An attempt to rally the stock market saw slight losses on Tuesday, but the main indices held key levels. Megacaps like apple (AAPL), Meta platforms (meta), Microsoft (MSFT), Tesla (TSLA) and Google parent the alphabet (Google) fell back on Tuesday but looks generally healthy. Chip stocks fell but came off their lows.
MU stock rose 3% in pre-market trade. The memory chip giant reported a bigger-than-expected loss and a 53% revenue decline that also missed the views. Micron cut inventory by more than $1.4 billion and provided weak guidance for the third quarter. But CEO Sanjay Mehrotra said in the earnings release that “customer inventories have declined in several end markets, and we see a gradual improvement in the supply-demand balance in the coming months.” He added that the chipmaker is “close to transitioning to sequential revenue growth.”
Chip investors are betting on a recovery when that is not yet clearly on the horizon. Micron tends to see the industry cycle turn early.
Micron stock closed down 0.85%, at 59.28, but rebounded to hold the 50-day line. MU stock has 64.44 buy points from a bottom base. But investors can use 61.88 as an early entry from a potential handle.
Lululemon’s profit jumped about 31%, while revenue rose 30% to $2.8 billion. Both accelerated a little bit from Q3.
LULU stock rose 14% early Wednesday. Shares rose 1% to 320.32 on Tuesday. Lululemon stock recently regained its 50-day and 200-day streaks. LULU has been consolidating back to early December with a buy point of 386.80.
Cal-Maine rose 2.5% on a 717% gain. PRGS stock fell about 5% amid poor guidance.
META stock is running IBD Leaderboard and SwingTrader. Microsoft and Google stocks are the long-term leaders of IBD.
Dow jones futures today
Dow futures rose 0.7% against fair value. S&P 500 futures rose 0.9%. Futures for the Nasdaq 100 rose 1%.
Crude oil rose slightly.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Trying to climb the stock market
An attempted rally in the stock market eased slightly on Tuesday, with major indexes scraping losses mid-afternoon.
The Dow Jones Industrial Average closed down 0.1% in stock market trading Tuesday. The S&P 500 fell 0.2%. The Nasdaq Composite fell 0.45%. Small cap Russell 2000 fell less than 0.1%.
Financial regulators testified Tuesday about the failure of Silicon Valley Bank and Signature Bank. Lawmakers have criticized banks, regulators and each other, suggesting they will not push new measures to support banks for now, such as deposit insurance more widely.
First Republic Bank (FRC), among the most affected regional banks, by 2.3%. But FRC stock came off its intraday lows near the close. First Republic is no longer for sale, Fox Business Correspondent Charles Gasparino said on Twitter Tuesday afternoon, citing sources. It may be a sign of strength that the First Republic no longer needs rescuing. FRC stock popped nearly 12% on Monday but is down 89% for the month.
US crude oil prices rose 0.5% to $73.20 a barrel.
The 10-year Treasury yield rose 4 basis points, to 3.57%. The two-year Treasury yield jumped 10 basis points, to 4.06%.
Exchange Traded Funds
Among the ETFs, the Innovator IBD 50 ETF (fifty(losing 1.1%, while Innovator IBD Breakout Opportunities ETF)fit) decreased by 0.1%. iShares Expanded Technology and Software ETF (IGV) fell 0.4%, with MSFT stock holding the primary position. VanEck Vectors Semiconductor Corporation (SMH) was down 0.7% but was far from its lowest level on the day. MU stock is a large SMH property.
SPDR S&P Metals & Mining ETF (XME(up 1.1% and US ETF Global X Infrastructure Development Fund)cradle) gain of 0.75%. American global aircraft (Planes) rose 0.9%. SPDR S&P Homebuilders ETF (XHB) increased by 0.6%. Energy Defined Fund SPDR ETF (xle(losing a small portion, the SPDR Health Care Sector Selection Fund)XLV) decreased 0.6%
Top five Chinese stocks to watch now
Apple and Microsoft both fell 0.4%, after Dow tech giants fell more than 1% on Monday. Apple is just above its buy point while MSFT stock is still below its entry point. The decline in both stocks came in light volume.
Google shares fell 1.4 percent to 101.03, after falling 2.8 percent on Monday. Stocks have pulled back from the 200-day line. However, GOOGL stock now has a proper handle. The purchase point of a mug with a handle is 106.69.
META stock is down 1.1% at 200.68 but is still holding above the flat-bottomed 197.26 buy point, according to MarketSmith analysis.
Tesla shares fell 1.4% to 189.19%, after cutting Monday’s gains to 0.7%. Stocks hold 50 days but below the 21 day and 10 week lines. TSLA is close to forming a bottom base with a potential buy point at 217.75.
Market rally analysis
The attempt to rally the stock market has lost steam, but the overall picture hasn’t changed much. The NASDAQ is holding above its 21-day and 50-day moving averages.
The S&P 500 is still between 50 days and 200 days. The Dow Jones again reached the 21-day resistance level but held the 200-day line. It was also an indoor day after a relatively quiet Monday.
Megacap stocks such as Apple and Google are in decline this week after supporting major corporate indices for most of March.
Chip stocks were significantly losers. nvidia (NVDA), which was significantly extended, only had a slight decline, but many semiconductor trades around longs lost 2%-4%.
So was the breadth of the market. Winners topped losers on the NYSE while lagging behind the Nasdaq. Combined, the winners only outperformed the losers.
The attempt to rally the market is still not seen Follow-up day to confirm the uptrend.
Home builders are looking strong, along with some building materials and housing-related retailers. Some software names work well, including MSFT stocks but also many cybersecurity games, among others. But market leadership is narrow.
It’s time to market with IBD’s ETF Market Strategy
What are you doing now
The attempt to rally the market is still going on but it hasn’t made much progress. The stock market has been showing volatile movement for several weeks. Certain regions did well, but their breadth was weak.
If you are getting into the right stocks, there are chances of gains. But many buying opportunities fizzled out. Some stocks make strong moves and then pull back. So being smart is key, exploiting early entries and taking profits quickly.
But the overall exposure should be light. There is nothing wrong with being mostly or entirely on the sidelines. Cash can be king, especially if it’s paying 4%.
Build your watchlists. Look for stocks near buy points but also names that show relative strength.
Read the big picture every day to stay in sync with market trend, leading stocks and sectors.
Please follow Ed Carson on Twitter at @employee For stock market updates and more.
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