Dow Jones futures were little changed after hours, along with S&P 500 and Nasdaq futures. Revenue from DocuSign and a Tesla charging deal with General Motors (GM) were in focus overnight.
The stock market rally showed modest to solid gains Thursday on major indexes, with the Nasdaq rebounding somewhat from Wednesday’s downward reversal. Meanwhile, small caps and mid caps fell slightly, exiting many of the dips and giving up only part of their recent advances.
Dow Jones Giant Boeing (BA), Cardinal Health (ACH), Floor and decor (NDF) and Therapeutic TG (TGTX) are in the buy zones.
So is Semiconductor manufacturing in Taiwan (TSM). Taiwan Semi is the world’s largest chip foundry, manufacturing semiconductors for Nvidia (NVDA), Apple (AAPL), Qualcomm (QCOM) and many others. Taiwan Semi reports May sales early Friday.
You’re here (TSLA) extended a record streak of high volume bull days on Thursday. After the close, news broke that General Motors would use Tesla’s superchargers and charging technology. This follows a similar deal with Ford engine (F) announced at the end of May. TSLA and GM stocks both rallied in an extended trade.
DocuSign (DOCU) released fiscal first-quarter results Thursday evening. DOCU stock rose solidly in extended trading on its earnings and guidance. The digital document and e-signature software company is working on a base buy point of 69.45, resuming its 200-day line at the end of May. DocuSign stock rose 2.2% to 58.48 on Thursday.
Tesla and Nvidia shares are on the IBD ranking. BA stock was added to SwingTrader on Thursday, joining FND stock. Floor & Decor was Thursday’s IBD stock of the day.
Dow Jones Futures Today
Dow Jones futures fell 0.1% from fair value. S&P 500 futures fell slightly and Nasdaq 100 futures rose. Tesla stock is a major member of the S&P 500 and the Nasdaq 100.
Remember that overnight action on futures contracts on Dow Jones and elsewhere does not necessarily translate into actual trading in the next regular trading session.
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Stock market rally
The stock market rally gradually improved throughout Thursday, with indices closing near session highs.
The Dow Jones Industrial Average rose 0.5% in trading Thursday. The S&P 500 index climbed 0.6%. The Nasdaq composite jumped 1.0%. The small-cap Russell 2000 fell 0.4%.
U.S. crude oil prices fell 1.7% to $71.29 a barrel.
The 10-year Treasury yield fell 7 basis points to 3.71%.
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) climbed 0.8%, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 0.5%. The iShares Expanded Tech-Software Sector ETF (IGV) rebounded 1.3%. The VanEck Vectors Semiconductor (SMH) ETF rose 1.2%. The stock TSM is a huge SMH component, along with Nvidia.
Reflecting more speculative historical stocks, ARK Innovation ETF (ARKK) rose 1% and ARK Genomics ETF (ARKG) fell 0.1%. Tesla stock is the top position among Ark Invest’s ETFs.
The SPDR S&P Metals & Mining ETF (XME) fell 0.2% and the Global X US Infrastructure Development ETF (PAVE) edged down 0.1%. The US Global Jets ETF (JETS) climbed 0.6%. The SPDR S&P Homebuilders ETF (XHB) fell 0.35%, with FND stock a notable XHB holding. The Energy Select SPDR ETF (XLE) fell 0.4% and the Health Care Select Sector SPDR Fund (XLV) climbed 0.6%.
The Financial Select SPDR ETF (XLF) lost 0.1%. The SPDR S&P Regional Banking ETF (KRE) fell 1.2%.
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Stocks in shopping areas
Boeing stock rose 2.9% to 218.11 on Thursday, breaking past various short-term highs and a trendline, offering early entry. The volume was robust. BA stock is approaching a buy point of 221.33 from a stable base dating back nearly four months. This followed a powerful move for aerospace giant Dow from late September to mid-February.
CAH stock climbed 2.5% to 85.33, bouncing off the 21-day and 10-week lines and breaking a short downtrend in a small consolidation just above a cleared five-month base decisively at the beginning of May. Early Thursday, Cardinal Health raised the midpoint of its 2023 earnings forecast slightly and announced a $3.5 billion buyback of CAH shares.
