Dow Jones futures rose 50 points early Thursday after this week’s jobless claims report, as the stock market sought to add to Wednesday’s record highs. Early losses positioned Tesla stock to extend its losing streak. And five top stocks held in new buy zones after recent breakouts.
Among the Dow Jones leaders, Apple (AAPL) rose 0.25% premarket Thursday, while Microsoft (MSFT) gained 0.15% in today’s stock market. Also among the Dow 30, Home Depot (HD) continues to rebound from support, while Nike (NKE) regained a key level.
Electric-vehicle leader Tesla (TSLA) traded down around 1% premarket Thursday. Its rival, Rivian (RIVN), was flat. Lucid Group (LCID) inched lower. And Chinese EV leaders Li Auto (LI) and Xpeng Motors (XPEV) were mixed Thursday morning ahead of their December sales reports, expected over the weekend.
Among Thursday’s top stocks to buy and watch, Applied Materials (AMAT), ArcBest (ARCB), Fortinet (FTNT), Huntsman (HUN) and Icon (ICLR) are in or near new buy zones. Following last week’s bullish market signal, investors have the green light to purchase new breakouts.
Icon, Microsoft and Tesla are IBD Leaderboard stocks. Fortinet was featured in this week’s Stocks Near A Buy Zone column. Applied Materials is an IBD SwingTrader stocks. Huntsman was Wednesday’s IBD Stock Of The Day.
Dow Jones Today: Jobless Claims
Ahead of the stock market open Thursday, Dow Jones futures rose 0.15% vs. fair value, while S&P 500 futures moved up 0.1%. Nasdaq 100 futures rose 0.15%. Small caps lagged slightly, with Russell 2000 futures traded a fraction in the red. Remember that premarket action in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Elsewhere, the 10-year Treasury yield fell to around 1.53% Thursday morning, following a leap to above 1.54% Wednesday. The 10-year Treasury yield settled Wednesday at its highest level since Nov. 24. U.S. benchmark oil slipped 0.5%, threatening to snap its six-day advance.
Early Thursday, the Labor Department said that first-time claims for unemployment assistance fell to 198,000 last week from the previous week’s 205,000, topping Econoday estimates for 205,000 initial claims.
U.S. markets will operate on a normal schedule Thursday and Friday, ahead of the New Year.
Stock Market Rally
The stock market posted mixed action Wednesday, as the Dow Jones Industrial Average hit a new high, while the S&P 500 set a new closing high. The Nasdaq fell for a second straight session, but losses were mild.
Following some strong action last week, the market outlook is back in a “confirmed uptrend.” This gives investors a green light to buy top-rated growth stocks breaking out past correct buy points.
Wednesday’s The Big Picture commented: “But the market advance is showing signs of slowing. While the Dow and the S&P 500 marked new high closes, neither index finished at session highs. Index moves the past two days were mild. The Nasdaq Wednesday quickly headed south and spent most of the session underwater before trimming its losses.”
For daily stock market commentary, check out IBD’s The Big Picture.
Dow Jones Stocks To Watch: Home Depot, Nike
Home Depot stock rallied 1.1% Wednesday, rising for a seventh straight day, as the home improvement chain continues to rebound from its 50-day support level. Amid the current win streak, Home Depot is again the No.1 Dow Jones performer in 2021, up 54.7% year to date through Wednesday’s close. (The No. 2 Dow Jones stock is now Microsoft with a 53.7% advance.) HD shares were unchanged premarket Thursday.
Dow Jones retail leader Nike is tracing a new flat base that has a buy point at 179.20, according to IBD MarketSmith chart analysis. Shares regained their 50-day line following Wednesday’s 1.4% advance, but have to decisively move above that resistance level. It has a year-to-date gain of 19.3%. Nike shares were flat premarket Thursday.
Stocks To Buy And Watch: Applied Materials, ArcBest, Fortinet
IBD SwingTrader stock Applied Materials ended just above a 159.10 buy point in a flat base following Wednesday’s 0.8% gain. Shares are in the 5% buy area that runs up to 167.06. AMAT shares were unchanged premarket Thursday.
