It was a wild day for the stock market to rally, at least for the Nasdaq index and especially speculative growth names like rival Tesla and China EV stocks. New (NIO). The Nasdaq fell more than 3% on the day, but recovered with a modest loss. Bitcoin price fell for the second session in a row.
Square earnings topped the number of views, aided by bitcoin operations. But Net revenue and purchase volume missed Estimates. Recent IPOs Until work (UPWK) And the PubMatic (PUBM) Also topped the views.
The Square Stock is down 5% late. SQ stock fell 4.3% on Tuesday after bouncing off the 50-day streak. Upwork stock rose 19% and PubMatic jumped 10% overnight after both rose sharply on Tuesday from key intraday levels. UPWK rebounded from the 50 day streak to finish modestly high. PUBM closed down modestly but after dropping below the point of purchase, making it extremely difficult to hold.
The Nasdaq was blinking Vertical violation During the day as I quickly stumbled across the 50 day streak. But the strong rebound of modest losses leaves market direction unclear. The Dow Jones and S&P 500 wiped out relatively modest losses to close above the breakeven point. A rise in the stock market could simply be in the rotation of the sector, with rising yields and commodity prices spurring a shift to mining, agricultural and financial stocks.
Dow Jones components Larva (Cat), Disney (Dis) And the C. B. Morgan Chase (JPMAdvanced, all extended from recent hacks. Microsoft (MSFTIt fell but bounced off the 10-week streak and closed above 232.96 Point purchase.
Bitcoin price fell below $ 45,000 during the day Tuesday after surpassing $ 58,000 on Sunday. The cryptocurrency recovered over $ 48,000 overnight. Bitcoin was much higher than it was before the market opened on February 8, when Tesla revealed that it had bought $ 1.5 billion worth of cryptocurrency.
Tesla rebounds, shattered backbone
Tesla stock fell 2% to 698.84 on Tuesday but after falling to 619. Shares are still down nearly 11% so far this week and 11% below their 10-week streak. TSLA shares rose slightly overnight as Cathy Wood of ARK Invest said ARK bought “a lot” on Tuesday. It comes after a major Ark bought Tesla stock on Monday and Wood spoke about the company last week.
Tesla is ARK’s largest subsidiary via its ETFs and in many ways it is a sign of the type of speculative growth plays that Cathy Wood focuses on.
Nio shares fell 3.1% to 49.11 after sliding as low as 41.66. Shares fell 7.8% on Monday, and crossed the 50-day streak. Nio’s stock soared overnight. Nio’s earnings are due on March 1.
Some EV stocks, however, performed much worse. Ev delivery truck maker The Workhorse Group (WKHSI lost my major USPS vehicle contract to Oshkosh Corp. (Occupational Safety and Health). WKHS stock broke 47%, then continued its sharp decline overnight. Oshkosh shares were up 6.1% on Tuesday, then jumping in extended trading.
Churchill Capital (CCIV38% crashed. Luxurious EV startup Lucid Motors confirmed it will go public in the SPAC merger with Churchill Capital late Monday. CCIV stock is up 468% since January 8, as Lucid SPAC rumors grow. Churchill Capital rose modestly overnight.
Tesla’s stock is on IBD LeaderboardHowever, the position was reduced from a half to a quarter of the position on Tuesday. There is a Microsoft stock on Leaderboard and Long-term leaders of IBD. Disney and Caterpillar stocks operate SwingTrader.
Dow Jones futures today
Dow futures are down 0.1% versus fair value. S&P 500 futures are down 0.15% and Nasdaq 100 futures are down 0.2%.
The number of coronavirus cases around the world has reached 112.62 million. The death toll from Covid-19 has exceeded 2.49 million.
The number of Coronavirus cases in the United States reached 28.89 million, with the number of deaths exceeding 514,000.
The stock market rises Tuesday
The stock market rally began on Tuesday as the Nasdaq led sharp losses. But the major indices trimmed losses, as Fed Chair Jerome Powell spoke. Powell said that there is a link between federal liquidity and asset prices. But he reiterated his commitment to the current aggressive monetary policy and stressed that strong job growth is a primary goal. Powell also said that the Fed is looking closely at whether to issue a “digital dollar”, but not the important technical and political issues.
The Dow Jones Industrial Average was slightly higher on Tuesday Stock market tradingJust below standard levels. The S&P 500 rose 0.1%. The Nasdaq Composite Index fell 0.5 percent.
Microsoft stock fell to as low as 228.73 intraday, testing the 10-week streak but not with a sharp drop like many stocks on Tuesday, including Square. Equities also never undermined early entries around 227-228. By the close, the MSFT stock had recovered to a 0.5% loss to 233.27, above the official 232.96 Point purchase.
Growth stocks generally tumbled, even with the big rebound in the afternoon.
between the The best ETFs, The Innovator IBD 50 ETF (fifty(Down 2%, while the Innovator IBD Breakout Opportunities ETF)fit2.1% drowned. IShares Technology and Software Extended Fund (ETF)IGV), Down 1.1%, with MSFT being the top component. (VanEck Vectors Semiconductor Foundation)SMH) Slipped 1%.
Reflecting more speculative stories stocks, the Ark Innovative ETF sank 3.3% and the Ark Genomics ETF 3.05%.
Stock market analysis
The Nasdaq index fell during the day to above the January 29 low, then the 13000 level moved up and down before roughly returning to par.
We will need to see market reaction in the next few days to set the record straight for Tuesday.
Tuesday may mark the beginning of a rally for the Nasdaq index and big gainers such as Tesla and Nio. But sometimes, a stock market rally will find support, and then break it. This is what happened in the heavy sell-off in early September, as the Nasdaq trimmed losses on the second day of decline before dipping on the third day to close below the 50-day line.
With the Dow still holding its ground as real economy stocks boom, in many ways this looks like a sharp turnover of the sector within the market rally.
For now, this is still a definite rally in the stock market. This is a good day to read The Big Picture To stay in sync with market trend, stocks and leading sectors.
What are you doing now
Investors should be somewhat defensive, especially on high-value growth stocks. The Nasdaq has been trending lower for the past several sessions. Meanwhile, several growth stocks took a hit in the charts after the past two days. Even before the recent downturn, there weren’t many good buying opportunities.
One reason to take partial profits when the Nasdaq was extended in late January to early February is to make it easier to handle withdrawals. Selling stocks extended to strength can help you hold a primary position through pullbacks. If you sell some of the winners at Tuesday’s lows, those early partial profits raise at least the average selling price.
Don’t let the stock drop by more than 7% -8% of the purchase price. Yes, if you have to sell at their lows on Tuesday you may regret it, at least for now, but the point is to preserve your capital, not hope for a recovery.
In the meantime, be sure to keep working on your watchlists. The past several sessions have demonstrated the value of leadership diversification. Carrying a few names like Disney would have made the last few days less painful.
Please follow Ed Carson on Twitter at IBD_ECarson Stock market updates and more.
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