X Apple (AAPL) is carving a handle, narrowing its potential buy point. Apple stock technically already has a buy point on a weekly chart. Tesla ( TSLA ) climbed to an aggressive buy point on Tuesday. Outside of Tesla stock, most electric vehicle makers are struggling. However, many EV related games are almost buy points or can be made active now. They include lithium producers Albemarle (ALB) and Livent (LTHM). Also chip plays On Semiconductor (ON), Axcelis Technologies (ACLS) and Monolithic Power Systems (MPWR). That comes ahead of Wednesday night’s earnings from chip giant Nvidia ( NVDA ), with its data center comments also important to Monolithic Power. On Tuesday night, TurboTax maker Intuit ( INTU ) rose with strong earnings, while La-Z-Boy ( LZB ) saw a jump in its results. The luxury home builder Toll Bros. ( TOL ) and youth clothing retailer Urban Outfitters ( URBN ) retreated with mixed results, while Advance Auto Parts ( AAP ) reversed with disappointing EPS and sales. Nordstrom ( JWN ) retreated as it cut guidance amid a glut of stocks. ALB stock is on the IBD Leaderboard. MPWR stock is in the IBD Long-Term Leaders. Tesla, Monolithic Power, Axcelis and Onsemi are in the IBD 50. Albemarle, Monolithic and ON are in the IBD Big Cap 20. Monolithic Power was the stock of the day on Tuesday’s IBD. Livent was Monday’s Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures fell 0.15% against fair value. S&P 500 futures fell 0.15%. Nasdaq 100 futures fell 0.2%. Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session. Join IBD’s experts as they analyze stocks that can act in the stock market’s rally on IBD Live
Stock market rally
The stock market’s rally faltered on Tuesday, continuing the retreat, but with major indexes nearing their 21-day moving averages. The Dow Jones Industrial Average fell 0.5% in Tuesday trading. The S&P 500 lost 0.2%, with TWTR stock easily the worst performer. The Nasdaq composite, up most of Tuesday’s session, closed down less than 1 point. The small-cap Russell 2000 rose 0.2%. U.S. crude oil prices rose 3.4 percent to $93.74 a barrel, continuing to rebound from Monday’s lows after Saudi Arabia suggested OPEC could cut production. Natural gas futures fell 5 percent, reversing from 14-year highs, even as Freeport LNG pushed back the restart of its Texas facility from early October to early to mid-November. The yield on the 10-year note rose 2 basis points to 3.05%. The 10-year yield hit 3.08% intraday and then briefly fell 3% after several weak economic reports. Powell’s policy speech will likely weigh on Treasury yields and the chances of a rate hike. Markets are fully priced in at least 50 basis points for Sept. 21, but are divided on whether policymakers will opt for a third consecutive Fed rate hike of 75 basis points.
ETFs
Among the top ETFs, the Innovator IBD 50 ETF ( FFTY ) rose 1.6%. The iShares Expanded Tech-Software Sector ETF ( IGV ) fell 0.2%, with the CRM stock the top IGV component. VanEck Vectors Semiconductor ETF ( SMH ) rose 0.65%. Nvidia stock is a major SMH company. The SPDR S&P Metals & Mining ETF ( XME ) gained 2.45%. The Energy Select SPDR ETF (XLE) rose 3.6% and the Financial Select SPDR ETF (XLF) fell 0.4%. The Health Care Select Sector SPDR Fund ( XLV ) fell 1.4%. Reflecting the more speculative stocks, the ARK Innovation ETF ( ARKK ) fell 0.55% and the ARK Genomics ETF ( ARKG ) gained 1.8%. Tesla stock is a major holding in Ark Invest’s ETFs. Five Best Chinese Stocks to Watch Now
Apple Stock
Apple shares fell 0.2% to 167.23, trading just above its 21-day moving average. On August 17, AAPL stock opened a downtrend line, but then retreated on Friday. Now tech giant Dow Jones is working on a handle. Apple stock needs one more day on a daily chart to get the right handle with a buy point of 176.25. On a weekly chart, AAPL stock already has that handle. The relative power line for Apple stock is right at a record high, a bullish sign.
EV shares near points of purchase
Lithium plays Albemarle and Livent reported strong earnings and guidance earlier this month. Albermarle shares rose 1.9% to 281.03, after reversing higher on Monday. ALB stock is extending from a 250.25 buy point from a handle within a huge handle. However, shares are in the range of an alternative entry at 273.78, just above the high of the handle 31% deep. Investors could use this as an opportunity to buy shares of ALB or add some shares. LTHM stock fell 5.1% to 30.33. Livent stock has a 31.63 cup-with-handle buy point, but just downtrending at the handle. This would offer an early entry, although low volume is a problem. At Semiconductor, Axcelis Technologies and Monolithic Power, chip plays with EV exposure all delivered strong results in early August. ON stock rose 3.6% to 71.25 on Tuesday. This is again above a 69.36 buy point, although the +10 cent consolidation high at 71.35 is also a legitimate entry. ACLS stock climbed 2.2% to 72.22, hitting a 79.93 buy point from a deep cup-with-handle base. Axcelis’ handle was shaky, but the chip toolmaker found support at the 21-day line. Axcelis stock could make an early entry from the handle’s downtrend break. Shares of MPWR rose 1.2% to 497.51, around the 21-day line. Monolithic Power stock has a buy point of 541.49 cup-with-handle, according to MarketSmith analysis. Stocks fell on Friday and Monday, undercutting the 21-day mark, giving a bit more of a bounce after a strong rally. Monolithic Power is in a number of markets, including data centers, industrial applications and electric vehicles.
Tesla stock
Tesla shares were up 2.3% at 889.36, down from its 21-day moving average, slightly below its 200-day line. TSLA stock could make a bullish entry if it clears short-term highs, with an emphasis on the bullish. Tesla stock will be split 3-for-1 after Wednesday’s trading. Tesla Vs. BYD: Which EV giant is better to buy?
Market Rally Analysis
The stock market rally was mixed on Tuesday, with all major indices hitting resistance at the 21-day moving average. The Nasdaq lost a fraction after falling 2% on Friday and 2.55% on Monday. The Dow Jones, which closed Monday just below its 21-day high, lost a little more ground on Tuesday. Nvidia and Salesforce.com (CRM) earnings will be in focus on Wednesday night. But the market rally may be limited until Fed chief Powell’s big speech on Friday morning. Volume was particularly light this week. Shares of EV suppliers like Albemarle and Axcelis look interesting. Energy stocks were the leaders, but many have already passed buy points. Energy prices are subject to large daily or even intraday swings, with a clear example of the bearish reversal in natgas futures on Tuesday. Some steel projects are created along with fertilizer and agriculture stocks. Biotechs and pharmas like Vertex Pharmaceuticals ( VRTX ) and Eli Lilly ( LLY ) had a rough session, but they’re not broken for now. Time the Market with IBD’s ETF Market Strategy
What should we do now
The market rally is in a pullback within an uptrend within a bear market. On a very short-term basis, investors should be cautious about increasing exposure, especially with Fed chief Powell looming. More stocks are creating bullish setups, so investors should use monitors and update watchlists. Read The Big Picture every day to stay in sync with market direction and top stocks and sectors. Follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more. YOU MIGHT ALSO LIKE: Do you want to make quick profits and avoid big losses? Try SwingTrader The best growth stocks to buy and watch IBD Digital: Unlock IBD’s Premium Stock Lists, Tools and Analysis Today Vertical Breaks: Why You Should Recognize This Market Indicator