TGTX stock rebounded 7.3% to 28.98, moving away from the 10-week line, reclaiming the 21-day line and breaking a downtrend. Stocks nearly doubled from a breakout in late March to early March before falling back. TG Therapeutics continues to lose money. Sales soared 286% in the last quarter, but only to $7.8 million. Investors could get some guidance on monthly selling next week.
FND stock fell 1.2% to 96.55 in light volume on Thursday. But that follows a 5.1% jump on Wednesday in intensive trade, reclaiming the 50-day line. The flooring retailer is still liable for this. Floor & Decor’s stock also has a buy point of 101.49 cups with handle.
TSM stock edged down 0.35% to 99.94, still above a consolidation buy point of 98.99, according to MarketSmith analysis. Taiwan Semi initially jumped into a buy zone on May 25, following earnings and advice from Nvidia. On Monday, Taiwan Semi’s stock fell near the 21-day line before paring losses. Taiwan Semiconductor will release its May sales early Friday.
Meanwhile, Nvidia stock rose 2.8% to 385.10, continuing to trade in a range after the May 25 earnings gap. NVDA stock currently doesn’t have a buying opportunity, although a tight pattern or a pullback towards, say, the 21-day line could offer chances to add stock.
Tesla stock rebounded 4.6% on Thursday to 234.86, the highest in seven months. The EV giant has now rallied for 10 sessions, the longest winning streak since 11 sessions in January 2021. But it’s a record nine straight wins in above-average volume. TSLA stock is further extended from a buy point of 207.79.
Tesla-GM charging offer
Under Thursday night’s Tesla-GM deal, General Motors will have access to 12,000 SuperChargers through an adapter next year. GM will also begin using a charging port used by Tesla starting with 2025 models. The deal will increase Tesla’s revenue, but also significantly expand charging options for GM and Ford as they ramp up production of electric vehicles.
Tesla stock jumped more than 5% late in active trading.
GM stock soared 4% overnight, signaling a move back above the 200-day line.
Market rally analysis
The stock market rally had another constructive day, with Wednesday’s losers generally finding support while recent big gainers resisted significant setbacks.
The Nasdaq bounced back above its 10-day line after leading Wednesday’s retreat. But it’s unclear if he can make a big leap without a longer break or step back. The composite and the Nasdaq 100 are no longer extended from their 50-day lines, but it wouldn’t take much to look stretched again.
The S&P 500 is trading just off 2023 highs and just below a 52-week high. The Dow has moved past last week’s highs and isn’t too far off the best levels of the year.
Overall, the winners and losers were roughly even, after the advanced had decisively won the previous two sessions.
The Russell 2000 and S&P MidCap 400 held almost all of Wednesday’s strong gains.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) rose 0.85%, still around 52-week highs.
The Invesco S&P 500 Equal Weight ETF (RSP) made a small gain after back-to-back gains of 0.7%.
Ideally, the Nasdaq and many top tech stocks would halt or pull back modestly for a while, while other sectors would pick up the slack with broader momentum. There are signs of this over the past week, but it may not last.
Leadership can be rotating or expanding. Currently, there are not many stocks showing buy signals.
Software was hit hard on Wednesday, although the damage on the chart depends on whether individual names were extended or whether it was recent breakouts around buy points. Some of these names can recover quickly, but others cannot. Chipmakers, which generally fared better on Wednesday, have a number of stocks showing constructive action.
Housing inventories are generally showing strength. Travel is on the move, but few stocks seem actionable right now. The BA stock is among several names in aerospace showing strength, as well as industrial machinery and games in general. Some manufacturers of biomedical and medical products are doing relatively well.
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What to do now
The stock market rally is in a confirmed uptrend, with the Nasdaq and S&P 500 at 2023 highs and some signs of improvement in magnitude. Investors may therefore seek to increase their exposure, although buying opportunities are limited.
A number of stocks from a wide variety of sectors are setting up or potentially doing so, reaching buy points and pulling back sharply. Keep your watchlists up to date.
Adapt to market conditions and leadership as they are, not as you would like them to be.
Read The Big Picture every day to stay in tune with market direction and top stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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