The Dow Jones Industrial Average rallied nearly 200 points Thursday, as the stock market aimed to extend its two-day rebound. Tesla stock dropped early Thursday, as it tests a key resistance level. The stock market will be closed Friday for the Christmas holiday.
Among the Dow Jones leaders, Apple (AAPL) rose 0.15% Thursday, while Microsoft (MSFT) gained 0.1% in today’s stock market. Also on the Dow 30, Home Depot (HD) continues to rebound from support, while Nike (NKE) battled to retake a key level.
Electric-vehicle leader Tesla (TSLA) traded down 0.5% Thursday. Its rival, Rivian (RIVN), lost 0.2%. Lucid Group (LCID) was down 0.5%. And Chinese EV leaders Li Auto (LI) and Xpeng Motors (XPEV) were lower after Thursday’s open.
Among Thursday’s top stocks to buy and watch, Arista Networks (ANET), Icon (ICLR) and Mosaic (MOS) are in or near new buy zones. Keep in mind that investors should be cautious with new purchases amid the stock market’s year-end volatility.
Dow Jones Today: Jobless Claims
After the stock market open Thursday, the Dow Jones Industrial Average rose 0.5%, while the S&P 500 moved up 0.5%. The tech-heavy Nasdaq composite rose 0.2% in morning trade.
Elsewhere, the 10-year Treasury yield traded up to around 1.47% Thursday morning, following its close at just below 1.46% Wednesday.
Early Thursday, the Labor Department reported weekly jobless claims of 205,000, down from the previous week’s 206,000 and matching Econoday estimates. Meanwhile, consumer spending met estimates, rising 0.6% month over month, slower than October’s 1.3% increase. Personal income rose less than forecast at 0.4% in November, per Econoday.
Stock Market Rally
The stock market posted more strong gains Wednesday, as the major stock indexes added to Tuesday’s rebound. The tech-heavy Nasdaq closed just above its 50-day moving average, a positive signal, but a decisive move higher from here would be more significant to the market outlook.
Despite Wednesday’s strength, the market remains in a tenuous position. During extended periods of volatility and weakness, be extra demanding and focus only on stocks showing exceptional fundamental and technical strength.
After Wednesday’s session, the Big Picture commented: “Despite two days of strength, IBD’s market outlook remains at a cautionary “uptrend under pressure.” Until the market outlook moves back into a confirmed uptrend, investors should still be mostly on the sidelines due to a whipsaw market environment. But some top stocks aren’t waiting for a confirmed uptrend to break out. Investors can make purchases, but be aware that risk is higher at this point.”
For daily stock market commentary, check out IBD’s The Big Picture.
Stocks On The Move: JD
Chinese e-commerce leader JD.com (JD) tumbled 8% Thursday after the nation’s internet giant, Tencent (TCEHY), announced it will be giving most of its JD shares away to shareholders in a one-time dividend. JD shares closed Wednesday more than 30% off their 52-week high.
Dow Jones Stocks To Watch: Home Depot, Nike
Home Depot stock rallied 1.3% Wednesday, rising for a third straight day, as the home improvement chain continues to rebound from its 50-day support level. Shares are in a buy zone on a rebound from support. After recent losses, Home Depot is the No. 2 Dow Jones performer in 2021, up 49% year-to-date through Wednesday’s close, just short of Microsoft’s 49.8% advance. HD shares gained 0.25% Thursday.
Dow Jones retail leader Nike is tracing a new flat base that has a buy point at 179.20, according to IBD MarketSmith chart analysis. Shares are fighting to retake their 50-day line following Wednesday’s 0.7% decline. NKE stock moved up 0.2% Thursday.
Stocks To Buy And Watch: Arista, Icon, Mosaic
IBD 50 stock Arista Networks is moving further above a flat base‘s 134.24 buy point following Wednesday’s 1.2% gain. The 5% buy area tops out at 140.95, so the stock is trading at the top of the range. ANET stock shows a strong 97 out of a perfect 99 IBD Composite Rating, according to the IBD Stock Checkup. Shares were up 0.4% Thursday.
IBD Leaderboard stock Icon is breaking out past a 301.82 buy point in a consolidation, according to IBD MarketSmith chart analysis. Shares surged 7.2% Wednesday, ending in the 5% buy area, which runs to 316.91. Per Leaderboard commentary, Icon also cleared resistance around 290, which served as an early entry. Icon stock lost 1% Thursday.
IBD SwingTrader stock Mosaic bullishly reclaimed its 50-day moving average during Wednesday’s 3.7% climb. The stock is forming the right side of a cup base with a 43.34 buy point. Be on the lookout for a handle to offer a more risk-optimal entry. Shares rallied 0.1% Thursday.
EV Stocks: Li Auto, Xpeng, Lucid Motors, Rivian
Li Auto continues to work on the early stages of a new base following the 7%-8% loss-cutting sell rule below a cup-with-handle base’s 34.93 buy point. Shares are below their 50-day line and are finding support around the long-term 200-day moving average. Shares moved down over 1% Thursday.
Xpeng Motors triggered the round-trip sell signal from a 48.08 buy point during early December’s sharp sell-off. XPEV shares continued to rebound from their 200-day line Wednesday, and the 50-day moving average will be a key test of strength. Wait for the stock to form a new base, which would offer a new entry. Shares were down nearly 2% Thursday morning.
Lucid Motors shares looked to add to Wednesday’s 1.8% gain, but fell 0.5% Thursday morning. LCID stock remains extended past a 28.49 buy point in a cup-with-handle base, but huge gains have faded. Shares are trying to find support at their 50-day line, but are having some trouble getting back above that level.
Recent initial public offering Rivian inched lower Thursday, looking to rebound from Wednesday’s 0.5% loss. RIVN shares closed Wednesday about 46% off their post-IPO highs, rebounding from Monday’s all-time lows. Continue to wait for an IPO base to form before considering a purchase. Recent sharp losses are a significant setback in the stock’s basing process.
Tesla stock dropped 0.5% Thursday, threatening to fall after Wednesday’s 7.5% surge after Chief Executive Elon Musk said that he had sold “enough stock” to reach his plan to sell 10% of his shares in a podcast interview. He later tweeted, “There are still a few tranches left, but almost done.” On Wednesday, Musk sold more than 934,000 Tesla shares, valued at around $928.6 million, to cover tax withholdings, according to regulatory filings. He also exercised more than 2.1 million Tesla stock options.
On Monday, the stock closed at its lowest level since Oct. 21. Last week, the stock broke down through its key 50-day support level. Shares are approaching that level, and a test of that resistance area is a critical crossroads for the stock.
Shares traded as high as 1,243.49 on Nov. 4, but the stock ended Wednesday about 19% off its 52-week high.
TSLA shares remain sharply above a 764.55 buy point in a cup with handle. The EV giant is working on a new base, but with the stock just off recent lows, the current formation needs more time develop before a correct buy point emerges.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple stock made it two straight up days Wednesday with a 1.5% gain. The stock is about 15% above a 153.27 buy point out of a cup-with-handle base, according to IBD MarketSmith chart analysis. Shares rose 0.15% Thursday.
Software giant Microsoft decisively regained its 50-day line during Wednesday’s 1.8% rise, placing the top Dow Jones stock in a new buy area. MSFT shares moved up 0.1% Thursday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
YOU MAY ALSO LIKE: