Dow Jones futures tilted lower Monday evening, along with S&P 500 futures and Nasdaq futures. The stock market rally had a mixed session, with the Dow Jones and small-cap Russell 2000 rallying while the Nasdaq composite retreated.
Tesla stock extended Friday’s breakout and yet another key level on Monday. That comes as Tesla (TSLA) plans to open FSD Beta to tens of thousands of Full Self-Driving owners or subscribers starting as soon as Oct. 1.
MGM Resorts (MGM) moved higher in a buy range while Hilton Worldwide (HLT) broke out. Travel stocks did well overall, with Covid cases continuing to trend lower. Airline stocks and cruise lines are rebounding after sliding for months..
The video embedded in this article reviewed Monday’s market action and analyzed TRGP stock, AMD and PerkinElmer (PKI).
Dow Jones Futures Today
Dow Jones futures were 0.1% below fair value. S&P 500 futures sank 0.1%. Nasdaq 100 futures fell 0.1%.
Stock Market Rally
The stock market rally opened mixed and stayed that way, with the 50-day line acting as support or resistance in many cases.
The Dow Jones Industrial Average rose 0.2% in Monday’s stock market trading. The S&P 500 index fell 0.3%. The Nasdaq composite sank 0.5%. The small-cap Russell 2000 popped 1.5%.
The 10-year Treasury yield rose as high as 1.51% early Monday, a three-month best. The benchmark yield closed up two basis points at 1.48%.
Many medical product stocks down sharply, including Moderna (MRNA), Charles River Labs (CRL), Idexx Labs (IDXX), Repligen (RGEN), Dexcom (DXCM), Thermo Fisher Scientific (TMO), Intuitive Surgical (ISRG) and PerkinElmer. It’s not clear why such an array of biotechs, product and systems makers would all be hard hit. A New York state mandate requires over 665,000 workers in hospitals and nursing homes have at least one vaccine dose by midnight Monday or lose their jobs.
Meanwhile, a number of tech names fell hard, especially in software. Cloudflare (NET) tumbled 5.8% to essentially its 50-day line.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) slumped 2.3%, while the Innovator IBD Breakout Opportunities ETF (BOUT) dipped 0.25%. The iShares Expanded Tech-Software Sector ETF (IGV) retreated 1.7%. The VanEck Vectors Semiconductor ETF (SMH) gave up 0.4%, with AMD stock a major SMH component.
SPDR S&P Metals & Mining ETF (XME) popped 3.5% and Global X U.S. Infrastructure Development ETF (PAVE) advanced 1.2%. U.S. Global Jets ETF (JETS) edged up 0.7%. SPDR S&P Homebuilders ETF (XHB) climbed 0.8%. The Energy Select SPDR ETF (XLE) jumped 3.6%. The Financial Select SPDR ETF (XLF) rose 1.4%, with JPM stock a major holding.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) dipped 0.1% and ARK Genomics ETF (ARKG) fell 0.5%. Tesla stock is the top holding across Ark Invest ETFs, but they’ve generally struggled over the past few months.
Tesla rose 2.2% to 791.36, extending Friday’s breakout and clearing the April short-term high of 780.79. Shares are still in range from a 764.55 handle buy point, with the 5% chase zone rising to 802.78. Volume has been strong the past two sessions.
The relative strength line for Tesla stock, though still well off its January peak, is at a five-month high. The RS line, the blue line in the charts provided, tracks a stock’s performance vs. the S&P 500 index.
The only negative in the TSLA stock chart was the lack of a real shakeout. Shares have risen for five straight weeks, though not at such a blistering pace that a pullback or pause seems almost inevitable.
On Friday night, Tesla let Full Self-Driving owners and subscribers opt in to FSD Beta. But first Tesla will monitor their driving for seven days. That means FSD Beta could expand to a far-wider pool of drivers starting on Friday, Oct. 1. Meanwhile, Tesla could report third-quarter deliveries as early as Friday, though possibly as late as next Tuesday.
AMD stock staged an upside reversal, climbing 2.2% to 108.16 on Monday, rising from its 50-day line and decisively breaking a trend line. Volume was below average, but was the heaviest in several weeks. AMD is working toward a 114.59 double-bottom buy point.
WLL stock rose 6.1% to 59.49, clearing a 57.69 buy point from a cup base. The RS line for Whiting stock is at a new high on the breakout, a bullish sign. WLL stock returned to public markets in September 2020, following a bankruptcy earlier in the year.
TRGP stock jumped 4.3% to 49.46 just topping a 49.30 buy point from a cup base, according to MarketSmith analysis. Targa Resources delivers natural gas and natural gas liquids. Natural gas prices are rising sharply in the U.S. and white-hot in Europe.
JPM stock rose 2.4% to 166.98, breaking out of a cup-with-handle base and its 163.93 buy point in volume that was slightly above normal. JPMorgan stock has rallied for five straight sessions, reclaiming its 50-day line and breaking a trend line last Thursday.
MGM stock rose just over 1% to 45.09, staying within a buy zone that runs to 46.06. The casino giant cleared a 43.87 cup-with-handle base last Thursday after closing slightly below that entry on Wednesday. On Monday, MGM agreed to buy The Cosmopolitan hotel and casino operations for $1.6 billion from Blackstone (BX).
HLT stock climbed 2.45% to 138.80, rising above a 136.99 cup-base buy point, though on below-average volume. Arguably the best time to buy Hilton stock was on Thursday, when it cleared an almost-handle in heavy volume. The RS line for Hilton stock isn’t quite at a new high, but is at a consolidation peak and a six-month best.
Market Rally Analysis
The stock market rally had an OK session. The Nasdaq and S&P 500 retreated, but found support at the 50-day line following the strong recovery last week. Meanwhile, the Dow Jones hit resistance at its 50-day line, but at least it’s trying to get above that key level after several weeks. The Russell 2000 simply had a very strong day after reclaiming its 50-day and 200-day lines last week.
Growth stocks retreated Monday, partly due to the continued rise in the 10-year Treasury yield. The FFTY ETF showed real resilience in the past couple of weeks after racing to record highs.
Meanwhile, rising Treasury yields and energy prices pushed up the Dow Jones and Russell 2000.
What To Do Now
Monday’s mixed market rally and and retreat in growth stocks showed why investors shouldn’t get too exposed, especially to a particular sector. That being said, a lot of sectors have been working, though not necessarily all on the same day.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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