assembly is still fighting; 5 strong growth stocks

Dow futures will open Monday night, along with S&P 500 futures and Nasdaq futures, after the long Christmas weekend. The stock market rally had another tough week, but rebounded from its lows on Thursday morning.




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The major indices were mixed during the week, but many of the blue-chips came under more pressure. The market rally looks shaky but it’s not over yet.

It’s not the time to buy stocks, especially growth names. But investors should always look out for potential growth leaders for the next sustainable rally in the market. Shift4Payments (four) , Celsius (CELH), demon (PI), Enphase energy (ENPH) f can (BOX) is holding up relatively well in the current weak market. FOUR and Box are consolidating near recent highs, while Impinj, Celsius and ENPH stocks are trading around the 50-day or 10-week lines. No action can be taken at the moment, and everyone could crash if the market continues to weaken. But watch them.

ENPH stock is on IBD Leaderboard, with PI stock is on Leaderboard Watch. Enphase, Shift4Payments, Box, and CELH stocks are in IBD 50. ENPH stocks are in IBD Big Cap 20. Shift4Payments was Friday’s IBD stock.

But the huge growth has had a rough outing, in particular an Apple (AAPL), nvidia (NVDA) and Tesla (TSLA).

New Day 2022

Finally, Tesla’s competitor China New (NIO) Nio Day 2022 will take place on December 24, EV’s Christmas. Nio will unveil the revamped ES8 SUV, built on the NT 2.0 platform, as well as an all-new EV, most likely the EC7 coupe SUV.

Nio production is ramping up with strong demand for the latest ET5 sedan and ES7 crossover SUV. But relaxing Covid rules could lead to a massive wave of infections, and Nio and other electric car makers in China could run into production or supply chain problems again. Giant EV BYD (BYDDF) said this week that Covid cases among workers cut production by 2,000 to 3,000 cars per day.

Nio stock fell 5.4% last week, returning below the 50-day line. The stock is well below the 200 day line.

Dow jones futures today

With Christmas falling on Sunday, the US stock and bond markets will be closed on Monday, along with many exchanges around the world.

Dow Jones futures open at 6 p.m. ET on Monday, along with futures for the S&P 500 and Nasdaq 100.

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


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Stock market rise

The stock market rally fell sharply for the week, but ended the week at its worst.

The Dow Jones Industrial Average rose 0.9% in last week’s trading on the stock market. The S&P 500 fell 0.2%. The Nasdaq Composite sank 1.9%. The small Russell 2000 finished just over break-even.

Apple shares fell 2% to 131.86 last week. It is testing the June bear market low of 129.04, dropping to 129.64 on Friday morning.

Nvidia stock fell 8.2% to 152.06, after a bad reversal below the 200-day line in the previous week, amid a broad chip sell-off. NVDA found support at the 50-day line on Friday.

Tesla stock fell 18% to 123.15 after dropping 16.1% in the previous week, its worst weekly loss since the Covid crash in March 2020. TSLA stock fell to a 25-month low, down 70% from its November 2021 peak.

The 10-year Treasury yield jumped 27 basis points, to 3.75%. The inverse relationship between Treasury yields and stock prices has faded in the past several weeks.

US crude oil futures jumped 6.9% to $79.56 a barrel during the week, surpassing $80 briefly on Friday.


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Exchange Traded Funds

Among the top ETFs, the Innovator IBD 50 ETF (FFTY) was down 0.3% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) was up 0.7%. The iShares Expanded Tech-Software ETF (IGV) fell 1.8%. The VanEck Vectors Semiconductor ETF (SMH) was down 4.7%, with NVDA stock holding major SMH.

The SPDR S&P Metals & Mining ETF (XME) rose 1.6% last week. The ETF Global X American Infrastructure Development Index (PAVE) rose 0.75%. The US Global Jets Index (JETS) fell 1.3%. The SPDR S&P Homebuilders ETF (XHB) was down 1.25%. The Energy Select SPDR ETF (XLE) rebounded 3.2% and the Financial Select SPDR ETF (XLF) rose 0.8%. The SPDR Healthcare Sector Selection Fund (XLV) rose 0.4%.

Mirroring speculative stock stories, the ARK Innovation ETF (ARKK) fell 6.9%, hitting a five-year low on Thursday. The ARK Genomics ETF (ARKG) slid 5.6% last week. Tesla stock continues to lead across Ark Invest’s ETFs.


