Stock futures eased Monday as the market paused atop a four-week rally that left the Dow and S&P 500 sitting on record highs. Materials stocks were rising, with Freeport-McMoRan up in a buy range. Nvidia fell hard on issues raised by U.K. regulators. Coke stock led the Dow Jones today, edging higher after its Q1 report.
Dow Jones futures dipped 0.25%, S&P 500 futures took a 3% dip on the stock market today. Nasdaq 100 futures also dropped nearly 0.3% below fair value, with Tesla (TSLA) and Nvidia (NVDA) trading at the bottom of the list.
Specialty chemicals producer Albemarle (ALB), glass maker Corning (GLW) and ore miner Freeport-McMoRan (FCX) ran at the top of the S&P 500. Evercore ISI upgraded Albemarle to outperform. JPMorgan boosted Corning’s rating to overweight.
Freeport McMoRan is in a buy range above a double-bottom base buy point at 37.71.
Western Alliance (WAL) headed the IBD 50 list, up 1.7% after Wells Fargo upgraded the stock to overweight. Western surged 7.9% on Friday following its first-quarter report, ending near the stop of a buy range on a rebound from its 10-week moving average.
China-based Baidu (BIDU) topped the Nasdaq 100 with a 1% gain.
Sea Limited (SE), Square (SQ), Snap (SNAP), 10X Genomics (TXG) and Netflix (NFLX) have newly formed handles with buy points. Apple (AAPL), Amazon.com (AMZN) and Tesla (TSLA) are working on possible handles.
Coke Leads Dow Jones Today On Earnings
Coca-Cola (KO) led the week’s heavy earnings roster among Dow Jones stocks. Shares rose 0.5% to lead the index after reporting first-quarter revenue and earnings handily above analysts’ targets. Management guided toward high-single-digit, low-double-digit earnings growth for 2021.
Like many stocks in the current market, Coke stock is just below a buy point in a cup-with-handle base. Coke is a laggard on the Dow (45 Composite Rating, 34 relative strength rating). But the positive first-quarter results add one more brick to the economic recovery, and the base-and-handle chart action help to reinforce the message of rising strength in the stock market’s confirmed uptrend.
Nvidia, Tesla Stock Drags On Nasdaq
Tesla dropped 2.9% in early action. A Tesla crashed Saturday near Houston, killing the two passengers. Neither was in the driver’s seat, making it extremely likely that the Tesla was using Autopilot or Full-Self Driving features. A Q1 safety report from Tesla also showed the average distance per accident while driving on autopilot had declined, according to Benzinga.
Tesla jumped more than 9% last week, also putting in the first three days of a possible handle. A handle could become valid on a daily chart after Tuesday. The current potential buy point is at 780.89.
Market Vital Signs: Oil, Copper, Bond Yields
Oil prices held near recent highs and copper surged more than 2% early Monday.
Copper jumped more than 2%, to above $4.26 a pound. Prices struck an almost 10-year high at $4.30 on Feb. 24.
West Texas Intermediate oil held around $63 a barrel, its highest level since mid-March and up 10% from a late-March low. At the beginning of March, WTI had hit $65.05, its highest price since January 2020.
Copper and oil prices are both important indicators of confidence in the global economy.
Bond yields continued lower, with the 10-year yield trading at 1.56%, after settling at 1.57% on Friday, according to CBOE data. Yields last week experienced their worst week since July as traders piled back into bonds, a safe haven shelter.
Bitcoin’s Weekend Dive
Bitcoin prices staged a mild bounce, up almost 2% to trade above $56,000 early Monday, after taking a steep dive on Saturday and Sunday, according to CoinDesk. Bitcoin ran up to a new high above $64,800 on Wednesday, ahead of the Coinbase Global (COIN) IPO. Shares dropped below $54,000 on Sunday, but the cryptocurrency remains up more than 90%, after starting the year just above $29,000.
Shares of cryptocurrency exchange Coinbase Global (COIN) jumped 36.8% in their first few days of trading last week. The Coinbase IPO priced initially at 250, and Coinbase stock dipped 3.1% early Monday.
CAN SLIM rules advise against jumping into IPOs too early, amid all the initial offering speculation and excitement. It is better to sit and watch the new stock’s chart. Waiting for it to form and breakout from an IPO base helps limit downside risk.
Nasdaq ETF Breakouts
The Invesco QQQ Trust (QQQ) last week broke out from what IBD MarketSmith analysis plots as an eight-week cup base. The ETF remained within the buy range above the 338.29 buy point. The buy zone runs to 356.25.
The leveraged ProShares UltraPro QQQ ETF (TQQQ) flashed very briefly above a 111.96 buy point on Friday. It ended a fraction below the entry, so a potential breakout is still on tap.
The last real breakout for the SPDR® Dow Jones® Industrial Average ETF (DIA) occurred in November. It has provided a couple buy opportunities on rebounds from 10-week support. The fund ended Friday 18% above its November buy point. For the S&P 500, the SPDR S&P 500 ETF Trust (SPY) is also extended from a November breakout.
Dow Jones Stocks: American Express, Intel Earnings
Johnson & Johnson (JNJ) reports Tuesday. Verizon (VZ) reports Wednesday. American Express and Honeywell (HON) report on Friday. Honeywell is extended from a March breakout. Verizon and Johnson & Johnson are basing, but both have work to do before they would be watchlist worthy stocks.
American Express has formed a tight, five-week flat base sitting atop 10-week support. The buy point is at 151.56, and the stock has easily outpaced the market so far this year, up 25% since Dec. 31. The stock has a weak Composite Rating of 56. And while its relative strength rating is low, at 75, its relative strength line has climbed sharply since October.
Intel‘s (INTC) report on Thursday will be closely watched as a chip-sector indicator. Chip shortages and moves by the likes of Apple (AAPL) and Alphabet‘s (GOOGL) Google to manufacture their own chips have helped muddy the industry’s recovering outlook.
Intel stock has been volatile since clearing a cup-with-handle base in March. That left shares on Friday still in a buy range, which runs to 66.82.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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