Market Rally Roars, 5 Growth Stocks Near Buy Points; Apple, Big Earnings Due

Dow Jones futures will open on Sunday evening, along with S&P 500 and Nasdaq futures, with Apple (AAPL) and Microsoft leading the peak revenue week. The stock market rally made solid gains last week.


The 10-year Treasury yield hit new 14-year highs during the week. But yields, particularly the two-year rate, fell on Friday on a Wall Street Journal report fueling hopes of a slowdown in Fed rate hikes soon.

Major indices broke above key short-term resistance. Volatility remains fierce for indices, stocks and overnight futures.

But with some positive market signals, investors should look for potential winners in the next bull market. Snowflake (SNOW), Shift4Payments (FOUR) and DoubleVerify (DV) are fast-growing technology companies that have gone public over the past two years. lithium giant Albemarle (ALB) and Shock wave (SWAV) are also surging, their stocks trying to get back to a key level within the basics.

Meanwhile, Apple stock, Microsoft (MSFT), parent company of Google Alphabet (GOOGL), (AMZN), and Metaplatforms (META) all report next week, as well as Boeing (BA), Merck (MRK), Vertex Pharmaceuticals (VRTX) and hundreds of other companies.

Aside from Vertex and MRK stocks, both near buy points, all of the names listed above are well off the highs. Still, earnings reports could be a catalyst for big market gains, big losses, or some ups and downs in new action.

Vertex and DV stocks are on the IBD ranking as well as the IBD 50 list. Albemarle and SWAV stocks are on the ranking watch list. VRTX stock is on the IBD Big Cap 20. Microsoft and Google stocks are on the IBD Long-Term Leaders. Shift4Payments was the IBD share of the day on Friday.

Dow Jones Futures Today

Dow Jones futures open Sunday at 6 p.m. ET, along with S&P 500 and Nasdaq 100 futures.

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.

Join the experts at IBD as they analyze actionable stocks in the stock market rally on IBD Live

Stock market rally

The stock market rally attempt surged to start the week, pared gains and then rebounded again on Friday.

The Dow Jones Industrial Average jumped 4.9% in stock trading last week. The S&P 500 index jumped 4.75%. The Nasdaq composite rebounded 5.2%. The small cap Russell 2000 gained 3.6%.

Apple, Microsoft, Google and Amazon stocks all resumed their 21-day moving averages on Friday.

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Meta stock is near bear market lows, falling on Friday as Instantaneous (SNAP) plunged on its disappointing Q3 report.

Friday’s market rebound came on a Wall Street Journal report that Fed officials are eyeing slower rate hikes after a likely fourth straight move of 75 basis points at the November meeting. Markets are now tilting slightly towards a Fed rate hike of 50 basis points in December from Thursday’s 75% for another three-quarter point hike.

Clearly, there is a slew of economic data leading up to the December 14 Fed meeting.

The 10-year Treasury yield jumped 20 basis points to 4.21%, the 12th consecutive weekly gain. But the benchmark Treasury yield fell from Friday’s intraday high of 4.31%, a 14-year high.

The two-year Treasury yield, more closely tied to Fed policy, hit a 15-year high of 4.64% on Friday but reversed sharply to end at 4.48%, down 1 base point for the week.

As Treasury yields retreated from weekly highs and the Bank of Japan seemingly stepped in to support the yen, the US dollar fell sharply during the week, primarily on Friday.

U.S. crude oil futures edged up 0.5% to $85.05 a barrel last week. But natural gas prices fell 23%.


Among the top ETFs, the Innovator IBD 50 ETF (FFTY) jumped 5.6% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 4.2%. The iShares Expanded Tech-Software Sector ETF (IGV) rose nearly 7%, with MSFT stock being a huge IGV component. ETF VanEck Vectors Semiconductor (SMH) jumped 7.6%.

The SPDR S&P Metals & Mining ETF (XME) jumped 9% last week. The Global X US Infrastructure Development ETF (PAVE) gained 4.8%. The US Global Jets ETF (JETS) climbed 5.35%. SPDR S&P Homebuilders ETF (XHB) gained 0.5%. ETF Energy Select SPDR (XLE) jumped 8.3% and ETF Financial Select SPDR (XLF) 3.8%. SPDR healthcare sector fund (XLV) rose 2.1%

Reflecting more speculative stocks, ARK Innovation ETF (ARKK) gained 5.6% last week and ARK Genomics ETF (ARKG) 2%.

