The Dow Jones Industrial Average rose 50 points Tuesday, as the stock market rally eyed more record highs ahead of the end of the year. Tesla stock climbed early Tuesday, as it looks to top an early buy point. And Apple stock is approaching new highs. During Monday’s market strength, top growth stocks Applied Materials, ArcBest and Fortinet broke out past new entries.
Among the Dow Jones leaders, Apple (AAPL) lost 0.1% Tuesday, while Microsoft (MSFT) gained 0.2% in today’s stock market. Also on the Dow 30, Home Depot (HD) continues to rebound from support, while Nike (NKE) battled to retake a key level.
Electric-vehicle leader Tesla (TSLA) traded up 1.2% Tuesday. Its rival, Rivian (RIVN), fell almost 3%. Lucid Group (LCID) was down around 2%. And Chinese EV leaders Li Auto (LI) and Xpeng Motors (XPEV) were mixed Tuesday morning ahead of next weekend’s December sales numbers.
Among Tuesday’s top stocks to buy and watch, Applied Materials (AMAT), ArcBest (ARCB), Fortinet (FTNT), Icon (ICLR) and Mosaic (MOS) are in or near new buy zones. Following Thursday’s bullish market signal, investors have the green light to purchase new breakouts.
Chip developer Nvidia (NVDA) jumped toward a fifth straight advance, still in a buy range as it rebounds from technical support.
Icon, Microsoft and Tesla are IBD Leaderboard stocks. Fortinet was featured in this week’s Stocks Near A Buy Zone column. Applied Materials and Mosaic are IBD SwingTrader stocks.
Dow Jones Today: Housing Data
After the stock market open Tuesday, the Dow Jones Industrial Average rose less than 0.1%, while the S&P 500 moved up 0.1%. The tech-heavy Nasdaq composite gained 0.1% in morning trade.
Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.1% Tuesday, while the SPDR S&P 500 ETF (SPY) traded up 0.1%.
Elsewhere, the 10-year Treasury yield traded around 1.49% Tuesday morning, following its close at just above 1.48% Monday.
U.S. markets will operate on a normal schedule this week, ahead of the New Year.
Investors received a fresh round of housing data at 9 a.m. ET when the Case-Shiller Home Price Index was released. The index rose 19.1% in the year that ended in October, down from a 19.7% annual rate the prior month. The index measures average home prices across major metropolitan areas in the U.S.
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Stock Market Rally
The stock market posted more strong gains Monday, as the major stock indexes extended their win streaks to four sessions. The tech-heavy Nasdaq closed at its highest level since Nov. 19. Meanwhile, the S&P 500 set a record high.
Following Thursday’s strength, the market outlook is back in a “confirmed uptrend,” which means investors can buy top-rated growth stocks breaking out past correct buy points.
Monday’s The Big Picture cautioned: “There’s also the risk of the market getting overextended. The S&P 500’s 4.9% rally from Tuesday’s close is the hottest four-day gain since November 2020, according to Dow Jones Market Data. The S&P is also about 3% above its 50-day average, which is getting above its current trend.”
For daily stock market commentary, check out IBD’s The Big Picture.
Stocks On The Move: Coinbase
Cryptocurrency exchange Coinbase (COIN) slid 4% in early trading Tuesday, as the price of Bitcoin dropped 3% over the last 24 hours, according to CoinDesk. The price of Bitcoin traded around $49,200 Tuesday morning.
COIN shares are forming a new base below their 50-day moving average. In early December, the stock gave up the entirety of a big gain past a double bottom’s 280.71 buy point following an Oct. 15 breakout, which triggered the key round-trip sell rule.
Dow Jones Stocks To Watch: Home Depot, Nike
Home Depot stock rallied 1.8% Monday, rising for a fourth straight day, as the home improvement chain continues to rebound from its 50-day support level. Shares are in a buy zone on a rebound from support. Amid the current win streak, Home Depot is the No. 2 Dow Jones performer in 2021, up 52% year to date through Monday’s close. (The top Dow Jones stock is Microsoft with a 53.7% advance.) HD shares moved up 0.2% Tuesday.
