Dow futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. A newly confirmed recovery in the stock market quickly moved to “under pressure” last week as major indices sold off, despite a rebound on Friday afternoon.
Tesla (TSLA) and China BYD (BYDDF) Sales figures will be released over the weekend, after strong June deliveries from Lee Otto (LI), New (NIO) and Exping (XPEV).
Don’t feed the bear market. This is not the time to make new purchases; Investors should have little or no exposure. Instead, prepare for the next bullish run.
Northrop Grumman (No Objection Certificate), McKesson (MCK), centen (CNC), AstraZeneca (AZN) and Shock Wave Medical (SWAV) are all reasonably well held. They all have relative strength lines at the 52-week high or the highest consolidation levels.
BYD stock is also worth watching, as it is trading around a buying point. Tesla stock is approaching its lowest level in 2022.
NOC stock is on the IBD Leaderboard. Li Auto, Centene, McKesson and AZN stocks are in IBD 50. CNC and McKesson stocks are also in IBD Big Cap 20.
The video included in this article reviews shares of BYD, AstraZeneca, and Privia Health Group (PRVA).
Dow jones futures contracts today
Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
US stock exchanges will be closed Monday in observance of Independence Day, but other markets around the world will be open. Dow futures will trade normally on Monday.
Remember that overnight action in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stock market actionable shares on IBD Live
stock market rise
The stock market rally suffered solid to sharp losses again, with Friday’s gains only trimming the weekly declines.
The Dow Jones Industrial Average fell 1.3% in stock trading last week. The S&P 500 lost 2.2%. The Nasdaq Composite tumbled 4.1%. Small cap Russell 2000 fell 2.1%.
The 10-year Treasury yield fell 24 basis points to 2.89%, down to less than 3%.
US crude oil futures rose 0.8% to $108.43 a barrel last week, thanks to Friday’s 2.5% gain. Gasoline futures rose on Friday but fell this week.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) is down 1.1% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) is up 0.25%. The iShares Expanded Tech-Software ETF (IGV) index was down 5.3%. The VanEck Vectors Semiconductor Index (SMH) was down 9.3%. The micron technology (MU) Warning, following reports Intel Corporation (INTC) cut prices for computer chips, and criticized semiconductor stocks.
The SPDR S&P Metals & Mining ETF (XME) indexes fell 5.4% last week. The US Infrastructure Development Fund (PAVE) Global X Index fell 1.8%. The US Global Jets ETF (JETS) fell 3.4%. The SPDR S&P Homebuilders ETF (XHB) is up 0.5% thanks to a strong rebound on Friday. The Energy Select SPDR ETF (XLE) is up 1.4% and the Financial Select SPDR ETF (XLF) is down 1.4%. The SPDR Healthcare Sector Choice Fund (XLV) rose 0.4%.
Reflecting the speculative story stocks, the ARK Innovation ETF (ARKK) fell 10.1% last week and the ARK Genomics ETF (ARKG) fell 5.3%. TSLA continues to lead the Ark Invest ETFs. Cathie Wood’s Ark also has small holdings in BYD, Xpeng and Nio.
Top 5 Chinese stocks to watch right now
Tesla is likely to announce production and delivery numbers in the second quarter on Saturday. Analysts polled by FactSet on average expected Tesla to deliver 265,000 vehicles in the second quarter. That would be a significant drop from Tesla’s record first-quarter sales of 310,048 electric vehicles.
Tesla Shanghai was closed for most of April and only resumed full production in early June. Tesla’s recently opened Berlin and Austin plants produce relatively few vehicles, in part due to supply chain issues.
Tesla stock fell 7.5% to 681.79 last week after hitting resistance at the 10-week line on Monday. Stocks are not far from their May 24th low at 620.57. TSLA stock peaked in early November at 1,243.49.
Tesla vs. BYD: Which EV giant is the best one to buy?
The electric and battery car giant should cross 100,000 in sales of hybrids and electric components for the fourth consecutive month. They are likely to beat May’s record of 114,943, with Q2 sales comfortably above 320,000.
This could mean that BYD will overtake Tesla in terms of vehicle sales, even though BYD will still lag behind its competition in EV deliveries only.
