The Dow Jones Industrial Average slipped lower Wednesday as the stock market took a pause. The controversial Donald Trump SPAC Digital World Acquisition (DWAC) rocketed for the second day in a row. Apple (AAPL) was the top blue chip as it hit another record high. Stitch Fix (SFIX) was diving on earnings.
The stock market may have been taking a breather, but that did not stop a clutch of stocks breaking out. Century Communities (CCS), ZIM Integrated Shipping Services (ZIM) and insurance play Brown & Brown (BRO) all tested entries. Meanwhile, an EV play is offering a buying opportunity.
Nasdaq Gains As Growth Stocks Shine
The tech-heavy Nasdaq was faring best out of the major indexes, rising 0.4%. DocuSign (DOCU) was a top performer, rising 11% as it tries to recover from a painful beatdown.
U.S. Stock Market Today Overview
Last Update: 2:46 PM ET 12/8/2021
The S&P 500 sectors were mixed, with communication services and health rising most. Financials and consumer staples were the worst laggards.
Small caps were rising, with the Russell 2000 up 0.8%. It is back above its 200-day moving average but has work to do to regain its 50-day line.
Growth stocks were making the best gains. The Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, rose 0.9%.
Dow Jones Today: Apple Stock Leads As Index Lags
The Dow Jones Industrial Average was lagging the other major indexes, falling about 0.1%. It was giving up nearly 30 points as it took a breather.
Apple stock was once again leading the blue chip index. It pushed top another all-time high as it popped 3.5%.
AAPL stock is currently extended past a cup-with-handle entry of 153.27. The relative strength line is also spiking.
While it has some way to go to hit its 20% profit target, the relative strength still looks bullish.
Donald Trump SPAC Rockets Again
The Donald Trump SPAC Digital World Acquisition popped about 12% higher Wednesday, building on Tuesday’s spike of nearly 17%. This helped it charge further clear of its short-term moving averages.
The media stock is bouncing back after dipping on the news federal regulators are now investigating the SPAC deal.
Digital World Acquisition disclosed in a filing that it is being probed by the SEC and FINRA. The firm is looking to merge with Trump Media & Technology Group, which named Republican Congressman Devin Nunes as its new CEO. Devin will resign and take over the CEO post in January.
The probe comes after Sen. Elizabeth Warren sent a letter to the SEC calling on the regulator to investigate the deal.
She questioned whether the company and Trump “may have committed securities violations by holding private and undisclosed discussions about the merger as early as May 2021, while omitting this information in U.S. Securities and Exchange Commission (SEC) filing and other public statements.”
The firm is looking to launch a social media site called Truth Social and a subscription-based video-on-demand service called TMTG+.
DWAC stock remains well off its all-time high of high of 175. It is up bigly for the year, however, rising nearly 500% so far in 2021.
This EV Play Offers Entry
The Global X Lithium & Battery Tech ETF (LIT) is offering up an alternate buy point as it rebounds off its 50-day moving average.
The fund offers a different kind of electric vehicle investment, offering exposure to the battery space rather than the manufacturers themselves.
Its new entry comes after it became extended from from a flat base breakout in October. LIT is up almost 50% so far this year.
Stitch Fix Comes Undone
One of the stocks suffering most Wednesday was Stitch Fix. The stock plummeted about 22% in high volume.
The online digital personal shopping stock was punished after it offered up guidance for Q2 and the full year that disappointed Wall Street.
And while it beat on earnings and revenue, it missed estimates for its fiscal Q1 active customers. This is seen as a key metric for the firm.
The online retail stock has had a torrid 2021, sinking nearly 67% so far this year.
These 3 Stocks Pass Buy Points
Century Communities is trading below its buy zone after earlier passing a weekly chart cup base buy point of 83.30. This is a second stage pattern, which are more likely to succeed.
The stock has been building up steam of late, with its relative strength line spiking. It has a perfect EPS Rating of 99, which reflects top-notch earnings performance.
ZIM Integrated Shipping Services also reversed after rising past a cup with handle entry of 60.19.
Shipping is an interesting area with current supply chain woes, but the fact this is an IPO stock adds risk.
Brown & Brown is in a buy zone above a cup without handle entry of 67.34 on a weekly chart.
The insurance play has been a top market performer over the past 12 months, with it RS Rating coming in at 93 out of 99.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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