Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures, were lower late Monday after the brief intraday stock market plunge. Apple and Tesla stock surged to record highs Monday, while Dow Jones leader Microsoft is breaking out past a new buy point.
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The stock market plunged midday Monday, only to spend the rest of the session recovering amid a sharp increase of volatility. At the stock market open, the tech-heavy Nasdaq composite advanced as much as 1.4% to record highs. Then, the composite quickly erased its gains and sold off 1.3% before eventually closing with a 0.7% gain. The Dow Jones Industrial Average edged just 0.1% lower, or 36 points, while the S&P 500 rallied 0.4%.
Among the Dow Jones leaders, Apple (AAPL) rallied nearly 3%, while Microsoft (MSFT) rose 1.6%. Apple stock is in a new buy zone, while Microsoft broke out above a new buy point. Microsoft earnings are due late Tuesday.
Tesla (TSLA) set more all-time highs Monday, racing more than 4% higher.
Stocks in or near buy zones in the current stock market rally are Datadog (DDOG), Palantir Technologies (PLTR) and Pinduoduo (PDD).
Apple, Microsoft, Pinduoduo and Tesla are IBD Leaderboard stocks. Palantir was Friday’s IBD Stock Of The Day, while Microsoft and Datadog were featured in this week’s Stocks Near A Buy Zone. Datadog was also Monday’s IBD Stock Of The Day.
Dow Jones Futures Today
Late Monday, Dow Jones futures fell 0.3% vs. fair value, while S&P 500 futures lost 0.25%. Nasdaq 100 futures traded down 0.3% vs. fair value. Remember that trading in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Among exchange traded funds, Innovator IBD 50 (FFTY) fell 0.4% Monday. The Nasdaq 100-linked Invesco QQQ Trust ETF (QQQ) traded up 0.8%. Meanwhile, the SPDR S&P 500 ETF (SPY) rallied 0.4%.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 30960.36 | -36.62 | -0.12 |
| S&P 500 | (0S&P5) | 3855.34 | +13.87 | +0.36 |
| Nasdaq | (0NDQC ) | 13635.99 | +92.93 | +0.69 |
| Russell 2000 | (IWM) | 214.96 | -0.04 | -0.02 |
| IBD 50 | (FFTY) | 46.02 | -0.19 | -0.41 |
Last Update: 4:26 PM ET 1/25/2021 |
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Coronavirus Updates
According to the Worldometer data tracker, the cumulative number of confirmed coronavirus cases in the U.S. topped 25.7 million on Monday. Total virus-related deaths rose past 429,000.
The cumulative total of worldwide Covid-19 cases confirmed since the start of the outbreak topped 99.9 million Monday, with more than 2.1 million virus-related deaths.
Coronavirus Stock Market Rally
Looking back at the current uptrend, November was a key month for the stock market. IBD’s The Big Picture flagged the new uptrend following the market’s bullish follow-through day on Nov. 4. Meanwhile, more than halfway through January, the Dow Jones Industrial Average, Nasdaq and S&P 500 made record highs.
Friday’s Big Picture warned of extreme bullish sentiment, “When it comes to overall market health, major stock indexes aren’t under meaningful distribution. That’s a good thing, but bullish sentiment remains at extreme levels and more, and more people seem to be talking about how easy it is to make money in the stock market. Extreme bullishness is reason to trade cautiously.”
Investors should continue to use the stock market’s strength to buy breakouts. However, be more flexible in today’s stock market environment. As illustrated Monday, the stock market can fall quickly for no reason.
Be patient and wait for powerful breakouts instead of chasing extended stocks. If the new breakouts work, then add more exposure. But if breakouts start to fail, then you can back away.
In particular, focus on stocks with strong relative strength. Find them by using the relative strength line. The RS line measures a stock’s price performance vs. the S&P 500. If the stock is outperforming the broader market, then the RS line angles upward. If a stock is performing worse than the broad market, then the line will point lower.
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Dow Jones Earnings: Microsoft
Dow Jones leader Microsoft will report earnings after the stock market close Tuesday. Analysts expect the company to earn $1.64 a share on revenue of $40.2 billion.
Shares of the software giant broke out past a 228.22 buy point and are in buy range. The stock ended just above the entry amid a 1.6% rise.
Stocks In Or Near Buy Zones: Datadog, Palantir, Pinduoduo
Datadog briefly topped a 111.59 buy point in a cup with handle, according to IBD MarketSmith chart analysis. Shares are about 2% below the entry following Monday’s 3.8% advance.
According to IBD Stock Checkup, Datadog stock shows an 88 out of a perfect 99 IBD Composite Rating. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths.
Friday’s IBD Stock Of The Day, Palantir Technologies, soared as much as 21.5% to break out past a 33.60 buy point. Shares cut their gains, but still closed up more than 11%. The stock ended Monday out of the 5% buy zone that goes up to 35.28.
Bullishly, the stock’s RS line made a new high on the breakout day, signifying strength. The relative strength line measures a stock’s price performance vs. the broad market.
IBD Leaderboard stock Pinduoduo staged a breakout attempt above a 187.80 buy point in a rare ascending base. But shares slashed their gains to 5%, ending about 4% below the entry.
According to IBD Leaderboard commentary, “The ascending base is a late-stage base, so it’s risky at this stage. Investors who’ve owned Pinduoduo from earlier buy points have the option to take profits. Notice, however, that in recent months the 10-week moving average has served as a solid backstop.”
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Tesla Stock Sets Record High
IBD Leaderboard stock Tesla surged to record highs Monday, rallying as much as 6.35% before closing with a 4% gain.
The Jan. 8 IBD Stock Of The Day column signaled that Tesla was flashing several signs of a climax top amid a sharply vertical run over the past few weeks. But so far the stock is showing tremendous resilience, and it hit record highs Monday.
On Monday, Tesla stock hit a record high at 900.40. Shares are about 89% above a 466 buy point in a cup with handle.
Dow Jones Leaders: Apple In Buy Range
Among the top Dow Jones stocks, Apple rallied 2.8% Monday and is in buy range above a new buy point at 138.89, according to IBD MarketSmith chart analysis. The 5% buy zone goes up to 145.83.
In recent weeks, Apple shares have moved above aggressive entries at 125.49 and 122.09.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones futures.
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