Trucker ArcBest rose 1.2% Wednesday, adding to Monday’s breakout gains past a 116.89 buy point in a shallow consolidation. The buy range ends at 122.73, so the stock is nearly extended. The stock edged higher early Thursday.
Cybersecurity leader Fortinet remains in the 5% buy area above a 355.45 buy point in a consolidation after Wednesday’s 0.2% rise. The buy area tops out at 373.22. Bullishly, the stock’s relative strength line hit a new high Monday on the breakout, confirming the stock as a market leader. The RS line measures a stock’s price performance vs. the S&P 500. Fortinet shares were flat premarket Thursday.
IBD Leaderboard stock Icon is still in buy range past a 301.82 buy point in a consolidation, according to IBD MarketSmith chart analysis, in the wake of last week’s breakout move. The 5% buy area runs to 316.91. Per Leaderboard commentary, Icon also cleared resistance around 290, which served as an early entry. The stock was unchanged in early morning trade Thursday.
Wednesday’s IBD Stock Of The Day, Huntsman, broke out past a 34.57 flat-base entry during Wednesday’s 4.4% advance. Shares closed squarely in the 5% buy range that goes up to 36.30. HUN stock shows a 91 out of a perfect 99 IBD Composite Rating, according to the IBD Stock Checkup. Huntsman stock rose 0.7% premarket Thursday.
EV Stocks: Li Auto, Xpeng, Lucid Motors, Rivian
Li Auto continues to work on the early stages of a new base, after triggering the 7%-8% loss-cutting sell rule below a cup-with-handle base’s 34.93 buy point. Shares are below their 50-day line after finding support around the long-term 200-day moving average. The stock was slightly higher premarket Thursday.
Xpeng Motors activated a round-trip sell signal from a 48.08 buy point during early December’s sharp sell-off. XPEV shares continue to see resistance around the key 50-day moving average. Wait for the stock to form a new base, which would offer a fresh entry. Shares rose 0.3% premarket Thursday.
Lucid Motors shares inched lower premarket Thursday, threatening to add to Wednesday’s slight loss. LCID stock remains extended past a 28.49 buy point in a cup-with-handle base, but huge gains have faded. Shares are trying to retake their 50-day line, but are having trouble getting back above that level.
Recent initial public offering Rivian was flat premarket Thursday, pausing after Wednesday’s 3.4% decline. RIVN shares closed Wednesday about 45% off their post-IPO highs. Continue to wait for an IPO base to form before considering a purchase. Recent sharp losses are a significant setback in the stock’s basing process and there is no new buy point in sight.
Tesla stock dropped around 1% premarket Thursday, threatening to extend a two-day losing streak. Early Thursday, Tesla issued a recall of 356,309 vehicles. A rearview camera cable harness is at risk of damage from opening and closing the trunk lid, the National Highway Traffic Safety Administration said.
On Monday, Tesla shares briefly topped a downward-sloping trendline buy point around 1,115 before closing beneath it. Getting above Tuesday’s intraday high could serve as a trigger, although forming a handle would be the most constructive chart action at this point. Meanwhile, a double-bottom base with a 1,202.05 buy point continues to take shape.
Shares traded as high as 1,243.49 on Nov. 4, but the stock ended Wednesday about 13% off its 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple stock ended Wednesday up less than 0.1% and just off all-time highs. The stock is about 17% above a 153.27 buy point out of a cup-with-handle base, according to IBD MarketSmith chart analysis, and close to the 20%-25% profit-taking level. AAPL shares rose 0.25% premarket Thursday.
Software leader Microsoft decisively regained its 50-day line last week, placing the top Dow Jones stock in a new buy area. Meanwhile, MSFT shares are forming a flat base with a 349.77 buy point with an early entry at 343.89. Shares moved up 0.15% premarket Thursday, on pace to add to Wednesday’s 0.2% gain.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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