near the 50-day moving average.
If Tesla stock makes some upward progress, it will have 207.89 points to buy from a double bottom base. The base formed below the 200-day line, but the buy point is now above the 200-day long slip.
The TSLA bulls can spy aggressive entries, such as the 50-day line or perhaps a downward sloping trendline from the three-month top of the consolidation, but the stakes could be high, especially in the current market.
On Friday, Tesla CEO Elon Musk confirmed that Linda Iaccarino, who just stepped down as NBC Universal’s advertising chief, will be CEO of Twitter. Musk tweeted Thursday afternoon that he had found a new leader for the social site. This sent Tesla stock up until the close.
Yaccarino can help revive Twitter ad revenue. For TSLA stock investors, Musk may have more time to spend on Tesla, though he will still be responsible for Twitter’s products and technology.
Chip stock to watch
On Semiconductor is Tesla’s chip supplier. ON stock traded relatively tightly above the 50-day moving line during the three-month consolidation period. On Friday, On Semiconductor stock attempted to liquidate its recent trade, making an early entry, but the stock quickly erased the gains. Investors can still use the move above the May 8 high of 81.72 to initiate a trade.
This is probably a safer bet to buy shares ON on the breakout, with an 87.65 buy point.
Onsemi is a major customer of Aehr Test Systems chip test equipment. AEHR stock sold off heavily from late March to late April, but found support at the 200-day line. Shares have rallied since then, rising 2% to 27.67 last week. But Aehr stock is still below the 50-day line. A decisive retracement of the 50-day line would provide a strong entry for AEHR stock into an emerging new consolidation. As with ON stock, it’s probably safer to buy Aehr Test Systems from early entry versus a traditional point-of-purchase.
ACLS stock was a big chip leader in 2023, but it’s also been declining since late March. Shares of the EV-exposed chip equipment maker fell May 4 after first-quarter earnings, but closed lower. Axcelis stock returned to the 50-day line, where it reached the resistance level. The recovery of the 50-day line may also break the downward sloping trend line, which provides two reasons for early entry. ACLS stock has 136.48 consolidated buy points. Axcelis shares rose 1.6% to 122.11 for the week.
AMD stock rose 19% in the six sessions through May 11, providing an early entry on May 8 as it crossed the 50-day line. On Friday, shares fell 1.9 percent to 95.26 percent. Ideally, the chip giant would form a handle on its cup base, which currently has 102.53 buy points.
LRCX stock fell 0.5% to 527.10 for the week. The chip equipment giant boasts a 548.95-base buy point that has been trading above the 21-day and 50-day lines in the past few weeks. Investors can use 536.60 as an early entry. This is a typical four week narrow buy point on the weekly chart.
AVGO stock has 648.60 long points from a deep flat base of 7%, according to MarketSmith analysis. Shares rose 0.2% to 631.15, closing above the 50-day line. A decisive move above 50 days, possibly crossing the downward sloping trend line, would provide an early entry.
Market rally analysis
The stock market rally had a disappointing week. On Wednesday, the Nasdaq Composite reached its highest level in 2023, making further advances on Thursday and even early Friday. But Nasdaq fell on Friday, ending a modest weekly gain.
The S&P 500 faded to slim weekly losses, but held its 21-day streak. The Dow has tested its 50-day moving average, which has been a support area for major indices in recent weeks. Both indicators lost ground for the second week in a row.
Even the Nasdaq’s relative outperformance was largely due to Google’s parent company the alphabet (Google) and other huge stocks. The Nasdaq 100 rose 0.7% for the week.
First Trust Nasdaq 100 Equal Weighted Mutual Fund (QQEW) fell by 0.3%, which was the fourth consecutive weekly decline. But it still held out for 50 days.
Invesco S&P 500 Equal Weight Fund (RSP) lost 1.1%. The RSP is pegged below all of its moving averages.
Other metrics show poor market breadth, including advance/decline lines and new highs versus new lows.
Not many stocks offered buying opportunities. Many of the recent dividend spreads have been working, but not all of them. Other stocks, such as On Semiconductor, Trade Desk, and Fresh remains (latest), I was annoyed by the POIs but then faltered, especially the TTD. These stocks may continue to run, but progress is hard to come by.
The stock market continues to grapple with economic concerns, with recession risks now outweighing inflation. Banking crisis is not settled. The debt ceiling limit may be a bigger concern in the market. A US sovereign debt default is likely by early June if Congress and President Biden cannot reach an agreement.
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What are you doing now
The major averages haven’t had a good week, and they look better than the equally weighted ETFs and insider market items.
Investors should have relatively light exposure. If you have some positions running, you are likely to be more invested than others. But even then, there is no reason to be aggressive.
A sideways market is much more dangerous than a bear market. When blue-chip indices and stocks are crashing, cash is clearly king. But the volatile and range-bound market provides enough strength to attract investors, only to rip them off.
Investors should focus on preparing for the next strong uptrend. This bull market rally could come next week, next month, or next year. Despite the market woes and lack of stock to buy, a large number of stocks are being created or about to be. So have your watchlists ready.
Read the big picture every day to stay in sync with market trend, leading stocks and sectors.
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