Dow Jones futures will open on Sunday night, along with the S&P 500 and Nasdaq futures. The stock market correction deteriorated, although weak to modest weekly losses refuted volatile weekend sales as government bond yields jumped. Nasdaq undermined rally experience and reached its worst levels since 2020.
x
Eli Lilly (LLY), Albemarle (ALB), Dollar Tree (DLTR), ZIM Integrated Shipping (ZIM) and the new IPO Excelerate Energy (EE) are five stocks worth watching or in buying areas near points of purchase or simply changing relative strength.
Relative strength is important, but with market adjustment, relative gains can be “absolute losers”. Apple (AAPL) is a great example. Its relative strength is at a record high, but AAPL shares have fallen for six consecutive weeks.
LLY and ZIM are available on IBD 50.
The video embedded in the article discussed in depth the volatile marketing week, and also analyzed the shares of DLTR, Excelerate Energy and Apple.
Dow Jones futures today
Dow Jones futures open at 18:00 ET on Sunday, along with S&P 500 and Nasdaq 100 futures.
Remember that the action at night in Dow futures and elsewhere does not necessarily turn into actual trading in the next regular session of the stock market.
Join the IBD experts as they analyze the actions that can be taken in the stock market rally on IBD Live
Stock market rally
The stock market rally began with solid gains that ended abruptly on Thursday after the Nasdaq fell 5% that day.
The Dow Jones Industrial Average fell 0.2% in stock trading last week. The S&P 500 index fell 0.2%. The composite Nasdaq lost 1.5%. Russell 2000 with a small capitalization fell 1.3%.
Yields on 10-year government bonds rose 24 basis points to 3.12%, with almost all of that profit coming as a delayed response to the Federal Reserve’s meeting on Wednesday. The 10-year yield is aiming for an 11-year high of 3.25% as of October 2018.
US crude futures jumped 4.9 percent to $ 109.77 a barrel last week.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) fell 2.4% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) fell 3.3%. The iShares Expanded Tech-Software Sector (IGV) ETF fell 4.9% after investors hit the software. VanEck Vectors Semiconductor ETF (SMH) rose 1.2%.
The SPDR S&P Metals & Mining ETF (XME) fell 3.65% last week as steelmakers followed the miners in breaking key support. The Global X US Infrastructure Development ETF (PAVE) fell 1.4%. The US Global Jets ETF (JETS) was down 4.9%. SPDR S&P Homebuilders ETF (XHB) rose 0.1%. The Energy Select SPDR ETF (XLE) rose 10.3%. Financial Select SPDR ETF (XLF) increased by 0.6%. The Health Care Fund for a selected sector SPDR (XLV) decreased by 0.4%.
Reflecting more speculative stock stories, the ARK Innovation ETF (ARKK) fell 3.25% last week and the ARK Genomics ETF (ARKG) 3.8%, both to 25-month lows. In particular, ARKK recorded record flows as early as Tuesday, despite a huge drop in ETFs from early 2021.
Five best Chinese stocks to watch now
Eli Lilly Stock
Eli Lilly’s shares continued to trade around its 21-day line last week, finding support on its 10-week line. Shares rose 1.6% to 296.90 last week. The availability of LLY is in the range of 284 points for purchase from a cup base. The stock also crashed over a short trend line, using Wednesday’s high of 296.28 as a trigger. Or you can wait to see if LLY shares create a new base, offering a point of purchase under, hopefully, better market conditions.
The RS line continues to reach new highs even as LLY shares fall from early April.
Albemarle Foundation
Shares of ALB rose 26% to 242.41 last week, fueled by strong gains and guidance from Livent (LTHM) and then Albemarle itself. The lithium giant rose above its 50-day and 200-day lines and broke the trend line. This would suggest early entry into a better market. ALB shares are currently working on a deep glass with a buying point of 291.58. But maybe Albemarle could form a handle, just around the key resistance at 248.
Dollar Tree shares
Shares of Dollar Tree returned to their 50-day / 10-week lines for the first time since a break in early March. Shares of DLTR tried to bounce back on Friday, albeit in a small volume. A slightly stronger move, ideally with a larger volume, would suggest an early entry. Dollar Tree shares seem to be the leader among retailers with discounts at the moment.
