Market Rally Gathers; Here’s what to do now


Dow Jones futures were little changed after the close, along with S&P 500 futures and Nasdaq futures, after a strong session for the stock market rally.




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Major indices posted robust gains as bank fears continued to ease Micron technology (mu) offered hope for a chip bottom despite a dismal report and near-term outlook.

A number of stocks are buy signals, including Micron stock, Microsoft (MSFT), Shift4Payments (FOUR), Mobileye (MBLY), STMicroelectronics (STM), Wynn Resorts (WYNN), DraftKings (DKNG), rambus (RMBS), Skyline Champion (HEAVEN) And working day (WTAG).

Microsoft, Rambus, Workday and STM shares are above traditional buy points. MU stocks, Shift4Payments, Wynn, DraftKings and Skyline bounce off key areas and break declining trendlines for early entry. MBLY stock has regained important levels.

SKY Stock, Rambus and Wynn Resorts are included IBD Leaderboard. WYNN Stocks and DraftKings are on SwingTrader. MSFT shares are Long-Term Leaders on IBD. STMicro, DraftKings, Shift4Payments and WDAY stocks are on the IBD 50. MBLY stock is on IBD Big Cap 20. Skyline Champion was also Wednesday’s IBD stock of the day, while Tuesday’s was FOUR stock.

Regional banks haven’t rallied much this week, but at least they’re not crashing. contested First Republic (FRC) bounced off. Larger banks such as JPMorgan Chase (JPM) And Bank of America (BAK) have rebounded this week after hitting at least 2023 intraday lows on Friday.

Given the performance of the major indices and leading stocks, investors should seek to increase exposure. But don’t rush it.

Dow Jones futures today

Dow Jones futures were little changed from fair value. S&P 500 futures and Nasdaq 100 futures were roughly flat.

Keep in mind that overnight action in Dow futures and elsewhere doesn’t necessarily translate to actual trading in the next regular trading session.


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


stock market rally

The stock market rally opened solidly higher with major indices gaining late afternoon.

The Dow Jones Industrial Average rose 1% in trading on Wednesday. The S&P 500 index rose 1.4%, with Micron stock among the top performers. The Nasdaq Composite rose 1.8%. Small-cap Russell 2000 gained 1.1%.

US crude prices fell 0.3% to $72.97 a barrel.

The 10-year Treasury yield was essentially flat at 3.565%.

ETFs

Among the growth ETFs is the innovator IBD 50 ETF (FFTY) rose by 2.2%. The iShares Expanded Tech Software Sector ETF (IGV) rose 1.7% with MSFT shares a key position and Workday also a component. The VanEck Vectors Semiconductor ETF (SMH) jumped 1.7%, with MU shares and STMicro both being SMH components.

The ARK Innovation ETF (ARKK) rose 3.8% and ARK Genomics ETF (ARKG) 3.2%.

SPDR S&P Metals & Mining ETF (XME) rose 1%, while the US Global Jets ETF (JETS) rose by 2.15%. SPDR S&P Homebuilders ETF (XHB) rose by 0.8%. The Energy Select SPDR ETF (XL) rose 1.5% and the Health Care Select Sector SPDR Fund (XLV) increased by 0.3%

The Financial Select SPDR ETF (XLF) rallied 1.5%, with JPM stock and Bank of America both holding significant positions. The SPDR S&P Regional Banking ETF (KRE) increased by 1.1%. FRC stock, a KRE component, is up 5.6% on Wednesday and 15.4% so far this week. It’s still down 88% in March.


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Analysis of the market rally

A day after major indices offered key support, the rally attempt in equity markets picked up momentum and surmounted some notable levels.

The Nasdaq Composite led the way with a strong rebound after edging close to its 50-day moving average from Tuesday’s lows. The 12,000 level is looming as the next challenge with the peak of the February 2nd market rally not far above.

The S&P 500 moved back above 4,000 and the 50-day moving average and broke a downward sloping trendline.

The Dow Jones closed above its 21-day moving average for the first time since March 6, but is still below its 200-day moving average. The Russell 2000 is recovering from the Friday 2023 lows but has some distance to the 50-day and 200-day moving averages.

Nasdaq volume was higher than Tuesday. NYSE volume appeared to be up slightly. The exchange volume was below normal.

Risers decisively led decliners on the NYSE and Nasdaq, with breadth increasing slightly this week. However, market leadership remains relatively narrow.

Chip stocks were big gainers Wednesday after retreating ahead of Micron’s earnings report on Tuesday. In addition to MU stocks, Mobileye, Rambus and STM are chip games that flash buy signals. Several others showed bullish action.

Microsoft and WDAY stock are among a number of software names in buy zones, while SKY stock is one of several builders rising. Investors place their bets on games of chance such as Wynn Resorts and DKNG stocks.

FOUR stock is among a few payment stocks that are doing well, including fly wire (FLY). MercadoLibre (MELI), which has chart action similar to Shift4, is an e-commerce giant with a booming payments business.

While bank fears are on the back burner, government bond yields are not soaring higher. Recent banking troubles, even after the worst is over, are likely to result in less lending and tighter financial conditions generally, slowing the economy and reducing the need for the Fed to raise interest rates. Markets are currently trending towards a Fed rate pause in early May. Friday’s PCE inflation report, the Fed’s favorite price indicator, could change this dynamic.


Time the market with IBD’s ETF market strategy


What now

The stock market is gaining some momentum as the banking crisis seems to have peaked while the Fed’s rate hikes are over or almost over. Major indices have shown a mix of resilience and strength this week, while a number of stocks are showing buy signals.

So it’s a good idea to gradually add some exposure. If the market has real legs, it won’t be long before it gradually becomes 100% invested. If the market soon reverses down or expires, mechanically and psychologically it will be much easier to exit if you are not fully engaged.

But it’s important to be ready by updating your watchlists and staying engaged.

Read The Big Picture every day to keep up to date with market direction and leading stocks and sectors.

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

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Source : www.investors.com

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