Dow Jones futures fell Friday morning, along with S&P 500 futures and Nasdaq futures. The stock market rally continued to build momentum with a broad-based advance Thursday.
JNPR stock and Arista Networks are both flirting with early entries near their 50-day moving averages. Devon Energy rebounded bullishly from its 50-day/10-week line. Rambus cleared a new handle buy point while ANTM stock is one of several health insurers nudging into a buy zone.
Meanwhile, Tesla stock reclaimed some key moving averages Thursday, but doesn't offer a clear early entry.
Tesla, Anthem and RMBS stock are on IBD Leaderboard. ANET stock is on the IBD 50. DVN stock is on the Big Cap 20. Juniper Networks was Thursday's IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures fell 0.6% vs. fair value. S&P 500 futures retreated 0.7% and Nasdaq 100 futures lost 0.85%.
U.S. crude oil prices were flat, erasing overnight gains.
The 10-year Treasury yield fell 5 basis points to 2.14%.
President Joe Biden was set to have a call with Chinese President Xi Jinping at 9 a.m. ET. Biden was set to warn Xi not to actively help Russia in its Ukraine invasion.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
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Stock Market Rally
The stock market rally slowly gained momentum, closing near session highs again.
The Dow Jones Industrial Average and S&P 500 rose 1.2% in Thursday's stock market trading. The Nasdaq composite climbed 1.3%. The small-cap Russell 2000 advanced 1.6%.
The big-cap indexes had solid sessions even with Apple, Microsoft, Google parent Alphabet and Nvidia lagging. Tesla stock was the best-performing megacap name Thursday, with Amazon and Facebook parent Meta Platforms up modestly.
U.S. crude oil prices leapt 8.4% to $102.98 a barrel.
The 10-year Treasury yield erased morning losses to close flat at 2.19%. The two-year yield fell 3 basis points to 1.94%, slightly widening a narrow yield spread.
ETFs
Among the best ETFs, the Innovator IBD 50 ETF gained 2.2%, while the Innovator IBD Breakout Opportunities ETF was up 2.4%. The iShares Expanded Tech-Software Sector ETF rallied 2.3%. The VanEck Vectors Semiconductor ETF edged up 0.6%.
SPDR S&P Metals & Mining ETF rallied 4.4% and the Global X U.S. Infrastructure Development ETF climbed 1.7%. U.S. Global Jets ETF dipped 0.2% amid higher energy costs. SPDR S&P Homebuilders ETF climbed 1.55%. The Energy Select SPDR ETF popped 3.4% and the Financial Select SPDR ETF advanced 1.25%. The Health Care Select Sector SPDR Fund rose 1.6%.
Reflecting more-speculative story stocks, ARK Innovation ETF soared 4.8% and ARK Genomics ETF 4.9%. Tesla stock remains the top holding across Ark Invest's ETFs.
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JNPR Stock
Juniper Networks stock rose 1.4% to 34.65 on Thursday, rebounding from its 50-day line. A move above Thursday's intraday high of 34.84 would offer an early entry from the 50-day and its trendline. The official consolidation JNPR stock buy point is 36.13, according to MarketSmith analysis.
The relative strength line for JNPR stock is right at record highs. Analysts expect 14% EPS growth in 2022 and 2023 for Juniper Networks, which has a modest price-to-earnings ratio of 20.
ANET Stock
Juniper networking peer Arista Networks climbed 1.5% to 126, rebounding from the 50-day line and breaking a trendline, offering an early entry. The official buy point for ANET stock is 148.67, though 133.97 is another early entry. The RS line for Arista stock is near highs. Arista has a higher P-E than Juniper at 43, but analysts do see faster EPS growth of 26% this year.
Devon Energy Stock
Devon stock jumped 9.65% to 57.52, rebounding bullishly from a pullback to the 50-day and 10-week lines after a strong advance. DVN stock boasts blistering EPS growth, strong profit forecasts and a low P-E of 15.
A number of other energy stocks rebounded Thursday from their 50-day or 21-day lines.
Rambus Stock
RMBS stock rose 2.1% to 29.63, clearing a new 29.11 cup-with-handle buy point. A prior handle entry of 28.32 failed Monday. The RS line is right at highs.
Anthem Stock
ANTM stock advanced 1.55% to 478.13, clearing buy points at 470.12 and 472.11. Investors could use 478.10 as another entry. Anthem rose in light volume, while UnitedHealth also edged up into the buy zone in light trade. The RS line for ANTM stock has been trending solidly higher for several months.
Tesla Stock
Tesla stock rallied 3.7% to 871.60, reclaiming its 21-day and 200-day moving average, though in below-average volume. Thursday's move might look like an early entry, but it would be highly risky with TSLA stock still below its fast-falling 50-day line and some other short-term resistance.
For now, the official buy point is 1,208.10, with a shallow trendline offering an early entry around 1,150. Ideally, Tesla stock would build the right side of a base and form a handle.
Tesla CEO Elon Musk on Thursday suggested that he's working on his "Master Plan Part 3," laying out his next big long-term vision.
Tesla Shanghai is closing for two days amid Covid precautions as China shuts key regions, but not Shanghai, amid a big rise in cases. On March 22, Tesla Berlin deliveries are expected to start.
Market Rally Analysis
The stock market rally rose modestly Thursday after Wednesday's follow-through day confirmed the new market rally. Just holding the 21-day moving average or even just the bulk of Wednesday's gains would have been OK, especially given the volatile market.
The Dow Jones moved above its early March high while the Russell 2000 crossed its 50-day line. The S&P 500 is closing in on both of those levels.
Wednesday was a Day 15 follow-through day for the S&P 500 and Dow Jones. The Nasdaq composite led Wednesday's gains, but it was just day two of a rally attempt after undercutting its Feb. 24 lows on Monday. The Nasdaq could stage its own FTD starting Friday.
Not all follow-through days work. The Jan. 31 FTD soon fizzled, though not right away. But it's still a positive signal that institutional investors are supporting a new market rally.
Also, there are more leading stocks setting up or flashing buy signals now than in early February. But it's still unclear which sectors will actually lead. Energy stocks were strong again, as crude oil rebounded back above $100. Other commodity plays still look robust.
Some drug and biotech stocks have acted well while health insurers such as ANTM stock are nudging into buy zones. Chip and networking stocks such as Rambus, Arista and JNPR stock are flashing buy signals.
Discounters, building materials, defense and even some REITs are potentially interesting.
High P-E stocks have continued to rebound after leading the downside for months. But a rising-rate environment is not ideal for these stocks. If these are going to work, however, Tesla stock looks as well positioned as any.
Ideally, the stock market rally will be broad-based, with leadership from an array of industries. The NYSE and Nasdaq advance-decline lines have a had a few good days, but have generally struggled for more than a year.
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What To Do Now
With the stock market rally now in a confirmed uptrend and adding to gains, investors can add to their exposure. But do so carefully, with modest increases as the market and your positions make progress.
Don't get too concentrated in a particular sector. Any specific sector faces an outsize risk of a negative reversal or simply lagging the overall advance. Try to build a diverse portfolio of leading stocks, a tricky task when market leadership is still unclear.
So build those watchlists. Cast a wide net to keep in tune with different areas of the market, but keep a close eye on a select group of stocks that are at or near buy points.
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.
