Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures, were in focus following Tuesday’s coronavirus vaccine- and stimulus-fueled stock market rally. Dow Jones leader Apple surged past a new buy point, while Tesla-rival Nio rebounded sharply from a key support level.
Tech giants Advanced Micro Devices, Apple, DraftKings, Nio and PayPal are in or near new buy zones in the current stock market rally.
The Dow Jones Industrial Average advanced 1.1%, or 337 points. The S&P 500 rallied 1.3%, while the tech-heavy Nasdaq composite moved up 1.25%.
Dow Jones Futures Today: Stimulus Deal Optimism
Late Tuesday, Dow Jones futures hadn’t started trading yet. The futures session will start at 6 p.m. ET. Remember that trading in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
House Speaker Nancy Pelosi was scheduled to meet with congressional leaders at 4 p.m. ET to try to finalize a coronavirus stimulus package.
“We’re not leaving here without a Covid package,” Senate Majority Leader Mitch McConnell told reporters Tuesday. “It’s not going to happen. We’re going to stay here until we get a Covid package, no matter how long it takes.”
Late Monday, a bipartisan group of senators revised their stimulus deal proposal by breaking it in two bills. One bill would have $748 billion for generally popular ideas, including $300 a week in jobless benefits and another $300 billion for business loans.
Another $160 billion bill would include the divisive issues of business liability protection and money for state and local governments.
Amid the coronavirus stock market rally, the tech-heavy Nasdaq is up 40.4% for the year through Tuesday’s close. The S&P 500 is up 14.4%, while the DJIA is up 5.8% year to date, through the Dec. 14 close.
U.S. Stock Market Today Overview
Last Update: 4:26 PM ET 12/15/2020
According to the Worldometer data tracker, the cumulative number of confirmed coronavirus cases in the U.S. topped 16.9 million on Tuesday. Total virus-related deaths rose past 308,000.
The cumulative total of worldwide Covid-19 cases confirmed since the start of the outbreak topped 73.3 million Tuesday, with more than 1.63 million virus-related deaths.
Coronavirus Stock Market Rally
November was a key month for the stock market, after IBD’s The Big Picture flagged a new uptrend following the market’s bullish follow-through day on Nov. 4. Meanwhile, December sees the stock market near record highs, although the S&P 500’s slip on Monday raised its distribution day count to five.
Monday’s Big Picture commented, “With that many distribution days, you can start making a case that the market trend is turning bearish. But that doesn’t tell the whole story. The Nasdaq is still pretty clean of distribution, and most top-rated stocks continue to act well. Among those that have broken out of bases the past several weeks, nearly all remain above buy points.”
Dow Jones Stocks: Apple Hits New Buy Point
Apple broke out above another aggressive entry at 125.49. Shares surged 5% Tuesday after Nikkei reported that Apple plans to make up to 96 million iPhones in the first half of 2021, a 30% year-over-year increase. It cited strong demand for Apple’s first 5G smartphones, the iPhone 12 series.
Apple was Monday’s IBD Stock Of The Day.
The conventional buy point, for now, is 138.08, according to MarketSmith chart analysis.
The blue chip giant is the No. 1-performing Dow Jones stock for 2020, with a 74.2% advance through Tuesday.
Stocks In Or Near Buy Zones: AMD, DraftKings, PayPal
Advanced Micro Devices broke out above a 96.47 alternative buy point Tuesday with a 2.5% advance. Shares are in the 5% buy zone that goes up to 101.29.
AMD stock broke out above an 88.92 buy point in a double bottom on Nov. 30 and is extended from that entry.
According to IBD Stock Checkup, AMD stock boasts a perfect 99 IBD Composite Rating. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths.
DraftKings continues to build a cup with handle with a 53.82 buy point. Shares slipped 0.2% Tuesday, and are about 6% away from the potential entry. 6.1% Tuesday.
A key flaw is the stock’s lagging relative strength line. The RS line remains far from its old highs. Ideally, it should be approaching new highs ahead of a potential breakout.
PayPal is just above its 215.93 buy point in a cup base, according to MarketSmith chart analysis. Shares moved up 0.4% Tuesday and are in the 5% buy range that goes up to 226.73.
Tesla-rival Nio rebounded from its 10-week moving average line — a key support level — with a 6.2% rise Tuesday. A potential flaw is the lack of strong volume during Tuesday’s advance. The solid rebound from the support area places the stock in a new buy area.
Nio in a new IBD SwingTrader idea.
IBD Leaderboard stock Tesla reversed from early gains to slide 1% Tuesday, ending just off its record highs.
On Nov. 18, shares broke out above a 466 buy point in an awkward cup with handle and are more than 30% from the buy point.
Dow Jones Leaders: Microsoft
Among the top Dow Jones stocks, software giant Microsoft moved down less than 0.1% Tuesday. Shares are trying to move back above their 50-day line, but are finding resistance.
Year to date, Microsoft is one of the top Dow Jones stocks, advancing 35.8% through the Dec. 15 close.
Stock Market Rally: What To Do Next
Investors should continue to use the stock market’s strength to buy breakouts. Be patient and wait for powerful breakouts instead of chasing extended stocks. New buying opportunities occur almost every day, like AMD, Apple and Nio. If these new breakouts work, then add more exposure. But if breakouts start to fail, then you can back away.
In particular, focus on stocks with strong relative strength. Find them by using the relative strength line. The RS line measures a stock’s price performance vs. the S&P 500. If the stock is outperforming the broader market, then the RS line angles upward. If a stock is performing worse than the broad market, then the line will point lower.
Nice is finding support around it 10-week moving average and is just above a 238.45 buy point in a flat base. A new flat base shows a 255.58 buy point. Meanwhile, Intuit is barely extended past the 5% buy zone above a 354.08 buy point in a cup with handle.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones futures.
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