Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. The stock market rally had another strong week, with the Dow Jones, S&P 500 index and Nasdaq 100 all hitting record highs.
The stock market rally is now in what IBD’s Market School deems a Power Trend, meeting all the criteria. The Nasdaq composite is above the 50-day moving average and has held above the 21-day exponential moving average for 10 straight days. The 50-day line is in an uptrend and the 21-day line has now been above the 50-day for five straight days. A Power Trend is another signal that the current stock market rally, is in a strong uptrend.
But there are some signs that the market rally is getting too extended, with investors getting too bullish.
Sea Limited (SE), Square (SQ), Snap (SNAP), 10X Genomics (TXG) and Netflix (NFLX) have newly formed handles with buy points. Apple (AAPL), Amazon.com (AMZN) and Tesla (TSLA) are working on possible handles.
Keep in mind that Snap and Netflix earnings are on tap this coming week, while Apple stock, Amazon and Tesla are due the following week.
Investors shouldn’t take these stocks and build a portfolio out of them, even if they all break out. Highly valued growth stocks have been laggards in the current market rally. Concentrating in any one sector or investing theme could leave investors exposed to a sell-off. A good example was Wednesday’s reversal in many story stocks, including Square, Snap, TXG and Tesla stock.
Focusing on one area could mean missing out on gains in other sectors, such as steel, housing retailers and financials, amid an ever-rotating stock market rally. Still, having a couple of these names — if they break out — is worth considering.
Meanwhile, Coinbase (COIN) is now a publicly traded company. The cryptocurrency exchange is highly profitable with booming growth. But investors shouldn’t jump into this new IPO right away.
Dow Jones Futures
Dow Jones futures will reopen at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Coronavirus cases worldwide reached 141 million. Covid-19 deaths topped 3.01 million.
Coronavirus cases in the U.S. have hit 32.31 million, with deaths above 580,000.
Stock Market Rally
The stock market rally turned in solid weekly gains once again, with the Dow Jones and S&P 500 hitting fresh highs.
The Dow Jones Industrial Average rose 1.2% in last week’s stock market trading. The S&P 500 index climbed 1.4%. The Nasdaq composite advanced 1.1%, while the big-cap Nasdaq 100 rallied 1.45%. The small-cap Russell 2000 gained 1%.
The 10-year Treasury yield fell 9 basis points to 1.57%. The big decline came despite strong growth and inflation data. Bond traders apparently are not as worried about accelerating inflation. Booming economic growth and low interest rates is a recipe for broad-based market gains.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) climbed 0.9% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 1.1%. The iShares Expanded Tech-Software Sector ETF (IGV) popped 2.9%. The VanEck Vectors Semiconductor ETF (SMH) declined 1.4%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) edged up 0.9% but pulled back from a 10-week line test on Wednesday. ARK Genomics ETF (ARKG) climbed 1.1%. Tesla is no. 1 holding for ARK Investments across its ETFs. Square stock also…