The recent stock market rally has gained significant momentum, with notable moves across major averages. As we approach the opening of Dow Jones futures, along with S&P 500 futures and Nasdaq futures on Sunday evening, the leadership of the market rally remains focused on the artificial intelligence, chip and software sectors. While many of these stocks are currently overextended, a broader range of buying opportunities may emerge if market breadth continues to improve.
Several stocks have already shown breakout potential, including Tesla (TSLA), which broke out on Friday. Other notable stocks like DexCom (DXCM), Lennar (LEN), and JPMorgan Chase (JPM) also showed signs of early entry late in the week. Marriott International (MAR) is another stock worth considering for a potential stock.
These stocks represent areas of possible leadership in the market rally. Tesla’s breakout aligns with that of other electric vehicle (EV) rivals, such as BYD (BYDDF). DXCM stock is part of a group of medical products companies trying to gain bullish momentum. LEN stock is among several homebuilders experiencing a rally. While JPM stock is a standout in the financial sector, the broader sector is also showing signs of recovery. MAR stock is one of several travel-related stocks experiencing a broad resurgence.
Investors should consider increasing exposure to capitalize on this promising change in the market. However, it is essential to remain alert and be prepared to take a step back if necessary.
In other news, Apple is expected to unveil its mixed reality headset on Monday, its first hardware product since the launch of the Apple Watch in 2015. These headsets will compete with rivals such as Meta Quest from Meta Platforms (META). With Apple stock poised to surpass its January 2022 highs and inching closer to a $3 trillion market cap, all eyes are on this early announcement.
Tesla stock recently joined the IBD leaderboard, along with Meta stock. LEN shares have been added to SwingTrader. Lennar was recognized as Friday’s IBD Stock of the Day.
As we wait for Dow Jones futures to open today, let’s reflect on the impressive performance of the stock market rally. Last week saw substantial gains across the board, with the Dow Jones Industrial Average rising 2% in stock market trading. The S&P 500 index rose 1.8%, while the Nasdaq composite gained 2%. The small-cap Russell 2000 fared better, jumping 3.3%.
While the 10-year Treasury yield fell 13 basis points to 3.69% over the week, it saw an 8 basis point increase on Friday. US crude oil futures fell 1.3% to $71.74 a barrel last week, despite a 2.3% rebound on Friday.
As for ETFs, the Innovator IBD 50 ETF (FFTY) posted a notable 3.6% gain, while the Innovator IBD Breakout Opportunities ETF (BOUT) gained 1.7%. The iShares Expanded Tech-Software Sector ETF (IGV) rose 2.1%, but the VanEck Vectors Semiconductor ETF (SMH) saw a slight decline of 0.8%.
In the speculative story stock space, the ARK Innovation ETF (ARKK) saw a substantial 6.45% jump, while the ARK Genomics ETF (ARKG) jumped 4.9%. It’s worth noting that Tesla stock holds the top position among Ark Invest ETFs, and Cathie Wood’s Ark Invest also owns some BYD stock.
Other notable ETF performances include the SPDR S&P Metals & Mining ETF (XME) which rallied 4.2%, the Global Additionally, the SPDR S&P Homebuilders ETF (XHB) rose 3.5%, the Energy Select SPDR ETF (XLE) gained 1.4%, and the Health Care Select Sector SPDR Fund (XLV) rose 2.2%. DXCM shares are part of the XLV ETF.
The Financial Select SPDR ETF (XLF) saw a rise of 2.15% during an upbeat week. JPM stock is a prominent component of XLF. The SPDR S&P Regional Banking ETF (KRE) also saw a notable 4.8% jump.
All eyes are now on Apple as it prepares to show off its latest hardware and software innovations at its annual Worldwide Developers Conference. The event will feature a keynote presentation on Monday at 10 a.m. PT, featuring the latest operating systems for iPhone, iPad, Mac, Apple TV, and Apple Watch. Of particular interest is the possible introduction of a mixed reality headset, potentially called Reality Pro. This new hardware product would be Apple’s first since the debut of the Apple Watch in 2015. Meta Platforms recently revealed its latest Meta Quest headset, intensifying competition in this space.
With Apple shares gaining 3.15% last week, reaching a price of 180.95, they now sit just below the peak recorded in January 2022, indicating potential growth towards a market capitalization of $3 trillion.
Tesla shares saw a significant jump of 10.8% to 213.97 during the week, with an increase of 3.1% on Friday. The stock broke above its 200-day moving average on Tuesday and surpassed a 207.89 buy point on Friday from a cup or double bottom base. Tesla has shown consistent above-average volume gains over the past five sessions, which were meager over the previous three months.
Meanwhile, BYD shares rose 5.6% to 31.50 last week, and Friday’s 2.3% gain propelled the China-based electric vehicle and battery giant above a 31.17 buy point for mugs with handle initially authorized on May 10. BYD reported record deliveries in May, surpassing its previous peak from late 2022.
Tesla now says that all of its Model 3 and Model Y vehicles, including the base Model 3, are eligible for the full $7,500 tax credit in the US, although the exact details are still unclear.
Other stocks that approached buy points include DXCM, which rose 6.5% to 122.57 last week. DexCom reclaimed its 50-day line on Thursday and continued to gain momentum on Friday, offering an early entry opportunity. Other medical product and system manufacturers worth monitoring include Shockwave Medical (SWAV) and Intuitive Surgical (ISRG).
LEN shares rose 3.6% to 112 on Friday, bouncing above its 50-day line and presenting an aggressive entry point within an emerging consolidation. Numerous homebuilders saw bullish price increases on Friday, with LEN stock particularly active in high volumes.
JPM shares rose 3% to 140.47, approaching a downtrend within a new flat base adjacent to a previous consolidation. It remains within a reasonable range of its 50-day line. While JPMorgan stands out among other banks, the broader sector also showed bullish moves on Friday.
MAR stock rose 3.55% to 177.22 on Friday after reclaiming its 50-day line the previous day. Potentially offers an early entry point from an emerging flat base. Royal Caribbean (RCL) and Hilton Worldwide (HLT) are other travel-related stocks worth keeping a close eye on.
As market breadth continues to improve, investors may find additional buying opportunities beyond the stocks mentioned above. However, it is essential to remain cautious and adapt to changing market conditions.
In summary, the stock market rally has witnessed significant gains, particularly in the artificial intelligence, chips, and software sectors. Stocks like Tesla, DexCom, Lennar, JPMorgan Chase and Marriott International have shown breakout potential and offer potential buying opportunities. The upcoming introduction of Apple’s mixed reality headset increases market anticipation. It is essential that investors stay informed and make well-informed decisions based on current market dynamics.