Dow Jones Futures Signal Mixed Market Rally; Roku, AMD Lead 10 Bullish Reversals; Tesla Model Y To Europe Soon?

National Financial Solution > Business Report > Dow Jones Futures Signal Mixed Market Rally; Roku, AMD Lead 10 Bullish Reversals; Tesla Model Y To Europe Soon?


Dow Jones futures and S&P 500 futures rose Friday morning, while Nasdaq futures edged lower. The 10-year Treasury yield climbed after days of sharp declines, while China cut banks’ reserve requirements. Meanwhile, Tesla (TSLA) raised U.S. prices again, while signaling that Tesla Model Y shipments to Europe are about to start.




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The stock market rally retreated Thursday, but the Nasdaq and S&P 500 found support around short-term moving averages.

Many stocks reversed off key levels. Roku (ROKU), Advanced Micro Devices (AMD), Crocs (CROX), InMode (INMD), Upwork (UPWK), Denbury Resources (DEN) and Figs (FIGS) tested their 21-day exponential moving averages, while Tempur-Sealy (TPX), Ford Motor (F) and Tesla stock found support at their 50-day lines.

Roku stock, Crocs, InMode, Figs and Ford arguably offered buying opportunities from their reversals. AMD stock, Upwork, Denbury, Tempur-Sealy and Tesla found key support, but might have buying opportunities a little later.

Overnight, Tesla raised U.S. prices on the base Model S and X vehicles, while indicating that Model Y deliveries will begin in Europe by September.

Tesla, Ford, InMode, Tempur-Sealy and CROX stock are on IBD Leaderboard, while UPWK stock is on the Leaderboard watchlist. INMD stock and Roku stock are on the IBD 50.

Taiwan Semiconductor (TSM) reported June revenue of 148.47 billion Taiwanese dollars ($5.3 billion), up 22.8% vs. a year earlier. First-half revenue was up 18.2%. TSM is the world’s largest chip foundry, making semiconductors for Apple (AAPL), Nvidia (NVDA), AMD and many others. Taiwan Semiconductor reports earnings next week.

TSM stock rose a fraction Friday morning. Shares dipped 0.3% to 117.89 on Thursday, rebounding from 50-day line support.

Pfizer (PFE) says it is developing a Covid booster shot to target the Delta variant. Pfizer stock rose a fraction, while partner BioNTech (BNTX) rose solidly. Moderna (MRNA) edged higher.

Airbus (EADSY) said it had delivered 297 airplanes in the first half of 2021, up 52% vs. a year earlier but down from 389 jets in the first half of 2019. There was a strong pickup in June deliveries. Meanwhile, the Boeing (BA) archrival said it won 165 gross orders in the first half, but just 38 net orders after cancellations.

China’s central bank said it would cut the reserve requirement ratio by 50 basis points for banks on July 15. That reduces how much cash the banks must hold in reserve, freeing up 1 trillion yuan ($154 billion) for lending to bolster an economic recovery. The People’s Bank of China had signaled a possible shift earlier in the week.

Many China-related stocks rose Friday after sharp losses this week on fears of regulatory crackdowns vs. U.S.-listed Chinese firms following severe restrictions on newly public Didi Global (DIDI).

Dow Jones Futures Today

Dow Jones futures rose 0.6% vs. fair value, after falling modestly Thursday night. S&P 500 futures climbed 0.4% while Nasdaq 100 futures were just below break-even.

The 10-year Treasury yield rose 5 basis points to 1.34% overnight.

Crude oil futures climbed 1%. Copper prices rose 2%.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.


Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live


Stock Market Rally

The stock market rally suffered losses, but came off lows with the major indexes and most leading stocks not suffering too much damage.

The Dow Jones Industrial Average fell 0.7% in Thursday’s stock market trading. The S&P 500 index lost 0.9%. The Nasdaq composite slid 0.7%. The small-cap Russell 2000 sank 0.9%.

The 10-year Treasury yield fell 3 basis points to 1.29%. The 10-year yield fell below 1.26% intraday. Even with paring losses, the 10-year Treasury yield is down 14 basis points this week.

U.S. crude oil futures rose 1% to $72.94 a barrel amid another hefty decline in domestic crude and gasoline stockpiles. Oil prices fell in the prior two days after OPEC+ was unable to reach a production deal.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) fell 2%, with a couple of huge losers weighing on FFTY. The Innovator IBD Breakout Opportunities ETF (BOUT) slumped 3.1%. The iShares Expanded Tech-Software Sector ETF (IGV) fell 0.9%. The VanEck Vectors Semiconductor ETF (SMH) retreated 1.3%. AMD stock is a notable SMH holding.

SPDR S&P Metals & Mining ETF (XME) and Global X U.S. Infrastructure Development ETF (PAVE) both fell 2.2%. U.S. Global Jets ETF (JETS) descended 1%. SPDR S&P Homebuilders ETF (XHB) gave up 2.8%. The Energy Select SPDR ETF (XLE) edged down 0.5% and the Financial Select SPDR ETF (XLF) gave up nearly 2%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) fell 0.8% and ARK Genomics ETF (ARKG) closed down less than 0.1%. ARKK and ARKG tested or undercut their 200-day lines intraday before rebounding. Tesla stock is the No. 1 holding across the ARK Invest ETFs.


