Dow Jones futures tilted higher overnight, along with S&P 500 futures and Nasdaq futures after a modestly down session for the stock market rally. Two recent IPOs, Mobileye and Sprinkler, moved on news.
The major indexes retreated Monday, with the Nasdaq and S&P 500 turning negative as AAPL stock reversed slightly lower. But they held onto the bulk of last week’s gains.
Bitcoin plunged as the SEC filed charges vs. Binance, the world’s largest cryptocurrency exchange, and co-founder Changpeng Zhao, for alleged securities violations and operating illegally in the U.S. COIN stock and Bitcoin miners such as Marathon Digital tumbled as well. The SEC has threatened action vs. Coinbase (COIN).
IPOs Moving Late
Late Monday, marketing software maker Sprinkler (CXM) reported a better-than-expected first-quarter profit and revenue gain. CXM stock popped nearly 4% in late trade. Sprinkler stock, a 2021 IPO, had closed just above a short consolidation that could be viewed as a handle to an eight-month consolidation.
Meanwhile, Mobileye (MBLY) fell 3% in late trade, signaling a move back below the 50-day. The self-driving systems firm said it will sell 35 million shares on behalf of Intel (INTC), which spun off Mobileye in an IPO last year. MBLY stock fell 2.7% to 42.37 on Monday. Shares are set to fall below their 50-day line.
Tesla stock is on IBD Leaderboard, with Wingstop on the Leaderboard watchlist. FTNT stock was added to SwingTrader on Monday and is on IBD Long-Term Leaders. WING stock and Fortinet are on the IBD 50. Fortinet was Monday’s IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures edged up vs. fair value. S&P 500 futures climbed 0.1% and Nasdaq 100 futures rose 0.1%.
Crude oil futures fell 0.6%.
Apple Vision Pro
Apple unveiled the long-awaited mixed-reality headset, the Vision Pro, at its annual Worldwide Developers Conference. Targeting gaming, communications and productivity uses, the goggles combine virtual and augmented reality. The $3,499 price tag, higher than speculation for about $3,000, could deter potential buyers.
Earlier, Apple unveiled some new Mac computers and provided updates on the latest operating systems for the iPhone, iPad, Mac, Apple TV and Apple Watch.
Apple stock closed down 0.8% at 179.58 after hitting a record 184.95 intraday before the Vision Pro unveiling.
Stock Market Rally
The stock market rally showed generally modest declines Monday, after the Nasdaq pulled back from solid morning gains.
The Dow Jones Industrial Average fell 0.6% in Monday’s stock market trading. The S&P 500 index retreated 0.2%. The Nasdaq composite dipped 0.1%. The small-cap Russell 2000 sank 1.3%.
U.S. crude oil prices rose 0.6% to $72.15 a barrel, well off intraday highs. Saudi Arabia said it would cut production by 1 million barrels per day in July.
The 10-year Treasury yield was unchanged at 3.69%.
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.85%. The iShares Expanded Tech-Software Sector ETF (IGV) climbed 0.7%, with FTNT stock an IGV holding. The VanEck Vectors Semiconductor ETF (SMH) fell 1.25%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) advanced 1.1% and ARK Genomics ETF (ARKG) gained 0.75%. Tesla stock is the No. 1 holding across Ark Invest’s ETFs. COIN stock and Shopify also are top 10 holdings for Cathie Wood’s Ark ETFs.
SPDR S&P Metals & Mining ETF (XME) declined 0.8%. U.S. Global Jets ETF (JETS) dipped 0.2%. SPDR S&P Homebuilders ETF (XHB) stepped down nearly 1%. The Energy Select SPDR ETF (XLE) slipped 0.7% and the Health Care Select Sector SPDR Fund (XLV) rose 0.4%.
Stocks In Buy Areas
Tesla stock rose 1.7% to 217.61 on Monday after hitting a 2023 high of 221.29 intraday. Shares are still in range from a 207.79 buy point, but are at the upper end of the 5% chase zone. Tesla stock broke out Friday from what’s either a cup or double-bottom base. The EV giant has advanced on above-average volume for six straight sessions.
FTNT stock jumped 4.6% to 71.27, reclaiming a 69.07 buy point from a V-shape flat base, according to MarketSmith analysis. Volume was heavy. Fortinet originally broke out on May 19, but soon reversed lower to test the 50-day line before recovering.
DXCM stock climbed 1.7% to 124.66 on Monday, also reaching the 126.44 flat-base buy point intraday. Shares reclaimed the 50-day line late last week and broke a short trendline. Dexcom stock topped a short-term high Monday.
SHOP stock gained 2.8% to 59.92, rebounding from its 21-day line. That’s offering an early entry, though Shopify stock has teased aggressive buy points several times in the past few weeks only to quickly fizzle. Shares are working on a possible base following a powerful earnings gap-up in early May.
WING stock popped 3%% to 203.69, rebounding from the 50-day and 10-week lines, just above a prior consolidation. Shares also reclaimed their 21-day line and broke a down-sloping trendline. Volume was light but not terrible. Investors could use Monday’s move as a buy signal. Wingstop stock is on track to have a flat base, part of a base-on-base pattern, by the end of the week.
Market Rally Analysis
The stock market rally saw Monday slide, but seemed normal after last week’s big gains. The Nasdaq initially led, but turned red as Apple stock reversed lower. So did the S&P 500.
The Dow Jones retreated modestly, but is still above its 50-day line.
The Russell 2000 fell solidly, closing just below the 200-day line. That’s a reflection of weak breadth. After winners dominated late last week, losers easily won Monday.
The Nasdaq 100 edged up 0.1%, off session highs. It’s still 9.3% above its 50-day line.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) also rose 0.1%.
The Invesco S&P 500 Equal Weight ETF (RSP) fell 0.3%, but is still above its 50-day line and 200-day. Holding that level and eventually making the trek toward 2023 highs will be important.
The market rally has been led by tech titans and AI stocks, including many chip plays. While some kept rising Monday, the Apple stock reversal and recent pullback in chips isn’t entirely unwelcome.
While market breadth was negative Monday, some sectors showed strength or hinted at it.
That includes cybersecurity, with FTNT stock just one of several top performers. Several restaurant names, including WING stock, are still on the menu. Medical products and systems plays such as DXCM stock are at or near entries. Homebuilders and, to a lesser extent, travel stocks are doing well.
What To Do Now
After last week’s bullish, broad market rally, investors should be looking to add exposure, gradually.
Several stocks did flash buy signals Monday, though it wasn’t a flood given Monday’s mildly lower action.
Don’t force your way into heavy exposure. Let the market rally draw you in. If the market steadily improves and top stocks flash buy signals, you can add to your portfolio over time. If the market begins to falter, you’ll want to keep an eye on the exit.
Have your watchlists ready. Finding emerging leaders and spotting early entries is key.
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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