Dow Jones futures, S&P 500 futures and Nasdaq futures will not open again until Sunday evening, but this is a good time to research and plan. The Coronavirus stock market had some wild intraday fluctuations last week, but ended up with solid gains. The Dow Jones and S&P 500 index led, but Nasdaq claimed leadership on Friday. The wild action showed the importance of having a marketing plan game plan in advance.
Meanwhile, Tesla (TSLA), Microsoft (MSFT), United (UNH) like Apple (AAPL) as well Domino’s Pizza (DPZ), everyone is in the “friend zone.”
What does it mean? The Tesla share, the Microsoft share, the UnitedHealth share and Domino’s share are above some buying points, but also slightly below other items. The Apple stock has made several moves over a new point of purchase, but continues to close just below it. So even though these stocks are probably in buying ranges, they have clear resistance levels just above them.
Microsoft stock, Apple stock and UnitedHealth are Dow Jones components.
All three, along with Domino’s warehouse, are on the IBD Leaderboard. The Tesla share is on the Leaderboard monitoring list. MSFT bearings and DPZ bearings are available on SwingTrader. The Microsoft stock, the Domino stock and the UnitedHealth stock are all on the IBD Long-Lead Leaders list.
Join IBD experts as they analyze actionable stocks in the Coronavirus stock market on IBD Live.
Dow Jones Futures Today
The Dow Jones futures will not start trading until 6pm. ET, along with S&P 500 futures and Nasdaq futures. Remember that overnight action in Dow futures and elsewhere is not necessarily translated into actual trading during the next regular stock market session.
Coronavirus cases worldwide have cleared 6.15 million. Covid-19 deaths are 370,000.
Coronavirus cases in the United States have reached 1.81 million with deaths over 105,000.
Brazil has become the coronavirus hot spot, with Covid-19 cases just under 500,000. Despite minimal testing, Brazil is beginning to outperform the US for new daily cases. Many other countries in Latin America, Russia, India and the Middle East are seeing significant increases.
Coronavirus stock market rally
The Coronavirus stock market had some big swings, with growth shares dropping from a Tuesday peak to Wednesday morning and then recovering strongly. Shares in the real economy emerged these days, when all stocks turned lower Thursday afternoon on rising US tensions. But the stock market rally ended strongly, especially growth names, after President Trump’s China speech on Friday afternoon.
The Dow Jones industrial average jumped 3.75% last week and the S&P 500 index 3%. The Nasdaq composite climbed 1.8%, but dropped 1.3% on Friday.
IShares Expanded Tech-Software Sector ETF (IGV) was among the top ETFs 2.3% to a record close. Microsoft stock is a notable IGV component. VanEck Vectors Semiconductor ETF (SMH) fell 2.5%.
Stock Market Update: The Raging Bull Rests
Tesla stock tested its 21-day moving average intraday Wednesday, giving a mini-shakeout. The TSLA share jumped 3.6% on Friday to 835. That’s just over an early entry of 834.82. But Tesla also has an 843.39 record and a conventional 869.92 point of purchase.
Just as with the other shares on this list, if the Tesla share is going to be a real winner, it should be able to push through these other levels. An investor may try to start a position in the Tesla share and build up as it passes additional purchase items.
The relative strength of the TSLA share is just below record highs. The RS line, the blue line in the accompanying charts, tracks the performance of a stock compared to the S&P 500 index.
The normally volatile Tesla stock has traded exceptionally hard in recent weeks – but not as tight as the Microsoft stock. It’s a bullish character.
Unlike the other companies on this list, Tesla has the cloudiest prospects. There is also so much that a UnitedHealth or Domino’s Pizza will surprise investors. The uncertainty about results and profits in the short and long term is part of what drives the extreme difference between TSLA shares and bears.
Tesla’s sister company SpaceX launched a Crew Dragon capsule on Saturday with two astronauts on board. That is due to docking with the International Space Station on Sunday. A successful SpaceX mission, a historic step for private space flight, should have no bearing on the Tesla stock. But maybe so.
Microsoft shares rose 1% to 183.25 on Friday, but fell 0.1% for the week. On Wednesday, the MSFT stock fell as low as 176.60, undermining a buy point of 180.10 handle and its moving average of 21 days, but recovered to close slightly higher. Shares have found support on their 21-day line for a good time and will not close during it in two months.
So Microsoft is clearly in the buying range. But it has met resistance, with a record of 187.61. This handle-like formation is actually a four-week dense, a longer version of the three-week dense pattern. Usually, tight patterns are places for existing holders to add a few more shares. But in this case, the four-week density is simply another area of resistance in the base.
The RS line has fallen somewhat when MSFT was consolidated, but it follows a long upward trend for several months and years.
UnitedHealth stocks shot up to a record high of 309.66 last week, one of only three Dow Jones components to reach their pre-coronavirus peaks. The UNH share ended with a 5.1% weekly gain to 304.85. It squeezed shares over a 300.10 early entry and a 304.10 trading point. So it’s in a shopping zone.
But while the UnitedHealth stock peaked at its old peak on Thursday and Friday, it never closed above it. Closing an entry of 306.81 would give more confidence.
The RS line for the UNH share is not far from high.
Domino’s stock rose 3.7% last week to 385.84, with all this and more from Friday’s 5.55% peak. The DPZ share has a new flat base, next to a volatile consolidation, with a buy point of 387.95, according to the MarketSmith analysis. On Friday, the DPZ share rose above 386.05, which can be seen as an early entry. Friday’s movement could be seen as actionable from a swing trading perspective, which is why Domino’s stock was added to SwingTrader.
The RS line has withdrawn when the DPZ share has been consolidated for several weeks, but this follows a strong development.
Apple shares dipped 0.3% to 317.94 last week. The AAPL share has a 319.79 buy point. It is an alternate entry in a daily chart or an official buy-with-handle point of sale on a weekly schedule. Three times last week, the Apple stock cleared the 319.79 intraday, but never closed above it. Shares were in buying range with about 30 minutes left in Friday’s trading, but then gave up profits even as the coronavirus stock market continued to climb.
The RS line for the AAPL share has fallen somewhat recently but is near record highs following a solid trend.
Game Plan Stock Market Rally
During last week’s volatile efforts in the corona virus stock market, there was a strong argument for buying, selling or holding.
In retrospect, investors should have bought growth stocks as they recovered from key levels of support Wednesday morning. But to do that, you have to be exceptionally quick, ready to reduce market rally losses and these stocks fall below losses.
If you were heavily invested and saw huge declines over your shares from Tuesday’s intraday high to Wednesday’s low, it would be a sensible strategy to parry certain holdings. Sure, the big indices have risen and growth stocks have recovered from support levels, but at that moment it wasn’t clear.
With growth stocks retreating but generally not breaking – or closing under – key support, investors could have simply decided to hold on to current positions pending further development. Looking at weekly charts and waiting until the end of the week to make major portfolio decisions can help avoid trading with whipsaw infringement today.
Lastly, it is important to review your stocks and portfolio frequently, update your game plan and lines in the sand in advance. You may not always be right. You can sell a stock that breaks at a key level, just for it to recover. But you set your rules – informed by your previous hits and misses – to maximize profits and minimize losses over time.
To provide balance in your portfolio
A portfolio strategy is to not only have high-growth growth shares, but also to include some quality names from other areas.
The Tesla stock is indeed a volatile name, but the Apple stock, Microsoft stocks are tech-titans with large capsules that aren’t as prone to massive intraday fluctuations. The UnitedHealth share and Domino’s stock are beyond technology. While the growth names had a wild week, the UNH share and the DPZ share had strong gains.
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