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growth stock to watch

Shift4Payments stock rose 4.1% to 54.06 last week. The stock witnessed four sharp fluctuations, but in the past two weeks it has tightened near its highest levels in seven months. The RSI line is at an eight-month high, reflecting Shift4’s outperformance against the S&P 500. However, FOUR stock does not have a clear buy point at the moment.

Shift4’s profit and sales growth accelerated in the most recent quarter, with the company significantly expanding its target markets.

CELH stock fell 1.85% to 106.79 last week, consolidating just below the 21-day line and approaching the 10-week line. Celsius stock briefly surpassed 118.29 buy points of Cobb’s base earlier this month before pulling back. But this let the 10 week line catch up, while the RS line held near the highs. A strong rebound from the 10-week line and above the 21-day line would also break a short downtrend, which would provide an early entry for CELH stock.

Celsius is seeing buoyant sales growth and should see strong earnings in 2023, but the energy drink maker has a caffeinated rating.

Impinj stock rose 4 cents to 111.87, with Friday’s drop of 2.9% taking it lower to the 50-day and 10-week lines for the first time since the strong breakout of the earnings gap on Oct. 27. Four consecutive weeks off record highs, but the RS streak hasn’t fallen much. The upward bounce from the 50-day line would provide an early buying point.

Impinj’s earnings are up in 2022, with solid gains next year.

Enphase stock fell 3.1% to 293.95 last week, below its 50-day line. The 316.97 point of purchase of a mug with a handle is no longer valid. The ever-volatile ENPH stock may have a few weeks into the new consolidation. A move up from the 50-day line – possibly reclaiming the old buy point – could offer a strong entry.

Enphase earnings and revenue growth is accelerating rapidly, with strong growth in 2023 and beyond with solar incentives in place for years to come.

Box shares have traded tightly in the past two weeks, falling 0.7% to 31.01. The cloud-based data warehousing company is on the edge of a 29.57 cup handle buy point zone, according to MarketSmith analysis, after the December 12 breach. The last discontinuation can be taken as an indication of the eight-month boost. This buy point is 31.10, but investors can look for an early entry. Ideally, the 21-day line would catch up and the 50-day line would narrow the gap with Box stock.

The fund’s earnings growth has accelerated over the past two quarters.

Market rally analysis

The stock market rally is still under severe pressure. The major indices were mixed during the week, and haven’t pulled back after the previous big and ugly week off.

The Dow rose modestly for the week after testing the 50-day line several times.

The S&P 500 fell modestly, but that masked some significant volatility for the week. The benchmark just regained its 50-day moving average on Wednesday. On Thursday, the S&P 500 and other major indices fell to their worst levels in weeks, but closed lower.

On Friday, the S&P 500 rose slightly, but below the 50-day line. The Invesco S&P 500 Equal Weight ETF (RSP), with an underweight of tech giants like Apple, rallied on Friday to regain 50 days.

Nasdaq was the big laggard, with Tesla and Nvidia stock being notable laggards. But there was widespread weakness in growth stocks, especially among chip names after weak results and guidance from the memory chip maker micron technology (MU).

The S&P 500 needs to regain the 50-day line, but that would only be a first step.

It is not clear whether the market will bounce, head towards lower lows, or move sideways erratically for an extended period. The latter may be more likely until there is some clarity about when and where the Fed will stop raising interest rates, and whether the economy will slide into a clear recession.

While growth stocks like Enphase and Celsius are worth watching, many medical stocks and other defensive growth paths are still holding out. Metals, mining, industry, housing and some energy plays are doing relatively well.


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What are you doing now

The stock market simulated an upswing during the week, with the technical picture not changing significantly. Apart from the Dow Jones, the major indices are below the major moving averages. Leading stocks have been hard to hold on to, at best.

Investors should have minimal exposure and be wary of adding new deals. Don’t get excited on a strong open or even a bullish session or two.

Keep your watchlists up-to-date. Lots of stocks are created or prepared from a variety of sectors. Some names show strong relative strength but don’t have a clear buying point. It’s okay now.

In the meantime, spend some time reviewing your trades over the past year, including your top gainers and losers, and trades you didn’t make but wish you had. Were you following your rules, and were your rules sound?

Read the big picture every day to stay in sync with market trend, leading stocks and sectors.

Please follow Ed Carson on Twitter at @employee For stock market updates and more.

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