Dow futures fell slightly overnight, along with S&P 500 futures and Nasdaq futures. First Solar topped Tuesday night’s earnings, as Nio and other electric vehicle makers in China released key numbers early Wednesday. TSLA stock is being prepared with a Tesla investor on Wednesday night.
The stock market rally remains limited in scope, with major indices lower and lockdowns fading again. A few of the leading stocks are flashing buy signals, while others are setting up. However, the uptrend remains under pressure with a major resistance in the near term.
First Solar (FSLR), Exxon Enterprise (Axon), monster drink (mnst), Duolingo (DUOL) and a competitor to Tesla Rivian (countryside) reported late Tuesday. FSLR, Axon and Duolingo may be doable Wednesday, while Monster Beverage and RIVN decline in extended trading
early wednesday, New (nio) will release fourth-quarter earnings, with Nio, Li Auto, and XPeng (XPEV) Reporting on deliveries in February as well. Li Auto topped views on the fourth quarter early Monday and provided a bullish delivery forecast for the first quarter. China’s EV and battery giant BYD (BYDDF) February sales must be released by Friday.
China EV registrations for the week ending February 26 showed BYD registrations rising, but still well below the pace of late 2022. Nio, Li Auto and XPeng also showed an increase.
Tesla (TSLAChina’s electric vehicle registrations rebounded in the latest week but missed expectations, suggesting that domestic sales may fall below fourth-quarter levels despite deep price cuts.
All eyes will be on the Tesla Investor Day event, as the big news is set to begin at the market close on Wednesday. New Tesla EV platform expected and confirmation of planned Mexico factory. Elon Musk is planning his “Master Plan 3” and may deliver other news.
Tesla stock fell on Tuesday but is building a potential strong entry.
Dow jones futures today
Dow Jones futures lost 0.25% against fair value. S&P 500 futures fell 0.4%. Nasdaq 100 futures fell 0.45%.
nvidia (NVDA) filed for a $10 billion mixed stock shelf offering. NVDA stock declined slightly as trading continued.
The 10-year Treasury yield rose 3 basis points to 3.94%.
Crude oil futures fell.
The ISM Manufacturing Index for February will be released at 10 AM ET.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
FSLR stock rose 4% on extended measures after First Solar reported a smaller-than-expected fourth-quarter loss, direct revenue and bullish outlook. First Solar advanced 1.8% on Tuesday to 169.14, up from the 50-day line and breaking the trend line, providing early entry regardless of profit risk. FSLR stock has 185.38 buy points from the shallow consolidation.
AXON stock rose about 4% in late trading as Axon’s earnings topped the views. Shares of Taser, the maker of body cameras, rose 2.7% to 200.31 on Tuesday. This is in a range of 193.95 buy points. Investors can use 205.09 as an alternative entry.
MNST stock fell nearly 4% overnight as Monster Beverage’s earnings and sales declined. Shares fell 0.55% on Tuesday to 101.76, below the 50-day line. Monster Beverage stock has 104.75 buys from a deep flat base of 6%, part of a bottom-up formation. Stocks broke out on February 15th but immediately fell back. Centennial Holdings (CELH), Monster’s smaller, faster-growing competitor, on Wednesday night.
DUOL stock jumped nearly 8% in overnight trading after losing Duolingo and revenue outpacing views, as active users increased. Duolingo rose 2% to 90.79, bouncing off the 200-day line and closing directly at the 21-day line. DUOL stock could make an early entry on Wednesday if it breaks the sharp downtrend of a handle from a deep cup base. The official buy point is 105.56.
RIVN stock fell 10% as Rivian reported a smaller-than-expected loss, but revenue fell. The luxury electric car maker expects production to nearly double in 2023 to 50,000 vehicles, but that’s less than a hit. Rivian stock rose 4.6% to 19.30 Tuesday, back above the 50-day line but well below the 200-day line.
Stock market rise
The stock market rally tried to make headway on Tuesday but melted away in the late afternoon.
The Dow Jones Industrial Average fell 0.7% in stock market trading Tuesday. The S&P 500 fell 0.3%. The Nasdaq Composite fell 0.1%. Small cap Russell 2000 closed just above breakeven.
US crude oil prices rose 1.8 percent to $77.05 a barrel on Tuesday. Crude oil futures fell 2.1% in February, the fourth consecutive decline.
Copper prices rose 2.2% on Tuesday but fell 3.1% for the month.