The RS line for DLTR stocks is right at high levels.
WINTER promotions
Shares of ZIM rose 19% to 66.16 last week, rising to regain the 50-day line. This is after a bottom of 48.21 in the previous week, testing its 40-week line. The high dividend delivery game now has a cup base with a buy point of 79.05. Ideally, ZIM shares would move a little higher than making a profit forecast on May 18.
ZIM is an ocean container ship game, but recently hired three liquefied natural gas ships.
EE stock
Excelerate Energy is a rare IPO in 2022. Shares at $ 24 a share in the first half of April fell below a record 29.10 on April 18 to a low of 22.65 on April 22. EE shares already have an IPO base with 29.20 points to buy, according to MarketSmith’s analysis. Shares tried to break a downward trend on Friday before cutting gains to close at 26.90. A move above Friday’s highest level of 27.38 would offer early entry.
The RS line, the blue line in the graphics provided, is already at a new peak.
Excelerate Energy operates floating liquefied natural gas terminals. This is already profitable, with profits expected to grow by 726% in 2022, as demand abroad for LNG booms.
Apple Stock
Finally, shares of Apple sold out strongly on Thursday, after a brief flash of early entry on Wednesday. The shares extended a weekly series of losses, although the decline from 0.2% to 157.28 was not much. RS’s AAPL stock line is at a record high on a weekly chart. This is a reflection of how weak the S&P 500 has been since the end of March. But it also reminds us how relative winners can be absolute losers in a market correction.
However, Apple shares deserve to be seen as one of the only names in technology or growth showing all kinds of resilience. If it manages to stay in the Nasdaq bear market, it could be the leader in the next sustainable uptrend.
Market rally analysis
The stock market has been rocked by an amusement park over the past week. After rallies began on Monday and rose on Wednesday, major indexes fell on Thursday, then lost more positions on Friday during the day.
Nasdaq fell to its lowest level since 2020, erasing its rally experience on Thursday and briefly undermining 12,000 on Friday. Russell 2000 also fell to levels from the end of 2020 on Friday.
The S&P 500 nearly bottomed out Monday through Friday.
The market experience for rallies is still alive for the S&P 500 and Dow Jones. So they can organize the next day at any time.
Probably the stock market could use another big shake-up to trigger a capitulation sale. Fear indicators are close to recent peaks, but have not exceeded the peaks of 2022. Ongoing flows in the ARKK and other growth funds also signal that the “buying decline” is still in place.
The new lows continue to dominate the new peaks, especially on the Nasdaq. The breadth of the market is bleak. This has been a problem for the past year. But in 2022, shares of Apple and other megacaps no longer hide this major weakness.
Gaming is still a bright spot, especially the names of oil and gas. Fertilizer names are trying to keep around their 50-day moving averages. Lithium pieces are back in focus, while wood products and building materials look interesting. Meanwhile, health insurers continue to look strong, as do some drug manufacturers such as LLY, but leadership in medicine is waning.
Meanwhile, steelmakers are cutting off support, seeking to join the miners of gold and base metals. Heavy construction companies have also fallen in recent weeks. And while oil and gas are strong, uranium and solar reserves have fallen sharply over the past few weeks.
Market Time with IBD’s ETF Marketing Strategy
What should we do now
Investors should have all the money in cash or almost. Exceptions would be small exposures to leading sectors or long-term holdings with significant profits.
As Thursday’s stunning sell-off showed, the market could sell off much faster and deeper than it rises. So, if you have exposure, hurry to take partial profits and be ready to quickly reduce losses.
Don’t try to guess the bottom of the market. In the end, you will be right, but how many possible bottoms have there been in the last few months?
For now, keep your powder dry and your mind fresh – and work on your watch lists.
Read the Big Picture every day to stay in line with market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
YOU MAY ALSO LIKE:
Want to make quick profits and avoid big losses? Try SwingTrader
The best growth stocks to buy and watch
IBD Digital: Unlock IBD’s first-class stock lists, instruments and analysis today
Tesla vs. BYD: Which thriving EV giant is better to buy?
Add Comment