Dow Jones futures had changed little on Thursday night, along with S&P 500 futures and Nasdaq futures, with Evergrande fears of default returning and Nike (BY) and Costco profits also in focus. The stock rally had another strong session, with the S&P 500 joining the Nasdaq to regain key support, while leading stocks showed strong action.
Another major batch of top stocks offered buying opportunities on Thursday.
Atkore (ATKR), Salesforce.com (CRM), Dell (DELL), Dardena Restaurants (DRI), Accenture (ACN), Devon Energy (DVN), Square (SQ), Denbury (THE), O’Reilly Auto (ORLY), Modern (MRNA), MGM Resorts (MGM), bank of America (BAC), Advanced micro-devices (AMD), Idexx Labs (IDXX), SVB Financial (SIVB), Microsoft (MSFT) and Google parent Alphabet (GOOGL) were all doable, after several others on Wednesday.
CRM stocks, Dell, Darden Restaurants, Devon Energy, Denbury, O’Reilly, MGM and SVB Financial broke through or recaptured traditional buying points. AMD stocks, Bank of America, Square, Atkore, Moderna and Idexx Labs were early entries, from rebounds above the 50-day/10-week or trendline breaks – or both. Accenture, Microsoft and Google stocks recover from the first tests of their 10-week lines.
Costco, Nike Revenue
Costco Wholesale (COST) and Nike earnings headline overnight headlines. Costco and Nike’s revenues both outperformed opinions, with the former being the best sales forecasts and the latter just missing.
Costco shares rose higher in overnight trading. COST stock may have a buying opportunity as it bounces off its 10-week line for the first time since a breakout in June.
Nike stocks fell 4% during prolonged action, contributing to losses as executives signaled supply chain problems and margin pressures in the current quarter.
Microsoft stock and Google are enabled IBD standings. Microsoft and Google stocks are also on IBD Long-Term Leaders, along with IDXX stock. Square stock and Dell are on SwingTrader. Google, Atkore and MRNA stocks are on the IBD 50. Dell stock was the IBD share of the day on Thursday.
The video in this article analyzes the stock market rally and assesses CRM stocks, Atkore and Denbury.
Dow Jones Futures Today
Dow Jones futures have risen relative to fair value. S&P 500 futures tilted higher, while Nasdaq 100 futures lost a fraction.
A major Evergrande unit made a debt payment to domestic bondholders on Thursday, and the deal was announced on Wednesday, fueling the market recovery. But Evergrande apparently missed a Thursday deadline to pay interest on dollar-denominated debt, with the Chinese real estate giant apparently failing to provide clarity.
Keep in mind that an overnight action in Dow futures and elsewhere does not necessarily lead to actual trading in the next regular trading session.
stock market rally
The stock market rally started Thursday with modest gains and quickly gained momentum, delivering strong gains for a second straight session.
The Dow Jones Industrial Average rose 1.5% in Thursday’s stock market trading. The S&P 500 index gained 1.2%. CRM stocks were easily the top Dow performer and a leading S&P 500 component, second only to Devon Energy.
The Nasdaq composite climbed 1%. The small-cap Russell 2000 shot up 1.8%.
Today is an important day to read The Big Picture.
Time the Market with IBD .’s ETF Market Strategy
One of the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 2.6% and reached an all-time high. The Innovator IBD Breakout Opportunities ETF (BOLT) won 1.9%. The iShares Expanded Tech Software Sector ETF (IGV) rose 1.6%. MSFT stock and Salesforce are key IGV components. The VanEck Vectors Semiconductor ETF (SMH) rose 1.3%, with AMD stocks taking a major foothold.
SPDR S&P Metals & Mining ETF (XME) was up 1.2% and the Global X US Infrastructure Development ETF (PAVE) recovered 1.8%. US Global Jets ETF (JETS) popped 2.75%. SPDR S&P Homebuilders ETF (XHB) increased by 0.3%. The Energy Select SPDR ETF (XLE) shot up 3.5%, with DVN shares holding a stake. The Financial Select SPDR ETF (XLF) were up 2.45%, with BAC stocks being a notable component.
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Market rally analysis
The stock market rally took another big step on Thursday to regain full strength. The Nasdaq, which regained its 50-day line on Wednesday, moved above its 21-day line. The S&P 500 and Russell 2000 retook their 50-day lines, while the Dow Jones came close to that level. Undoubtedly, all of these indices are on or above downward sloping trendlines, suggesting that the market is breaking the downward trend of recent weeks.
A market rally is judged by the action of major indices and leading stocks. And leaders look robust. Leaders held up fairly well during the pullback, and there has been a slew of bullish moves from key support levels, broken trendlines or outright breakouts, with CRM stocks, Dell, Atkore, Accenture and Devon Energy just a few examples. The breadth of leadership is also impressive, including chips, energy, building materials, banks and software.
FFTY reaching an all-time high reflects the mix of bullish moves and high fliers that barely paused.
Why this IBD tool simplifies the search for top stocks
What to do now
This was a great time to take advantage and buy top stocks of various groups from bullish entries, especially if you have significantly reduced exposure during the recent pullback. Of course, just because this article lists 17 actionable names doesn’t mean we’re taking full positions in everything from AMD stocks to Square.
The market rally has had some good sessions and gained momentum on major indices and leading stocks. But this rebound may run out. If you want to be agile with your purchases, stay alert and ready to close quickly too.
Keep building those watch lists and focus on leaders on the eve of buy signals.
Follow Ed Carson on Twitter at @IBD_ECarson for stock updates and more.
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