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Roku Stock

Roku stock fell as low as 405.15, rebounding from just above its 21-day line to edge up 0.3% to 420.28. At the low, Roku stock was also slightly above a 397.79 entry in what could be seen a double-bottom buy point. So there were a couple of reasons to start a position. Roku stock now has a handle buy point of 463.09.

AMD Stock

AMD stock fell as low as 87.45, nearly touching its 21-day line, before rallying to close off 0.9% at 89.74. AMD stock also tested and closed above a prior early entry of 89.30, just above a late April short-term peak. But after tumbling 4.2% on Wednesday, investors may want to wait for AMD stock to show more strength. It’s on track to have a handle on a weekly chart after Friday, presenting a 95.44 buy point.


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Crocs Stock

CROX stock tumbled to 116.20 intraday, right at its 50-day line, before rebounding to gain 0.6% at 113.45. Investors could have bought Crocs on the 50-day bounce or as it reclaimed a 110.01 flat-base buy point.

INMD Stock

InMode stock sank to 86.21 intraday, then raced back from its 50-day line for a 2% rise to 92.96. That intraday dive for INMD stock also tested an 87.10 buy point from a short cup-with-handle base.

Figs Stock

Figs stock fell 1.3% to 44.56, but that’s after sinking to 41.39 intraday, testing its 21-day moving average for the first time. That offered an aggressive point to start or add shares in the recent Figs IPO.

Ford Stock

Ford stock sank to 13.73, testing its 50-day line and a prior 13.72 cup-base buy point, but pared losses. Ford lost 1.2% to 14.06.

UPWK Stock

Upwork stock slid as low as 53.15 intraday, rebounding from its 21-day line to finish down 1.9% to 55.36. Intraday, UPWK stock was back in range of an early entry below 52. But, certainly at this point, investors likely should turn to the cup-with-handle buy point of 61.31, according to MarketSmith analysis.

Denbury Stock

Denbury stock rose 1.1% to 71.45 after falling to 68.05, rebounding from its 10-week line. The first or second test of the 50-day/10-week line can be a buying opportunity for a stock. But DEN stock has rebounded from just above its 10-week line several times on its huge run. While Thursday’s action was bullish, investors who don’t own Denbury stock perhaps should wait for a new base.

TPX Stock

Tempur-Sealy stock sank to 37.79, undercutting its 50-day line before rebounding to close down 3.2% to 39.24. TPX stock broke out past a 41.13 flat-base buy point last week, but reversed from a record 42.60 on Tuesday. Investors could use 41.13 or 42.70 as entry points.

Tesla Stock

Tesla stock retreated to 620.46 Thursday morning, undercutting its converging 50-day and 200-day lines. But TSLA stock rebounded, rising 1.3% to 652.81 for the day. In late June, Tesla stock reclaimed its 50-day line and broke above a downward-sloping trend line, offering an aggressive entry. At this point, investors should probably wait for 700.10, just above the top of a recent mini-consolidation, as a new aggressive entry. A more “traditional” early entry is 780.89, just above Tesla stock’s short-term April peak.

The China Passenger Car Association reported Thursday that Tesla sold 33,155 made-in-China vehicles in June. That includes 28,138 local sales, up from 21,936 in May and up sharply from April. Tesla exported 5,017 vehicles, down from April and May. However, Tesla’s local sales fell 16% sequentially from Q1, even with made-in-China Model Y production ramping up from the early January launch.

On Thursday, Tesla unveiled a shorter-range made-in-China Model Y that’s about 20% cheaper than the longer-range version that’s been available.

Tesla Model Y To Europe

Meanwhile, Tesla’s European website suggests Europe will get Model Y deliveries starting in September. A German media report said Model Y deliveries would begin in August, shipped from Shanghai.

Tesla is building a Berlin plant, but it’s not expected to be operational before year-end at the earliest.

If Shanghai and the Fremont, California, Tesla plants can meet European demand, why build the Berlin factory? What happens to spare production capacity in Shanghai and Fremont after the Berlin and Austin plants are up and running?

Late Thursday, Tesla raised the U.S. price of its Model S LR by $5,000 to $84,990 and the Model X LR by $5,000 to $94,990.

Tesla stock rose a fraction in Friday’s premarket.


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Market Rally Analysis

The stock market rally finally had a pullback, but it didn’t last for long. The Nasdaq and S&P 500 found support just above their 21-day lines, while the big-cap Nasdaq 100 only tested its 10-day line. Meanwhile, the Dow Jones closed above its 50-day and 21-day lines. The Russell 2000 fell further below its 50-day line. The major indexes came well off lows, though they faded somewhat into the close.

Ideally, the Nasdaq would test or undercut its 21-day line — either through another day or two of weakness or through a longer sideways pause — before moving higher again. If the Nasdaq returns to new highs in the next couple of days, it’ll be on the edge of being extended once again. At Thursday’s close, the Nasdaq was 4.6% above its 50-day line, down from 5.5%. The Nasdaq 100 is still 6% above the key level.

It was encouraging to see many leading stocks stage reversals off lows, including Roku stock, AMD, Figs and Tesla.

Hit The Gas On Reverse?

If you didn’t play Roku stock, Figs, or other reversals on Thursday, that’s OK. Successful reversals look obvious in hindsight, but reversals can quickly fizzle, especially when the major indexes are moving fast. And just because a stock rebounds bullishly today doesn’t mean it’ll hold the next day or next week.

There is nothing wrong with remaining calm and taking no immediate action when the market opens sharply lower and then pares losses.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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