Dow Jones futures fell slightly Wednesday night, along with S&P 500 futures and Nasdaq futures, while Bitcoin continued to slide. Chipotle Mexican Grill (CMG) and Lam Research (LRCX) headlined key earnings reports after the close.
XThe stock market rally had a positive session Wednesday, with leading stocks rebounding amid solid earnings reports after a couple of rough days. Meanwhile, Bitcoin-related plays such as Coinbase (COIN) and Tesla stock tested key support. Apple (AAPL) and Google parent Alphabet (GOOGL) faced scrutiny for their app store fees and rules.
Key Earnings
Chipotle earnings easily beat views on skyrocketing digital sales, with the fast-casual chain predicting faster same-store sales growth in Q2. CMG stock rose a fraction in extended trade. Shares fell 1.6% to 1,507.62 on Wednesday, trading relatively tightly heading into results. Chipotle stock has a 1,565.01 buy point.
Lam Research earnings topped Q3 views while the chip-gear maker also guided up for the current Q4. LRCX stock dipped 1% overnight. Shares rose 4.6% to 641.25 on Wednesday, slightly extended once again after nearly testing its 603.70 buy point on Tuesday. LRCX stock could have an alternate entry if it breaks a downtrend from the past couple of weeks.
Fellow chip-gear giant ASML (ASML) beat views and raised guidance before Wednesday's open. ASML stock jumped 6.25% on Wednesday, also lifting Lam Research and other chip plays.
Early Thursday, HCA Healthcare (HCA) reports, following upbeat earnings from rival hospital operator Tenet Healthcare (THC) as well as several other medical plays. Freeport McMoRan (FCX) and Cleveland-Cliffs (CLF) are also on tap, with Southern Copper (SCCO) and Nucor (NUE) late Thursday providing further insight into the mining and steel sectors.
HCA stock rose 2.4% on Wednesday, back in a buy range. THC stock popped 4.8%, flashing an aggressive entry from its 10-week line.
FCX stock edged up 0.1% Wednesday after finding 50-day line support, but is still below two buy points. Cleveland-Cliffs rose 2.7%, rebounding from its 50-day, but needs to form a new base. Southern Copper stock is basing while Nucor has a four-weeks-tight pattern.
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Bitcoin Price Slides
The Bitcoin price traded below $53,000 Wednesday night, continuing to retreat. Bitcoin hit a record $64,899 on April 14.
Bitcoin Plays Test Support
COIN stock undercut the trade debut's low, hitting 302.10 intraday. Shares of the cryptocurrency exchange rebounded, but still closed down 2.8% to 311.92, their third straight decline. COIN stock opened at 385 on April 14 and rose to 429.54 within minutes, but quickly fell below 350. While Coinbase is profitable with booming growth, investors should wait for an IPO base to form. That could offer a first buy point, with perhaps an area near 350 providing an aggressive entry.
Tesla (TSLA), Square (SQ) and PayPal (PYPL) rebounded from their 50-day lines. Tesla stock popped 3.5%, while Square dipped 0.1% and PayPal edged 0.2% higher. All three stocks now have handles on their consolidations. Those offer lower buy points, with especially aggressive investors eyeing a break of the downtrend in those handles as early entries. However, TSLA stock and Square report earnings next week, with PYPL stock a week later.
With Bitcoin down from Wednesday's stock market close, related plays could come under pressure Thursday.
LRCX stock, PayPal and Square are on IBD Leaderboard. PayPal stock is on IBD Long-Term Leaders. ASML stock is on the Long-Term Leaders watchlist. PayPal, ASML, Southern Copper and SQ stock are all on the IBD 50 list. LRCX, Square, Nucor, SCCO and Google stock are on the Big Cap 20. ASML was Wednesday's IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures dipped 0.1% vs. fair value. S&P 500 futures lost 0.15%. Nasdaq 100 futures fell 0.15%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live.
Coronavirus News
Coronavirus cases worldwide reached 144.43 million. Covid-19 deaths topped 3.07 million.
Coronavirus cases in the U.S. have hit 32.60 million, with deaths above 583,000.
U.S. vaccinations appear to be preventing a new Covid case wave while deaths fall sharply. But global coronavirus cases have skyrocketed to record levels, with India infections erupting with several other countries reporting heavy new cases. That could put a damper on global growth and travel.
