Dow Jones Futures: Stock Market Rebound Maintains Gains as Quick Buy Signals from Square, Sea and Chipotle; Tesla Faces Key Test

Dow Jones futures rose Tuesday night, along with S&P 500 futures and Nasdaq futures. The stock market rally took a breather on Tuesday, falling to the downside after strong gains during recent sessions.


Royal Caribbean (RCL), Carnival (CCL) and Norwegian Cruise Line (NCLH) recovered late in a Bloomberg report that the Centers for Disease Control and Prevention recommended that cruises could resume this summer with certain restrictions. That followed reports that cruise line operators would not have to require vaccinations from travelers.

Shares of Carnival, NCLH and RCL were up 2% overnight, adding to gains on Tuesday and during the last few sessions. All three actions are close to possible purchase points.

Holding Breakouts, New Buy Signals

Microsoft (MSFT), Facebook (FB) and father of Google Alphabet (GOOGL) continued to stay in the buying range on Tuesday after Monday’s breakouts.

Micron technology (MU), Square (SQ), Sea Limited (I KNOW), Chipotle Mexican Grill (CMG) and Yeti Holdings (YETI) all flashed buy signals, at least intraday.

Tesla (TSLA) is meeting resistance after a recent race. But Tesla stocks and other highly valued growth names are showing signs of life.

Microsoft and Google shares are on the IBD leaderboard. GOOGL shares are on SwingTrader. Microsoft shares are in IBD Long-Term Leaders. Yeti’s shares are on the IBD 50 list. Google and Micron’s shares are at Big Cap 20.

Dow Jones Futures Today

Dow Jones futures rose a fraction against fair value. S&P 500 futures rose. Nasdaq 100 futures were up 0.1%.

Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular session of the stock market.

Join IBD experts as they discuss actionable stocks in the stock market rally on IBD Live.

Coronavirus news

Coronavirus cases worldwide reached 132.95 million. Deaths from Covid-19 exceeded 2.88 million.

Coronavirus cases in the US have reached 31.55 million, with deaths above 570,000.

California plans to lift most coronavirus restrictions by June 15, but is maintaining its mask mandate.

Stock market rally

The stock rally had a slightly lower session that did not alter the uptrend.

The Dow Jones Industrial Average fell 0.3% in trading Tuesday. The S&P 500 Index lost 0.1%. The Nasdaq compound was down less than 0.1%.

The 10-year Treasury yield fell 6 basis points to 1.66%.

Read The Big Picture every day to stay in sync with the direction of the market and top stocks and sectors.

The tech titans hold on

Microsoft shares fell 0.5% to 247.86. On Monday, MSFT shares rose 2.8% to 249.07, outperforming a flat-based buy point of 246.23, according to MarketSmith analysis.

Shares of Google fell 0.4% to 2,209.26. GOOGL shares on Monday rose 4.2% to 2218.96, also clearing a flat base, with an entry of 2145.24. Both Microsoft and Google shares showed their first entries last week.

Shares of Facebook fell 0.9% to 306.26. FB shares rose 3.4% to 308.91 on Monday, above the 299.81 buy point of a six-month consolidation.

Tesla Stock

Shares of Tesla rose 0.1% to 691.92. On Monday, TSLA shares rose 4.4% to 691.05 after record delivery figures. But that was close to session lows after hitting 708.16 intraday, hitting resistance at its 10-week moving average. Tesla shares must also break through their March short-term highs and 50-day line before investors pay close attention to the 2020 big winner.

Major ETFs

Among the best ETFs, the Innovator IBD 50 (FFTY) ETF was up 0.2%, while the Innovator IBD Breakout Opportunities (BOUT) ETF was down 0.5%. The iShares Expanded Tech-Software Sector ETF (IGV) advanced 0.6%, with MSFT shares the leading position. The VanEck vectors Semiconductor (SMH) ETF sank 1.4% after several strong gains.

SPDR S&P Metals & Mining ETF (XME) fell 1% and Global X US Infrastructure Development ETF (PAVE) lost 0.8%. The US Global Jets ETF (JETS) was up 0.8%.

Reflecting more speculative story stocks, ARK Innovation ETF (ARKK) was up 1.8% and ARK Genomics ETF (ARKG) was flat. Tesla shares are the largest holding in ARK Investments ETFs. While TSLA stocks were quiet Tuesday, they have rallied in recent days, while many other ARK stocks are also picking up, including Roku (ROKU), Baidu (BIDU) and square shares.

Some of Tuesday’s gains in ARK-type stocks could reflect falling Treasury yields. The rising yield on 10-year Treasuries has weighed on highly valued growth stocks in recent months.

Shares in buy range

Yeti shares rose 3% to 75.06, hitting 78.40 intraday. That briefly cleared a buy point of 76.87 points. YETI closed right on a downtrend line, offering a more aggressive entry. The maker of premium coolers, cups and now luggage got its 50-day line back last week. Yeti’s shares were Tuesday’s IBD stock of the day.

Square stocks rose 2.85% to 236.50, recovering their 50-day line and breaking a downtrend. That could offer early entry for SQ shares. The official purchase point is 283.29.

Micron shares fell 0.3% to 93.49 after touching 96.10 intraday, briefly clearing the 95.85 entry from a short consolidation. MU shares have been actionable from the 10-week line following the gains and guidance from the memory chip giant last week. Micron’s stock is just 4.7% above its 10-week line.

Shares of SE rose 5.2% to 247.03, returning to their 50-day line. Depending on where you draw it, Sea Ltd. shares also cleared a downtrend line. This may be an early entry into SE shares, which have an official buy point of 285.10.

Chipotle shares rose 2.4% to 1,487.48, rebounding from its 50-day line and breaking a downtrend. That offers an early entry, with the official purchase point at 1,565.01. CMG shares had their best close since February 12, but they need to move a little further to overcome their March peaks. Investors should note that Chipotle’s earnings are in two weeks.

Market rally analysis

The stock market rally closed little changed on Tuesday after trading in a tight range. After consecutive S&P 500 gains of more than 1% to all-time highs and the Nasdaq jumping more than 1.5% for three sessions in a row to clear key levels, with a series of strong breakouts, a quiet session is fine.

A pause in the stock market rally for a few days would allow more controls to form on the bases, while recent breakouts could consolidate gains. As long as the Nasdaq remains above the recent highs and especially the 50-day line, the uptrend will remain intact.

The leadership of the stock market recovery remains fairly broad, with some tech titans, chips, commodities, industrial travel, and a few retail names doing well.

Some highly valued growth names like 10X Genomics (TXG), Sea Ltd. or Square shares are taking shape. More are like Tesla stocks, still below the 50-day lines, but at least early repairs are being made. Of course, just as some home improvement projects go unfinished, there is no guarantee that the next chapter of the stories will be a happy one.

Investors should participate in this market rally. Don’t expect a replay of the race from April to September, but there are reasons to be confident now. As you expand your holdings and review your watchlists, try to have diversity within your leading actions. That will help you avoid large portfolio movements due to group liquidations, while keeping you in tune with the market and leading stocks.

Follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.


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