Dow Jones futures will open Monday evening, along with S&P 500 futures and Nasdaq futures, at the end of the long weekend.
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The stock market rally suffered a sudden sell-off on Wednesday, but it was more of a jump scare than a scare show. Major indexes rebounded, closing near their weekly highs, with small to strong gains. The Russell 2000 hit a 20-month high on Friday.
But while the market rally does not want to decline, a pause or pullback would be constructive. The Nasdaq looks extended, along with several leading stocks.
Nvidia (NVDA) has created a new buy point. So did I Tesla (TSLA), amid a flurry of headlines. The Magnificent Seven Stock III, Microsoft (MSFT), held in a buy zone, with additional entries possible.
Samsara (IOT) is trading tightly while playing with specialty steel Tenaris (TS) is flirting with a buy zone. Warren Buffett backed Nu Holding (NU) is located around several main levels.
NVDA and Microsoft stock are on the IBD Leaderboard. Microsoft stock is on the IBD Long-Term Leaders list. Nvidia and IOT stock are in the IBD 50. Tenaris was the IBD Stock of the Day on Friday.
The video embedded in the article analyzed the weekly market action as well as Nvidia, Samsara, and TS stocks.
Dow jones futures today
Dow Jones futures open at 6pm EST on Monday, along with S&P 500 futures and Nasdaq 100 futures.
The US stock market will be closed on Monday for the Christmas holiday, along with many other stock exchanges around the world.
Remember, an overnight move in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Stock market pool
The stock market rally ignored Wednesday’s heavy sell-off, with major indexes rising for the eighth straight week.
The Dow Jones Industrial Average rose 0.2% in stock market trading last week. The S&P 500 rose 0.75%. The Nasdaq Composite rose 1.2%. The small-cap Russell 2000 stock jumped 2.5%.
It is certainly positive that the market’s rally has held up after Wednesday’s sudden drop. But the Nasdaq is 7.8% above its 50-day line. The NASDAQ could certainly become more extended, but the wider the spread, the greater the risk of a pullback occurring, and the more dangerous it will be. Various sentiment indicators are also indicating a rising uptrend, reinforcing the bearish case.
A pause or modest decline in the market, such as a few weeks after Thanksgiving, would be healthy. This would allow the moving averages to fill the gap while the leaders could form new handles or upward pullbacks.
The yield on the 10-year Treasury note fell 2 basis points to 3.91% during the week. The two-year Treasury yield, closely tied to the Fed’s policy expectations, fell 12 basis points to 4.34%.
US crude oil futures rose 2.5% to $73.56 per barrel last week.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) rose 1.5% over the week. MSFT stock is a major holding of IGV. The VanEck Vectors Semiconductor ETF (SMH) fell 0.5%. Nvidia stock is the top component of SMH.
Reflecting more speculative stocks, shares of the ARK Innovation ETF (ARKK) rose 3.7% last week and the ARK Genomics ETF (ARKG) rose 6%. TSLA stock is a top holding across Ark Invest’s ETFs.
Shares of the SPDR S&P Metals & Mining ETF (XME) rose 6.1% last week. The Global US Global Jets ETF (JETS) rose 0.8%. The SPDR S&P Homebuilders ETF (XHB) advanced 0.9%. The Energy Select SPDR ETF (XLE) is up 0.8% and the Healthcare Select SPDR ETF (XLV) is up 0.6%.
The Industrial Sector SPDR Fund (XLI) rose 0.1%, rebounding from mid-week lows.
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Stocks near buy points
Nvidia stock fell 0.1% to 488.30 last week. The AI chipset leader now has a new flat base with a buy point of 505.48, next to a double bottom base.
IOT rose 0.1% to 34.01. Samsara stock is in a buy range starting at the 32.41 entry level of the cup base. Shares now have a three-week tight pattern on the weekly chart, with the official entry at 36.91. Investors can use Friday’s high of 35.04 as an early entry.
Samara shares rose 26% on December 1 after strong earnings and guidance. Since then, IOT stocks have largely maintained this strong move, while the 21-day line has nearly closed.
Microsoft stock rose 1% to 374.58, continuing to embrace the 21-day line while the 50-day line closes the gap. Shares remain within a range of 366.78 buy points on a cup basis, which were first settled on November 10. Investors may want to wait for MSFT stock to clear a short trend line, using Wednesday’s high of 376.03 as a limiting input. Microsoft also has a five-week tight pattern with a buy point of 384.30. This is on track to be a flat and base pattern after next week.
Tenaris stock rose 3.3% to 35.25 last week. Shares are closing at a firm buy point of 35.98, according to MarketSmith. On Friday, TS stock flirted with an early entry at 35.31. The specialist steel pipe maker has significant exposure to the energy market.
NU stock fell 1% to 8.22. Stocks have been hugging the 21-day line since mid-November, while the 50-day line has caught up. NU stock now has a flat base around the top of the previous consolidation. The new official buy point is 8.87. But a strong move away from the 50-day line, which would also break a very short trend line, could provide an early entry.
Warren Buffett Berkshire Hathaway (BRKB) is an investor in the Brazilian digital banking platform.
Tesla shares
Tesla stock fell 0.4% over the week to 252.42, down 0.8% on Friday. Shares are operating at a double bottom buy point of 278.98. Technically, TSLA stock now has a thin handle on the weekly chart, giving it a buy point of 259.84. But ideally, the handle will have some depth, perhaps undermining the December 20 low and testing the 21-day moving average at least.
Norway revealed on Thursday that it had been looking into the suspension failures of the Model S and Sweden announced on Friday that it was looking into similar issues. It comes as Reuters says it found that Tesla was aware of faulty suspension and steering parts across its model lineup dating back at least seven years, but often blamed drivers when those parts failed.
Tesla is striving to reach its full-year delivery target of 1.8 million electric vehicles. EV registrations in China were strong, while in Europe and the US they were less robust, even as various subsidies expired.
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What are you doing now
The market rally looks strong, and there are good reasons to rally in 2024. But for now, the major indexes look stretched, along with plenty of leaders.
So standing on equal footing remains a sound strategy.
Some initial handles, tight zones and pullbacks are developing, so investors should work on their watch lists and check them twice.
Read The Big Picture every day to stay on top of market trend and leading stocks and sectors.
Please follow Ed Carson on X/Twitter at @IBD_ECarsonthreads at @edcarson1971 and Bluesky at @edcarson.bsky.social for stock market updates and more.
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