The 10-year Treasury yield fell 1 basis point to 3.91%, after reaching 3.98% on the day. This is still up 58 basis points from the intraday low on February 2nd.
Exchange Traded Funds
Among the ETFs, the Innovator IBD 50 ETF (fifty(down 0.2%, while the Innovator IBD Breakout Opportunities ETF)fit) increased by 0.2%. iShares Expanded Technology and Software ETF (IGV) increased by 0.1%. VanEck Vectors Semiconductor Corporation (SMH) was just above the break-even point.
SPDR S&P Metals & Mining ETF (XME(Boosting 1.9% and the US X Global Infrastructure Development Fund (ETF) )cradle) advanced 0.4%. American global aircraft (Planes) climbed 1.2%. Homebuilders SPDR S&P (XHB) rose 0.5%. Energy Defined Fund SPDR ETF (xle(by 1.4% and the Financial Select SPDR ETF)XLF) increased by 0.2%. SPDR Health Care Sector Selection Fund (XLV) decreased by 0.7%.
Top five Chinese stocks to watch now
Tesla Investor Day
Tesla investor day is Wednesday, with big news expected shortly after the market closes. Here are five big announcements investors are looking for, along with other potential news.
New EV platform: Tesla said it will reveal details about a new EV platform, potentially for a cheaper model that can compete in China and Europe. But how much information will Tesla provide, and when will the new model arrive? Any cheap Tesla will already face countless competitors in China, notably from BYD.
Model 3 upgrades: Tesla may confirm the long-rumored “Project Highland” Model 3 upgrade and say when it starts production.
New factory for electric vehicles: Mexico’s president said on Tuesday that Tesla will build a factory in the country near the Texas border. Tesla may also discuss a planned expansion of the Nevada plant to protect its 4,680 battery and Tesla Semi assembly.
H.W. 4.0: Tesla may tout the soon-to-launch suite of updated hardware for driver-assistance systems in Tesla EVs, with upgraded chipsets, more cameras and radar return. In 2016, Tesla said all of its electric cars were “hardware-ready” for fully self-driving.
Master plan 3: Elon Musk has hinted that he will launch his third “master plan”, outlining his vision for Tesla for the coming years. His second master plan, released in 2016, is still very much a to-do list.
Tesla is also likely to discuss expanding its energy storage business and promote its efforts in the field of artificial intelligence. There is also some speculation that the EV giant will announce a TSLA stock buyback.
Tesla shares fell 0.9% to 205.71 on Tuesday, after jumping 5.5% on Monday. The stock arguably has a cup pattern with a handle back to early November (or a very low handle on a base starting in September). This may indicate 217.75 buy points. But investors may have to wait for TSLA stock to clear its 200-day line, currently just above 221.
Tesla stock has doubled from its 0f 101.81 bear market low on Jan. 6. And a lot of that reflects the buzz of the Tesla investor’s day. So how much is this good news priced in?
Market rally analysis
The stock market rally had a relatively quiet session, fading again with the close.
The S&P 500 fell below its 50-day line after just regaining that level on Monday. The 200-day line is not much less.
The Nasdaq Composite reversed slightly lower as well, trading above its 200-day high and its lowest in 21-days.
The Dow, which has been lagging behind in recent months, fell to a two-month low and its worst close since early November.
The Russell 2000 Index, which is looking better than the major-cap indices, reached resistance at the 21-day moving line for the second consecutive session.
But the market rally is still under pressure.
The S&P 500 and Nasdaq need to hold their current levels and reclaim the 21-day lines along with the Russell 2000. The early February highs will be additional resistance. However, the 10-year Treasury yield and the US dollar are also hovering below key levels. If yields and the dollar rise, stocks will likely suffer.
The market may be on hold until investors get a fresh batch of important economic data from the Fed. The February jobs report will not be released until March 10, with the February CPI inflation report due the following week.
It’s time to market with IBD’s ETF Market Strategy
What are you doing now
The stock market rally is trading within a very narrow range. Major indices have faded from intraday highs for the second straight session.
With the S&P 500 and Nasdaq below their 21-day lines and in danger of breaching more key levels, now is the time to be patient with a large monetary position. Don’t get carried away with a strong opening.
But if the market rally shows renewed strength, investors will want to be prepared with their watchlists.
Also, don’t neglect stocks that are showing relative strength, even if they don’t have a clear buy point yet.
Read the big picture every day to stay in sync with market trend, leading stocks and sectors.
Please follow Ed Carson on Twitter at @employee For stock market updates and more.
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