Dow Jones futures were little changed early Wednesday, along with S&P 500 futures and Nasdaq futures. The stock market rally picked up again on Tuesday, with the S&P 500 regaining the 4,000 level. A giant Apple iPhone factory in China faced unrest overnight amid Covid restrictions.
Deere (DE) reported earnings on Wednesday with DE shares in a buy zone. Deere earnings and instructions can be important for various agricultural stocks, including CF Industries (CF) and Archer-Daniels-Midland (ADM) as well as machine manufacturers Caterpillar (CAT).
Energy stocks continue to perform well. Solar leader Enphase energy (ENPH), a coal producer Peabody Energy (BTU), purifier CVR Energy (CVI), a natural gas producer EQT Corp. (EQT) and LNG stock Perfect the energy (EE) are all close to purchase points.
EE shares rebounded on Wednesday as Enphase moved back into buy territory. BTU shares, CVR Energy, and EQT may act.
ENPH stock is on the IBD Leaderboard. EQT shares are on SwingTrader. Deere shares are in the IBD 50. Peabody Energy is Tuesday’s IBD Stock of the Day.
Riots at the Apple iPhone factory
Riots broke out at Apple’s biggest iPhone factory in China at night when hundreds of workers clashed with security guards. More than 100,000 workers have been forced to live in a Foxconn campus in Zhengzhou for weeks due to Covid concerns, with many reportedly not being paid during that time.
It comes amid renewed lockdowns and strict restrictions across much of China as Covid cases rise.
Apple recently warned that Apple iPhone 14 Pro models will be in short supply due to the Foxconn factory in Zhengzhou.
Apple shares rose 1.5% to 150.18 on Tuesday, finding support near its 50-day line but still below its 200-day moving average.
Dow Jones Futures today
Dow Jones futures were little changed relative to fair value. S&P 500 futures are down. Nasdaq 100 futures fell 0.2%.
New Zealand’s central bank raised interest rates by a record 75 basis points, as expected.
The minutes of the Fed’s November meeting will be released on Wednesday.
Remember that an overnight move in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular trading session.
Join IBD’s experts as they analyze the stocks that made the most of the stock rally on IBD Live
Stock market rally
Tuesday’s stock rally opened mixed, but closed near session highs with broad-based gains.
The Dow Jones Industrial Average rose 1.2% in Tuesday’s trading. The S&P 500 and Nasdaq composite both rose about 1.4%. The small-cap Russell 2000 gained 1.1%.
The 10-year Treasury yield fell 7 basis points to 3.76%. But the two-year Treasury yield, which is more closely tied to Fed policy, was flat at about 4.53%.
The dollar fell back on Wednesday after rising in the previous three sessions. The dollar has fallen significantly since the end of September, especially since the beginning of November.
U.S. crude oil prices rose 1.1% to $80.95 a barrel and continued to climb after a brief dip on Monday. Gasoline futures rose 4.3%, good news for refiners. Natural gas futures rose after falling more than 2% on the day.
Among the top ETFs, the Innovator IBD 50 ETF ( FFTY ) rose 3.4%, helped by a number of energy and metals stocks. The iShares Expanded Tech-Software Sector ETF ( IGV ) rose 1.8%. VanEck Vectors Semiconductor ETF (SMH) rose 2.9%.
The SPDR S&P Metals & Mining ETF (XME) gained 3.2%, while the Global X US Infrastructure Development ETF (PAVE) gained 1.3%. The SPDR S&P Homebuilders ETF ( XHB ) rose 1.9%. The Energy Select SPDR ETF ( XLE ) rose 3.1%. The Healthcare Select Sector SPDR Fund ( XLV ) rose 0.9% to a seven-month high.
Backing stocks with more speculative stories, ARK Innovation ( ARKK ) gained 0.3% and ARK Genomics ( ARKG ) declined 0.4%.
Five Best China Stocks to Watch Now
Energy Stocks Close to Buy Points
Enphase shares rose 4% to 320.44, closing above the 316.97 cup handle buy point for the first time. However, the last three times the ENPH fund rose in these areas, instead of falling. Enphase shares have large daily swings. Hence, investors can find out if ENPH stock has retraced to its rapidly rising 21-day moving average.
It is showing strength with some other LNG stocks Flex LNG (FLNG) came out and Cheniere Energy (LNG) retraces its 50-day line.
BTU shares rose 6.7% to 29.62, just below a seven-month consolidation buy point of 30.15. Tuesday’s move broke the trendline of the stock, suggesting an early entry. However, BTU stock is 9.3% above its 21-day line and 17% above its 50-day line. The holding came after strong Peabody Energy earnings.
Shares of CVR Energy rose 4.85% to 40.85, still above the old buy point of 39.81, which could be considered safe. Also, CVI shares have a tight three-week pattern with a 42.31 entry. A break above 41.31 could offer an early entry into this tight pattern.
Shares of EQT rose nearly 6% to 43.79 on Monday, rising above the 50-day line after rising above the 200-day. Stocks are breaking a downtrend line. The official buy point is 52.07.
EE shares rose 9.6% to 30, clearing a 28.49 cup-handle buy point on above-average volume, according to MarketSmith analysis. The move, a record close, cleared much of the trade going back to Excelerate Energy’s April IPO. EE shares hit early entries on Friday and Monday, although trading was lower than normal on those days. Excelerate is now slightly extended above the buy zone and well above the 21-day line.
Market rally analysis
The stock rally continues to perform constructively, trading in a narrow range after a modest pullback and support last week. On Tuesday, major indexes bounced back from Monday’s losses.
The S&P 500 bounced back from its 10-day line above the 4,000 level as it moved toward its 200-day line. While not above the November 15 intraday high, it was the index’s best close in more than two months.
It is a 50-day line simply The S&P 500 is starting to rise.
The Russell 2000 is getting very close to 200 days. The S&P MidCap 400 posted more gains last week, holding its 200-day line.
The leading Dow Jones surpassed the 34,000 level for the first time in three months, just below the peak on August 16. The trailing Nasdaq found support at its 21-day line, just above its 50-day, but did not recoup all of Monday’s losses.
All these indices work above the Dow implicitly handles. Most stocks track the movement of the major indexes, so many holds are formed in stocks near buy points. A slightly longer break, perhaps until the key economic reports later next week, will allow the moving averages to begin to catch up.
Market Timing with IBD’s ETF Market Strategy
What to do now
Until the S&P 500 moves decisively above its 200-day line, investors may not want to add much exposure right now. With the Thanksgiving holiday trade halt next week and critical economic data from the Fed, the market rally could be extended in the short term.
This can help establish holdings on stocks from different sectors and allow moving averages to gain ground. Investors should create their own watchlists. It’s certainly time to move beyond traditional tech growth stocks, which are largely lagging right now.
Given that many leaders are extended from moving averages like Excelerate Energy or BTU stock, it’s even more important to look for early entries and move quickly.
Read The Big Picture daily to stay in sync with market direction and leading stocks and sectors.
Follow Ed Carson on Twitter @IBD_ECarson for stock updates and more.
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