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Stocks to Watch

Snowflake went public in September 2020 hitting a high of 429 in December 2020. But the shares fell as low as 110.27 in June 2022. But SNOW stock has now forged a base around its 50 day line with a buy point of 205.76. The shares jumped 16% to 177.10 last week. A move above the 200-day line could offer early entry. But the SNOW stock could have a lot of air resistance.

Snowflake is enjoying strong revenue growth, but is only now poised to become consistently profitable, with significant gains expected in 2023.

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DoubleVerify stock, an April 2021 IPO, has consolidated over the past few weeks, finding support at the 50-day line. DV stock has a buy point of 30.02. Stocks tried to break out on Tuesday and retreated, but still had a strong week. Earnings are strong and revenue growth robust for the digital advertising game.

FOUR stock is working on its own basis, with a buy point of 51.52, according to MarketSmith analysis. Shift4Payments stock could have an early entry above 48.66, which would mean the 50 and 200 day lines clearing. The digital payments processor, an IPO in June 2020, is expanding from restaurants to a wide variety of other areas. Earnings growth is strong and is expected to remain so through 2023.

ALB stock rebounded nearly 14% last week to 270.01, after plunging nearly 13% the previous week, with some analysts betting on lower lithium prices. Prices for the metal used in electric vehicles have reached record highs, with supply expected to exceed demand for years to come. Albemarle, no recent IPO, is reaping the benefits of higher priced contracts while increasing production over time.

ALB stock now has a new base with a buy point of 308.34. A decisive move above the 50-day line could offer early entry.

SWAV stock jumped 9% last week to 276.70. It is still below the 50-day line, which recently acted as resistance. Shockwave stock has a buy point of 315. But a strong move above the 50-day would also break a trendline, offering an early entry. A word of caution: volume has been light for the past few days and weeks.

But Shockwave’s profits are rising amid triple-digit revenue growth.

The relative strength line remains at near all-time highs, despite SWAV stock pulling back from late August highs.

Market rally analysis

The stock market rally continues to be volatile but has shown positive action. Major indexes were higher since Monday’s open and remained comfortably positive throughout the week, even as Treasury yields continued to rise.

Friday’s WSJ report suggests that Fed officials may finally be preparing to downgrade aggressive tightening.

The Dow Jones ended the week comfortably above its 21-day moving average, with the S&P 500, Russell 2000 and even the Nasdaq composite above that short-term level on Friday.

Option expiries helped increase trading volume on the NYSE.

The market rally may have legs, but that doesn’t mean it’s off to the races. This could be another bear market rally. The Dow Jones is just below its 50-day moving average – and above its 10-week line – with the other indices not too far behind. Above the 50-day line looms the 200-day average and mid-August highs.

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Oil stocks are doing well, thanks to a recent upward trend in crude prices and expectations of further gains over the winter. Natural gas producers are struggling as natural gas futures plunge.

Some biotech, drug and health services companies continue to show strength, including Merck, Vertex, Cardinal Health (ACH), humane (HUM) and more.

Few growth stocks have broken out, but many are still building up, such as ALB and Shockwave stocks.

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What to do now

Keeping your emotions in check while remaining flexible is a key part of investing. The market rally is showing some strength, so you can’t stay locked into a bearish mindset. But you don’t want to get too excited and rush out with big bets.

Investors can take small positions in stocks or large-market ETFs. If it works and the market rally continues to gain momentum, you can slowly add to your positions. But if the market drops again, pull back quickly.

So make sure your watchlists are up to date over the weekend. Have a select list of actionable or potentially actionable actions in the next few days. But also keep a broader list of stocks showing relative strength.

Remember that earnings season could disrupt the entire market and sectors, not just individual stocks. Apple’s earnings could rock a wide range of chipmakers and iPhone suppliers. Microsoft, Google, Meta Platforms and Amazon could raise hopes or doubts for cloud computing, IT spending, e-commerce and online advertising.

Microsoft and Google stock report Tuesday evening, with Boeing and Meta expected Wednesday. Merck, Vertex, Amazon and Apple stocks are on Thursday.

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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