The S&P 500 rose just above the 50-day line, which is a positive sign but not a definitive one.
an Apple (AAPL) managed to rally modestly, extending a rebound above the bear market’s lows on Tuesday. Tesla (TSLA) was unable to make gains, as it closed slightly lower. Tesla late Wednesday doubled its discount on year-end deliveries in the United States
Investors should remain wary. The market rally is still under pressure, and it has a bad habit of turning back after showing any strength.
Micron reported a broader-than-expected loss While first-quarter revenue fell 47%. The memory chip giant trended slightly lower in the current second quarter and announced 10% headcount cuts.
MU stock fell 4% in extended trade. Shares rose 1% to 51.19 on Wednesday, off their highs.
AMAT and Lam Research stock were down more than 2% in premarket trading while KLAC stock was down 1%.
Separately, a giant car dealership carmax (KMX) badly missed its fiscal third-quarter earnings and sales. KMX stock is down, as are those of other auto dealers.
Dow jones futures today
Dow futures fell 0.2% against fair value. S&P 500 futures fell 0.3% and Nasdaq 100 futures fell 0.4%.
The 10-year Treasury yield fell 3 basis points, to 3.65%.
Crude oil futures rose more than 1%.
Chinese stocks rebounded on hopes of further easing in Covid policy, including for foreign travellers.
Stock market rise
The stock market rebounded on Wednesday, quickly rising over 1% and largely holding those gains into the close.
The Dow Jones Industrial Average rose 1.6% on Wednesday Stock market trading. The S&P 500 rose 1.5% with the Dow Jones giant Nike being the top S&P 500 today for the day. The Nasdaq Composite Index advanced 1.5%. The Russell 2000 Small Cap Index rebounded 1.7%.
Apple stock rose 2.4% to 135.45 on Wednesday, still well below its moving averages. On Tuesday, AAPL stock reached 129.89, above the June bear market low of 129.04.
US crude oil prices rose 2.7% to $78.29 a barrel.
The 10-year Treasury yield was unchanged at 3.68%.
Exchange Traded Funds
between the The best mutual fundsThe Innovator IBD 50 ETF (fifty(up 2.2%, while the Innovator IBD Breakout Opportunities ETF)fit) was 1.6% higher. iShares Expanded Technology and Software ETF (IGV) by 1.2%. VanEck Vectors Semiconductor Corporation (SMH) 2.2%. Micron stock is a prominent holding company of SMH, along with chip equipment stocks AMAT, LRCX, and KLAC.
SPDR S&P Metals & Mining ETFs (XME(up 2.6% and the Global Infrastructure Development Fund (ETF) in the USA)cradle) 1.7%. US Global Gates Foundation ETF (Planes) climbed 1.3%. SPDR S&P Homebuilders ETF (XHB) jumped 1.9%. Energy Defined Fund SPDR ETF (xle) and Financial Select SPDR ETF (XLF) advances 1.55%. SPDR Health Care Sector Selection Fund (XLV) added 1.3%.
Tesla delivery discount
Tesla has begun offering $7,500 for U.S. delivery of the Model 3 or Model Y before the end of the year, Electrek reported late Wednesday. That’s up from $3,750 at the start of December, with 10,000 free Supercharger miles included, too. Tesla is trying to increase delivery numbers in the last quarter of the year.
Many potential buyers may delay receiving until January 1, when new US tax credits of up to $7,500 begin. Tesla sales in the US may also face a negative impact from Elon Musk’s Twitter actions and politically charged tweets.
Tesla stock tried to rally on Wednesday but was unable to end its losing streak on a strong market day. TSLA stock fell 0.2% on Wednesday to 137.57, marking another bearish low. Shares are down 8.4% so far this week and 29% in December.
Stocks rose slightly Thursday morning.
Stocks to watch
First Solar rose 3.5% to 162.06 after falling to 150.25 on the day, finding support above the 50-day line. FSLR stock is now up 5.7% above the 10-week line and is at a short-term high. Solar Commander may be working on a new base, but it needs a few more weeks.
MEDP rose 3.4% to 210.59, bouncing from the 50-day line and regaining the 21-day line. Investors can buy Medpace shares now, or wait for the trend line to break starting November 15th. MEDP stock has a buy point of 235.82 from a deep consolidation of 16% alongside a deep cup base of 45%.
PI rose 2.3% to 117.15, continuing to rebound from the 10-week line but only 4% above that level. This RFID chip run is doable from this pullback after the earnings hack in late October.
AEHR rose 1.3% to 22.80, bouncing off the 50-day line. A move above the 21-day line would provide an entry into volatile stocks. Electric Vehicle Prone Chip Testing Company is achieving buoyant revenue growth.
SLB stock rose 3% to 53.31, extending Tuesday’s rebound from the 50-day and 21-day lines. Now clearly breaking a trend line in a short consolidation, Schlumberger stock is still very actionable here.
Market rally analysis
Well, the stock market has now rebounded. After making gains on Tuesday, the major indices had a strong session on Wednesday.
The Dow Jones index, supported by Nike, continued its recovery from the 50-day line.
The S&P 500 and S&P MidCap 400 just recovered the 50-day moving average, but only by a hair. The S&P 500 needs to move decisively above the 50-day line, and that would only be the first step for the market to go higher.
The NASDAQ and Russell 2000 remain below the 50-day averages.
More blue chips found support or rebounded from key levels, including First Solar and Aehr Test Systems. Some are issuing flash buy signals, but in a fragile market.
What are you doing now
After last week’s ugly downtrend reversal and Monday’s losses, the past two days have been positive, but don’t get excited.
Market exposure should remain light. The upside remains under pressure with the S&P 500 at a key level, with many other hurdles ahead.
Even if the market rally regains a lot of the previous week’s losses, there is still a risk that this will be another trap to lure investors in before the immediate pullback.
So, while some stocks are flashing buy signals, investors should be wary of taking any new trades. Yes, if the main indicators continue to recover, the new purchases of the past two days are likely to work. But if the S&P 500 drops to its lowest levels on Tuesday or worse, those new buys will likely fail.
If you try to play in the current market, keep the positions small and take at least partial profits quickly. Broad market ETFs can be a way to get involved in a small rally without the risk of individual stocks.
But, a lot of equity is being created. So investors must be prepared to act, update watchlists and stay in touch.
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