Stock Market Rally Wednesday
The stock market rally had a solid, broad-based advance, closing near session highs after two days of selling. The Dow Jones Industrial Average rose 0.9% in Wednesday's stock market trading. The S&P 500 index climbed 0.9% as well. Both are about 5% above their 50-day lines, leaving them little room before they start to look extended.
The Nasdaq composite advanced 1.2%, with the big-cap Nasdaq 100 up 0.9%. The small-cap Russell 2000 popped 2.4% to just below the 50-day line.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) bounced 3.3%, while the Innovator IBD Breakout Opportunities ETF (BOUT) gained 1.7%, following big losses for both Tuesday. The iShares Expanded Tech-Software Sector ETF (IGV) edged up 0.4%. The VanEck Vectors Semiconductor ETF (SMH) gained 2.6%. ASML and LRCX stock are both notable components.
SPDR S&P Metals & Mining ETF (XME) rose 3.2% and Global X U.S. Infrastructure Development ETF (PAVE) climbed 1.7%. U.S. Global Jets ETF (JETS) rebounded 2.4% after tumbling Tuesday.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) rose 2.4% and ARK Genomics ETF (ARKG) 2.6%. Tesla stock is the top holding across ARK Investments' ETFs. SQ stock also is a top-five holding. ARK ETFs have been buying up COIN stock in recent days, while selling shares of Square and Tesla.
Google, Apple App Stores Scrutinized
Apple and Google executives were among those appearing at a congressional hearing on app stores and antitrust concerns. Spotify (SPOT) and Match Group (MTCH) executives also appeared, criticizing the tech giants' "onerous" app store fees and restrictions. Sen. Amy Klobuchar, head of the Senate Judiciary's antitrust subcommittee, said Apple's launch of AirTag tracking devices was "timely," with rival Tile saying the tech titan has an unfair platform advantage.
Tech titans Apple, Google, Facebook (FB) and Amazon.com (AMZN) face potential antitrust action. The Trump administration initiated a number of antitrust investigations, with the government and many states filing suits vs. Google and Facebook late last year. But the Biden administration isn't expected to let up the pressure.
FTC nominee Lina Kahn told the Senate Commerce Committee on Wednesday that regulators need to keep a close watch on tech titans' power over digital markets, specifically citing Apple and Google app store dominance.
Apple stock rose 0.3% to 133.50. Shares could be working on a handle or a three-weeks-tight pattern, or both. The current Apple stock buy point is 145.19 from a cup-without-handle base.
Google stock lost 66 cents to 2,278.35 on Wednesday. It's trading near highs and just above a buy zone. GOOGL stock could be forging a three weeks tight, offering a new entry.
Both Apple and Google stock report next week, along with Facebook and Amazon.
Market Rally Analysis
The stock market rally had a solid day. The Dow Jones and S&P 500 index are near record highs, while the Nasdaq again found support at its 21-day moving average.
In a mirror image of Tuesday's retreat, leading stocks looked better than the major indexes. Tech giants lagged the Nasdaq somewhat, with Netflix falling sharply.
Medical reopening plays did well, including hospital chains stocks of THC and HCA. Intuitive Surgical (ISRG) and Edwards Lifesciences (EW) surged on earnings. Shockwave Medical (SWAV), which didn't report earnings, did reclaim a buy point.
Chip stocks got a much-needed rebound off ASML earnings after falling to or below buy points. Will Lam Research and Intel (INTC) continue the positive action in semiconductors?
But gains were broad-based, with steel stocks, housing-related retailers, banks and more having solid days.
One area that hasn't really come back in the current stock market is highly valued growth companies. While many are still struggling to hit bottom, some are showing positive action such as Tesla stock, Square and 10X Genomics (TXG), yet another ARK holding. But even here, breakouts are still missing.
What To Do Now
It's hard not to get excited when stocks start moving up and despondent when they retreat. But don't let your emotions rule your trading behavior. Plan your trade when the market is closed so you can trade your plan when stocks are moving.
Don't get too exposed. Being too aggressive in the current environment can force you to cut back aggressively when trades go against you. A more modest exposure, with diversified leadership, will be easier to hold when the overall market rally or individual stocks or sectors stumble.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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