Dow Jones futures were little changed Friday morning, along with S&P 500 futures and Nasdaq futures, heading into the final trading day of 2023.
The stock market rally had a quiet day Thursday, with the major indexes little changed.
Tesla pulled back below an early buy point. Recent IPO Arm Holdings continued its strong run from a breakout earlier this month, moving into a profit-taking zone. Cybersecurity giant Palo Alto Networks became the latest leading stock to find support at the 21-day moving average. Weatherford International fell modestly from near a buy point, but continues to weather weak energy prices well.
Tesla stock and Arm are on IBD Leaderboard. PANW stock is on the IBD Big Cap 20.
Dow Jones Futures Today
Dow Jones futures were slightly above fair value. S&P 500 futures edged higher and Nasdaq 100 futures tilted lower.
The 10-year Treasury yield edged up to 3.88%.
Crude oil prices rose slightly.
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 had another low-key session for the major indexes.
The Dow Jones Industrial Average rose 0.1% in Thursday's stock market trading. The S&P 500 index edged higher, with TSLA stock the worst performer. The Nasdaq composite closed just below break-even. The small-cap Russell 2000 fell 0.4%, backing off a 20-month high.
The Dow Jones hit a fresh all-time high Thursday with the S&P 500 within 1% of doing so.
Various overbought and sentiment indicators suggest the market rally could be due for a pause or pullback. The Nasdaq is 7.8% above its 50-day moving average.
U.S. crude oil prices slumped 3.2% to $71.77 a barrel, a second straight decline after running up over the prior two weeks.
The 10-year Treasury yield rose 6 basis points to 3.85%, recouping much of Wednesday's tumble to a five-month low.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF lost a fraction, with PANW stock a significant component. The VanEck Vectors Semiconductor ETF also closed just below break-even.
Reflecting more-speculative story stocks, ARK Innovation ETF dipped 0.2% and ARK Genomics ETF rose 1.7%. Tesla stock is still a major holding across Ark Invest's ETFs.
SPDR S&P Metals & Mining ETF fell 1%. SPDR S&P Homebuilders ETF declined 0.3%. The Energy Select SPDR ETF slumped 1.5% and the Health Care Select Sector SPDR Fund rose 0.3%.
The Industrial Select Sector SPDR Fund edged up less than 0.1%. The Financial Select SPDR ETF climbed 0.3%.
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Tesla Stock
Tesla stock fell 3.2% to 253.18, back below a 259.84 early entry that it cleared on Wednesday. The official buy point is 278.98 from a double-bottom base. The relative strength line is still in a five-month slump, but did recently hit a two-month high.
While Thursday's decline was an outside, downside reversal, TSLA stock has still doubled in 2023 even with Tesla earnings falling and analysts slashing estimates through 2024.
Ideally, Tesla stock would pull back to at least the 21-day line, forging a true handle with some depth.
Shares edged higher Friday morning.
Tesla will release fourth-quarter and full-year delivery figures on or about Tuesday, Jan. 2.
Arm Stock
Arm stock rose 4.3% to 77.47, with the RS line hitting fresh highs as well. The U.K. wireless chip design giant has surged 19% from a 64.92 cup-with-handle IPO base buy point cleared earlier this month. Intraday, ARM stock moved into the 20%-25% profit-taking zone, often a good place to take partial or full profits. However, when a stock runs up 20% from the buy point in just a few weeks, investors may want to hold it for a longer period to see if it turns out to be a big winner. The eight-week hold rule is more of a guideline than a rule, however.
Whether or not investors take partial profits in ARM stock or similar situations depends on individual investing strategies as well as what kind of market it is. This is a strong market rally, but also one that may be due for a pullback.
ARM rose slightly Friday.
Palo Alto Stock
PANW stock edged down 0.65% to 295.58, pulling back to the 21-day line for the first time since breaking out from a flat base in late November. Shares reversed from a record 318 on Dec. 14, just shy of the 20%-25% profit-taking zone. Shares have generally retreated modestly in lighter volume since then.
A bullish move from the 21-day line could offer an add-on or aggressive entry for Palo Alto stock.
Weatherford Stock
WFRD stock fell 1.7% to 98.95 on Thursday. On Wednesday, shares reversed from a record 102.65 to close slightly lower, just below a 100.93 cup-base buy point. On both days, blame declining crude oil prices. But as with a steep decline in oil prices from late September to early December, Weatherford stock is holding up much better than most energy stocks. If crude oil prices can rebound in 2024, WFRD stock could have another strong run.
Market Rally Analysis
The stock market rally still looks great. A pullback could be on the horizon, but that could be constructive.
Not a lot of stocks are flashing buy signals, but there are a number of leading stocks like Palo Alto that are finding support at their 21-day moving averages after solid runs. Others are forging tight entries that could develop into new bases with a little more time.
So while it's not a time to be aggressive, it is time to be looking for emerging handles, pullbacks and other opportunities.
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