The Dow Jones Industrial Average rallied 300 points Monday, as the price of Bitcoin briefly dropped below $48,000. Lucid stock plunged 17% on news of a Securities and Exchange Commission probe, while Tesla threatened to add to last week’s sharp losses as it nears a key support level.
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Among the Dow Jones leaders, Apple (AAPL) was up more than 2% early Monday, while Microsoft (MSFT) traded down 0.3% in today’s stock market. Nike (NKE) inched higher, still below a buy point after Friday’s modest gain.
Electric-vehicle leader Tesla (TSLA) dropped over 5% Monday. EV peer Rivian (RIVN) was up nearly 2%, while Lucid Group (LCID) tumbled 17%. Chinese EV leaders Li Auto (LI) and Xpeng Motors (XPEV) were sharply mixed after Monday’s open, trying to rebound after Friday’s sharp losses.
Among the top stocks to buy and watch, Endeavor Group (EDR), NXP Semiconductors (NXPI) and Pfizer (PFE) are in or near new buy zones. Recent stock market weakness suggests investors should be developing watchlists, and for the time being avoid making new purchases.
Microsoft and Tesla are IBD Leaderboard stocks. NXP is an IBD SwingTrader stock. Pfizer was spotlighted in last week’s Stocks Near A Buy Zone story. Endeavor is featured in last week’s IPO Leaders story.
Dow Jones Today: Bitcoin Tumbles
After the stock market open Monday, the Dow Jones Industrial Average rose 1%, as rebounding oil prices drove Chevron (CVX) to the head of the index. The S&P 500 moved up 0.6%, while the tech-heavy Nasdaq composite lost 1%.
Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 0.2% Monday, while the SPDR S&P 500 ETF (SPY) ascended 0.4%.
Elsewhere, the 10-year Treasury yield traded around 1.4% Monday morning. It closed Friday just above 1.34%.
Bitcoin traded as low as $47,261 early Monday before paring some losses. The price of Bitcoin had plunged below $46,600 early Saturday, down from above $56,800 on Friday. Proshares Bitcoin Strategy ETF (BITO) plunged more than 9% in Monday morning trade, hitting a new low. Cryptocurrency exchange Coinbase (COIN) slid 4.5% Monday.
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Stock Market Correction
The stock market again posted losses Friday, as the Nasdaq dropped below a key support level at the 50-day moving average.
Following the session, The Big Picture commented: “The S&P 500 and Nasdaq composite sold off for the fourth time in the past six sessions, closing with losses of 0.8% and 1.9%. In doing so, the indexes undid the promising action of the prior day, and in some ways worsened the stock market’s picture.”
The stock market outlook was downgraded on Friday, so it’s an important time to read IBD’s The Big Picture.
Five Best Dow Jones Stocks To Watch Now
Dow Jones Stocks To Watch: Apple, Nike
At the end of Friday’s session, Apple shares remained extended above a 153.27 buy point out of a cup-with-handle base, according to IBD MarketSmith chart analysis. The 5% buy zone topped out at 160.93. Apple shares moved up over 2% Monday. Ahead of Monday’s open, Keybanc started coverage with an overweight rating and a 191 price target.
Retail leader Nike shrugged off Friday’s market weakness, moving up 0.1%. Nike shares remain about 2% below their cup base’s 174.48 buy point. Shares rose 0.1% Monday.
Stocks To Buy And Watch: Endeavor, NXP, Pfizer
IPO Leader and Ultimate Fighting Championship owner Endeavor Group continues to build a cup-with-handle base with a 31.80 buy point, according to IBD MarketSmith chart analysis. Shares are about 8% away from the new entry. The stock was flat Monday.
The stock’s relative strength line is making solid upward progress and is at its highest level since early October. The RS line measures a stock’s price performance vs. the broad market. A strengthening RS line during periods of market weakness indicates leadership potential.
Chip leader and IBD SwingTrader stock NXP Semiconductors is trying to break out past a 227.60 buy point in a cup-with-handle base, but closed below the entry despite Friday’s 2% rise. Shares were down nearly 1% Monday.
Drug giant Pfizer is at the top of the buy range past a 51.96 buy point in a cup base following Friday’s 2.3% gain. The 5% buy zone tops out at 54.56. Shares fell more than 1% Monday.
Join IBD experts as they analyze leading stocks in the current stock market uptrend on IBD Live
EV Stocks: Li Auto, Xpeng, Lucid Motors, Rivian
Li Auto triggered the 7%-8% loss-cutting sell rule below a cup-with-handle base’s 34.93 buy point following Friday’s 16% skid. Shares bounced around 2% Monday and are trying to stabilize around the long-term 200-day moving average.
Xpeng Motors triggered the round-trip sell signal from a 48.08 buy point during last week’s decline. Investors should sell the growth stock if it falls back near the buy point after it has made a gain of more than 10%. Try to sell before all gains are wiped away. XPEV shares ended Friday below their 50-day line and more than 8% below the 48.08 entry. The stock moved down nearly 3% Monday.
Lucid Motors shares tumbled more than 17% Monday after the company said the SEC has requested documents related to a probe of its blank-check deal with Churchill Capital. LCID stock remains extended past a 28.49 buy point in a cup-with-handle base, but huge gains are dwindling.
Hot initial public offering Rivian was up around 2% Monday morning, as it looks to rebound from Friday’s 5.5% slide.
RIVN shares closed Friday about 42% off their post-IPO highs. The decline is a potential positive for investors remaining disciplined and waiting for an IPO base to form before considering a purchase. The recent weakness is the start of Rivian’s first base formation, but sellers are in control at this time.
Tesla Stock
Tesla stock traded down over 5% Monday, threatening to extend a three-day losing streak and add to Friday’s 6.4% tumble. Shares are set to open just above their 50-day line, a key support level.
Shares traded as high as 1,243.49 on Nov. 4, but the stock ended Friday about 18% off its 52-week high.
TSLA shares remain sharply above a 764.55 buy point in a cup with handle, as well as earlier entries at 700.10 and 730. The chart also showed an alternate entry at 900.50. Tesla shares are likely forming a new base, but there is no new buy point yet.
Dow Jones Leaders: Microsoft
Among Dow Jones stocks, software giant Microsoft moved down a fraction Monday, on pace to extend a four-day losing streak. The stock is looking for much-needed support around its 50-day line.
On Oct. 18, Microsoft stock broke out past a flat base‘s 305.94 buy point. The 5% buy zone topped out at 321.24, so the stock is extended.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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