Dow Jones retail leader Nike is tracing a new flat base that has a buy point at 179.20, according to IBD MarketSmith chart analysis. Shares are fighting to retake their 50-day line following Monday’s 1.1% gain, but have been finding stout resistance so far. It has a year-to-date gain of 18.3%. Nike shares were up 0.3% Tuesday.
Four Top Growth Stocks To Watch In The Current Stock Market Rally
Stocks To Buy And Watch: Applied Materials, ArcBest, Fortinet
Chip giant Applied Materials broke out past a 159.10 buy point in a flat base during Monday’s 4.65% advance, closing in the 5% buy area that runs up to 167.06. AMAT shares were down 0.4% Tuesday.
Trucker ArcBest surged 9.1% Monday, breaking out past a 116.89 buy point in a shallow consolidation. The buy range ends at 122.73. The stock was up 2% Tuesday.
Cybersecurity leader Fortinet topped a 355.45 buy point in a consolidation Monday, rallying more than 5%. The buy area tops out at 373.22. Bullishly, the stock’s relative strength line hit a new high Monday on the breakout, confirming the stock as a market leader. The RS line measures a stock’s price performance vs. the S&P 500. Fortinet shares lost 0.1% Tuesday.
IBD Leaderboard stock Icon is in buy range past a 301.82 buy point in a consolidation, according to IBD MarketSmith chart analysis. Shares edged 0.1% lower Monday, closing in the 5% buy area, which runs to 316.91. Per Leaderboard commentary, Icon also cleared resistance around 290, which served as an early entry. The stock was slightly higher Tuesday.
IBD SwingTrader stock Mosaic bullishly reclaimed its 50-day moving average during last week’s strong advance. The stock is forming the right side of a cup base with a 43.34 buy point. Be on the lookout for a handle to offer a more risk-optimal entry. MOS stock shows a strong 98 out of a perfect 99 IBD Composite Rating, according to the IBD Stock Checkup. Mosaic stock was unchanged Tuesday in the wake of Monday’s 2.1% rise.
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EV Stocks: Li Auto, Xpeng, Lucid Motors, Rivian
Li Auto continues to work on the early stages of a new base, after triggering the 7%-8% loss-cutting sell rule below a cup-with-handle base’s 34.93 buy point. Shares are below their 50-day line after finding support around the long-term 200-day moving average. The stock rose 0.8% Tuesday.
Xpeng Motors activated a round-trip sell signal from a 48.08 buy point during early December’s sharp sell-off. XPEV shares continue to rebound from their 200-day line, closing just below the key 50-day moving average, which will be a test of strength. Wait for the stock to form a new base, which would offer a fresh entry. Shares inched higher Tuesday.
Lucid Motors shares dropped 2% Tuesday, threatening to give up a large part of Monday’s 2.7% advance. LCID stock remains extended past a 28.49 buy point in a cup-with-handle base, but huge gains have faded. Shares are trying to find support at their 50-day line, but are having trouble getting back above that level.
Recent initial public offering Rivian fell nearly 3% Tuesday, falling after Monday’s 10.6% surge. RIVN shares closed Monday about 40% off their post-IPO highs. Continue to wait for an IPO base to form before considering a purchase. Recent sharp losses are a significant setback in the stock’s basing process and there is no new buy point in sight.
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Tesla stock rallied 1.2% Tuesday, looking to add to Monday’s 2.5% advance that saw the stock briefly top a downward-sloping trendline buy point around 1,115 before closing beneath it. Getting above Monday’s intraday high could serve as a trigger. Meanwhile, a double bottom with a 1,202.05 buy point continues to take shape.
Shares traded as high as 1,243.49 on Nov. 4, but the stock ended Monday about 12% off its 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple stock made it four straight up days Monday with a 2.3% gain. The stock is about 18% above a 153.27 buy point out of a cup-with-handle base, according to IBD MarketSmith chart analysis. AAPL shares fell 0.1% Tuesday, but are just off new highs.
Software leader Microsoft decisively regained its 50-day line last week, placing the top Dow Jones stock in a new buy area. Meanwhile, MSFT shares are forming a flat base with a 349.77 buy point with an early entry at 343.89. Shares moved up 0.2% Tuesday, on pace to add to Monday’s 2.3% gain.
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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