Dow Jones futures were little changed after hours, along with S&P 500 futures and Nasdaq futures. FedEx (FDX) reported after the close.
The stock market continues its bullish trend, with the S&P 500 nearing all-time highs and the Nasdaq at the 15,000 level. Small caps made broad gains on Tuesday, as market breadth weighed in.
Nasdaq and many well-known stocks have expanded. Investors should be cautious about increasing exposure here, and may want to consider taking partial profits.
Nvidia (NVDA), Microsoft (MSFT), Super Microcomputer (SMCI) and MongoDB (MDB) are AI plays that are holding fast at or near buy zones.
Nvidia and MSFT stocks are on the IBD leaderboard. NVDA stock is on SwingTrader. Microsoft stock is on IBD’s long-term leaders. Nvidia, Super Micro and MDB stocks are on the IBD 50.
The video included in the article discussed and analyzed Tuesday’s market action. Weatherford (WFRD), The shadow (SAIA) and SMCI stocks.
Dow Jones Futures Today
Dow Jones futures with S&P 500 futures, low vs. fair value. Nasdaq 100 futures edged higher.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
FedEx’s earnings
FDX stock fell in overnight action as FedEx missed its fiscal Q2 revenue outlook and the shipping giant provided lower guidance. Shares fell 0.7 percent to 280 in Tuesday’s regular session. FedEx stock was boosted by a 261.92 handle buy point. But now it’s ready to round-trip that breakout.
FedEx archrival UPS ( UPS ) also fell marginally in extended action.
FedEx’s comments about the economy and the holiday shopping season will be important.
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Stock market rally
The stock market rally continues after Thanksgiving.
The Dow Jones Industrial Average rose 0.7 percent in Tuesday’s stock market trading. The S&P 500 index climbed 0.6%. The Nasdaq Composite rose 0.7 percent.
The Nasdaq has moved above 15,000 for the first time since January 2022. The composite still has some distance to its peak in late 2021, though the Nasdaq 100 is at new highs. The S&P 500 is getting very close to its January 2022 all-time high of 4,818.62. The Dow Jones is already at record highs.
The small-cap Russell 2000 jumped 1.9% to hit a fresh 2023 high.
The Nasdaq Composite is now 8.5 percent above its 50-day line, with the S&P 500 at 7.3 percent above its 50-day. Both are being extended from this key level. Indexes can rise further, but that increases the odds of a pullback, and that pullback will be more significant. Various sentiment indicators also reflect bullish sentiment.
Meanwhile, many leading stocks are above buy zones.
U.S. crude oil prices rose 1.3 percent to $73.44 a barrel, as the rally continued amid shipping concerns in the Red Sea.
The yield on the 10-year Treasury fell 3 basis points to 3.92 percent, the lowest level since July.
ETFs
Among growth ETFs, the iShares Expanded Tech-software Sector ETF ( IGV ) advanced 0.6%, with MSFT stock as a key component. VanEck Vectors Semiconductor ETF ( SMH ) gained 0.5%. Nvidia stock is the No. 1 holding in SMH.
Reflecting the more speculative storied stocks, the ARK Innovation ETF ( ARKK ) gained 4.1 percent and the ARK Genomics ETF ( ARKG ) gained 6.8 percent.
The SPDR S&P Metals & Mining ETF (XME) gained 3.1% and the Global X US Infrastructure Development ETF (PAVE) gained 1.2%. The SPDR S&P Homebuilders ETF ( XHB ) gained 1.4%. The Energy Select SPDR ETF ( XLE ) gained 1.2% and the Healthcare Select Sector SPDR Fund ( XLV ) rose 0.7%.
The Industrial Select Sector SPDR Fund ( XLI ) added 0.8%. Financial Select SPDR ETF ( XLF ) gained 0.75%.
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Nvidia stock
Nvidia stock fell 0.9% to 496.04, finishing near session highs and holding off a double-bottom base. Buy point is 476.09. NVDA stock is on track to find a flat base after Friday with a 505.48 buy point.
Nvidia is the AI company and AI stock of 2023. But it has not been progressing for the past few months. Is the torch being passed or is it ready for another big move in 2024?
Microsoft stock rose 0.2 percent to 373.26 on Tuesday. Shares remain above the 366.78 cup base buy point and find support above the trend line. On the weekly chart, MSFT stock now has a four-week high, with an official buy point of 384.30. Investors can buy the Dow Tech Titan here or at a hard entry. A move above 377.64 will clear some short-term resistance.
MongoDB Stock
MDB stock fell 0.7 percent to 409.78 on Tuesday. Shares are still just below the valid 412.67 buy point with a handle buy point with a cup. MongoDB stock suffered an ugly post-earnings sell-off earlier this month, but has rebounded from the 10-week line. In the short term, a move above the December 14 high of 425.51 could offer an entry. Alternatively, investors can wait to see if MongoDB stock calms down and establishes a new plateau.
Super Micro Stock
SMCI stock fell 1.9% to 315.94 on Tuesday, an intraday low. That was within a day of Monday’s 7.4 percent jump and snapped up a nearly 23 percent advance in five sessions. Super Micro stock is still above the 306.52 early entry, though it is now slightly below the 317.50 entry.
Super Micro has had a somewhat ugly four-month consolidation, but AI server play looks better on the weekly chart. Ideally, SMCI stock will form a handle around current levels.
Time the Market with IBD’s ETF Market Strategy
What should be done now?
The stock market continues to boom. Another pause or pullback would not be surprising, but the overall picture remains positive.
In the short term, investors may consider buying additional, taking profits, or some combination of the two. But standing large is a good strategy with current exposure levels.
Work on your watch list. If you are not finding many stocks that are viable, this is an important indicator.
Also start working on the 2023 review of your business. Perhaps focus on your best and worst trades of the year to see what you did right and where you could improve. Did you follow your rules? Do you need to modify some of your rules?
Also check out some of the 2023 big winners that you’ve edged out to see how you can join next year’s leaders.
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