Dow Jones futures hit session highs before backing off late Tuesday, along with S&P 500 futures and Nasdaq futures, after Tuesday's stock market weakness. Breakout stocks Alibaba, Facebook and Netflix headline these six top stocks in or near buy zones in the coronavirus stock market rally.
XThe coronavirus stock market rally paused Tuesday in the wake of testimony from Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell. Dow Jones leader Intel (INTC) is rapidly approaching a new buy point. Alibaba (BABA) and FANG stock leaders Facebook (FB) and Netflix (NFLX) are in new buy areas. Meanwhile, top growth stocks Advanced Micro Devices (AMD) and Tesla (TSLA) are approaching new buy points.
Dow Jones Futures Today
Late Tuesday — at around 11:30 p.m. ET — Dow Jones futures were up 0.70% vs. fair value, while S&P 500 futures moved up 0.6%. Nasdaq 100 futures gained 0.55% vs. fair value after the stock market close. Remember that overnight action in Dow Jones futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Among exchange traded funds, Innovator IBD 50 (FFTY) lost 0.4% Tuesday, snapping a two-day win streak. The ETF of top growth stocks remains about 15% off its 52-week high.
The Nasdaq 100-linked Invesco QQQ Trust (QQQ) ETF moved down 0.25% to close at 226.86. Meanwhile, the SPDR S&P 500 ETF (SPY) fell 1% to 291.97.
On Tuesday, the Dow Jones Industrial Average dived almost 400 points, or 1.6%, to close at session lows. The S&P 500 stumbled 1.05%, while the Nasdaq outperformed with a 0.5% decline.
Within the coronavirus stock market rally, the tech-heavy Nasdaq is once again positive for 2020, up 2.4% through Tuesday's close. Meanwhile, the S&P 500 and Dow Jones Industrial Average are down 9.5% and 15.2%, respectively, through May 19.
Coronavirus Updates
The coronavirus outbreak continues to spread across the U.S. According to the Worldometer data tracker, the cumulative number of confirmed U.S. cases topped 1.55 million. Despite the rising total, the daily number of new cases is trending lower amid the sharp increase in testing.
Confirmed Covid-19 cases worldwide climbed above 4.95 million, with about 320,000 virus-related deaths. With the daily number of new cases falling, investors in the U.S. are turning attention to the economic impact of the coronavirus outbreak and how fast the country reopens for business.
On Monday, Texas Gov. Greg Abbott announced Phase 2 of the state's reopening plan, loosening restrictions on restaurants and announcing dates for the reopening of bars, child care centers and other services.
Coronavirus Stock Market Rally
According to IBD's The Big Picture, the stock market continues to strengthen after hitting lows nearly two months ago on March 23. The major stock indexes confirmed a new uptrend on April 2.
According to Monday's Big Picture, "Monday's bubbly performance showed the stock market does not want to quit, despite huge question marks on the economy, profits and the labor market."
Stocks to watch include the top stocks on IBD Long-Term Leaders. The IBD Long-Term Leaders list focuses on companies with stable earnings growth and price performance.
Coronavirus Stock Market ETF Strategy And How To Invest In The New Uptrend
Stocks Near Buy Zones: Alibaba, AMD, Facebook, Intel, Netflix, Tesla
In the coronavirus stock market rally, six leading stocks in or near buy zones include Advanced Micro Devices, Facebook, Dow Jones leader Intel, Netflix and Tesla.
Alibaba Stock
Alibaba, the Chinese e-commerce giant, is in buy range after Tuesday's breakout above a 216.20 buy point in a cup with handle. The 5% buy zone tops out at 227.15. Alibaba stock rallied 0.9% Tuesday to close at 217.20.
Quarterly earnings are due out Friday ahead of the stock market open. Analysts expect the company's EPS to fall 34% to 85 cents on sales of $15.15 billion, according to IBD data.
AMD Stock
Chip stocks continue to lead the current stock market rally. Graphics-chip maker Nvidia (NVDA) broke out on April 14 and is more than 30% above the 275.50 buy point in a cup with handle. Nvidia rallied 0.6% to all-time highs Tuesday after Susquehanna raised its price target to 410 from 355 ahead of Thursday's earnings report.
Now, chip giant Advanced Micro Devices is rapidly approaching a 58.73 buy point in a cup with handle, according to MarketSmith chart analysis, amid Tuesday's 1.6% gain. Shares are about 5% away from the entry. The stock found support near its 50-day line in early May.
AMD is an IBD Leaderboard stock idea. According to Leaderboard commentary, "Advanced Micro Devices is forming a cup with handle. It was raised to a half position from quarter on Leaderboard May 19."
The stock's relative strength line continues to approach new highs, a bullish indicator.
Facebook Stock
Facebook stock broke out above a 215.38 buy point in a cup with handle on Tuesday with a 1.7% advance. The company announced the launch of e-commerce product Shops, a way for businesses to set up digital storefronts on Facebook and Instagram. The product seeks to help small businesses in the wake of the coronavirus outbreak, which forced the closure of many physical storefronts.
Bullishly, the stock's RS line made a new high, confirming the stock's leadership potential.
Intel Stock
Among the Dow Jones stocks, chip giant Intel is within striking distance of a new buy point at 62.23 in a cup with handle, according to MarketSmith chart analysis. Intel is one of the top Dow Jones stocks to watch in May. Shares gained 0.6% Tuesday.
According to the IBD Stock Checkup, Intel stock boasts a highest-possible 99 IBD Composite Rating, placing it in the top echelon of growth stocks. The Composite Rating is a blend of key fundamental and technical metrics to help investors easily gauge a stock's strengths.
Top Growth Stocks To Buy And Watch
Netflix Stock
FANG stock leader Netflix is in buy range above a 449.62 buy point amid Tuesday's 0.3% fall. The new buy point is the result of a short consolidation above its prior base. The entry is considered an add-on point, a chance to add shares to an existing position.
The IBD Stock Checkup says that Netflix stock boasts a highest-possible 99 IBD Composite Rating.
Tesla Stock
Tesla is adding a new handle to a deep cup base, offering a new buy point at 869.92. Shares are about 6% away from the potential entry.
A previous breakout above a cup with handle and its 775.05 buy point failed on May 1 when CEO Elon Musk tweeted the stock price was "too high." But the stock has recovered in recent weeks.
Dow Jones Leaders: Apple, Microsoft
Dow Jones leader Apple stock reversed from solid gains to fall 0.6 Tuesday, losing a portion of Monday's 2.4% gain.
Shares are out of the 5% buy zone of a cup-with-handle's 288.35 buy point, according to MarketSmith chart analysis. The 5% buy range goes up to 302.77. Shares are just 5% off their all-time highs, nearly completing a remarkable recovery from the coronavirus stock market crash.
Meanwhile, tech giant Microsoft moved down 0.7% Tuesday and is still in the 5% buy zone above a recent cup-with-handle's 180.10 buy point. The buy zone runs up to 189.11. Microsoft is also an IBD Leaderboard stock idea and an IBD Long-Term Leader.
Shares also broke out on April 16 above a 175.10 correct buy point in a double bottom, according to MarketSmith chart analysis.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones futures.
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