BYD stock cleared 39.81 buying points from a deep cup base with a handle during the week, and closed 1.2% higher at 39.97 for the week. BYDDF is still 17% above the 50-day line. A high handle or a short shallow base can be ideal.
Chinese startups EV
On Friday, Nio reported record delivery in June, while Xpeng and Li Auto had their best month since December. With Covid shutdowns in the past and electric car subsidies rife, the three startups should see significant growth in the second half as they roll out new models.
Li Auto stock fell 1.6% to 37.70 on Friday and 7.6% for the week, to test 37.55 buying points. LI stock has been significantly extended by its moving averages, so entering was always risky. Having a new shallow base next to a deep uniformity would be ideal.
Nio and Xpeng shares sold 11.3% and 14.2% last week, respectively, down from nearly 200 days after they rose for several weeks.
BYD and Tesla should also see stronger production and demand in China in the coming months, with capacity increasing. BYD will also launch several models in the coming months, including the Seal Sedan, a competing Model 3.
stock to watch
Northrop stock rose 4.9% last week to 486.37, rebounding from the 50-day streak. The shares also moved above 477.36 old buy points that are no longer technically valid. But there has been a lot of trading around that level in recent months. In another week, the NOC stock may have a flat base.
McKesson stock rose 2.5% to 329.53 last week, trading above the 50-day line. MCK stock has 340.04 fixed base buy points. But investors can use a move above Friday’s high of 330.16 as an early entry.
Centene stock advanced 3.9% to 86.21 last week. Stocks hit resistance this week at 87.44 double bottom buy point. But a pause in the current market may be beneficial. CNC stock will likely form a handle in a few days, bringing the official entry slightly down to 87.08.
AstraZeneca stock is also hitting resistance near a base double-bottom buy point, pulling back after entering just 67.50 on Wednesday, according to MarketSmith analysis. AZN stock fell 1.4% to 65.95 last week, but found support at the 50-day line on Friday.
Shockwave stock rose 0.5% last week to 198.62, consolidating after rising 25% last week. The big move pushed the SWAV stock above the 194.41-cup bottom buy point with a handle. Investors can use 203.03, just above Tuesday’s high, as an entry. This could be a replacement handle after Tuesday.
Market Rise Analysis
Once again, the newly confirmed stock market rebound quickly ran into trouble. On Monday, the Nasdaq Composite Index hit resistance at the 10-week moving average and turned tail.
On Tuesday, the Nasdaq and S&P 500 closed below their follow-up day lows on June 24, a bearish sign that their rally may eventually fail. Dow Jones followed suit on Thursday.
Major indices fell significantly during the week, despite the upside reversal in lower trading volumes on Friday.
The market rally has not technically ended, but it is “under pressure”.
Macroeconomic conditions are getting worse. The Atlanta Fed’s second-quarter GDP index fell to -2.1% on Friday from -1% on Thursday and 0.3% on Wednesday. JPMorgan lowered its growth forecast, saying the US was “dangerously close” to recession.
Consumer spending is slowing, with inflation-adjusted spending falling. Manufacturing activity is still expanding, at a slower pace, but the ISM new orders sub-index turned negative in June.
Companies are just beginning to acknowledge the negative impact, with warnings from Micron, R (RH), General motors (GM) and nike (NKE) last week. That will likely continue heading into and during earnings season for the next several weeks.
Of course, while investors should be aware of the big economic and business trends, you should focus on what the market is doing right now. Currently, the market is in a sharp downtrend going back to the beginning of 2022 or late last year. The recent rally appears to be heading for a quick exit.
Medical stocks are showing strength, although they could lose steam if the bear market falls again. Defense stocks are rising, with Northrop being joined by many other players.
BYD and Li Auto look fun, but they could use a long break. Most auto stocks, including Tesla, are off-site.
Time to Market with IBD’s ETF Market Strategy
What are you doing now
It is not the time to invest. If you’re buying stocks in resilient areas like pharmaceuticals or defense, prepare to make at least partial profits quickly. A bearish and volatile market can quickly wipe out decent gains.
Instead of trying to pick the rare winner in a bear market, investors should look to identify the big leaders in the next sustainable upside.
Build your own watch lists and do research on some of the most promising companies.
Read the big picture every day to stay in sync with market trend, stocks and leading sectors.
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