Dow Jones futures as well as S&P 500 futures and Nasdaq futures were hardly changed on late Monday. The stock market rally hit record highs in the major indices, led by megacaps Apple ((AAPL), Microsoft ((MSFT), Amazon.com ((AMZN), Google parent alphabet ((TogetL) and Facebook ((FB), Masking weakness in growth names with higher octane numbers.
Apple stocks, Microsoft, Amazon.com, and Google all have trillion dollar ratings, while Facebook stocks are the fifth largest S&P 500 component at $ 789 billion. Apple has blown through several early entries and is almost official Buy point. Microsoft, Amazon, and Google stocks are all actionable.
In addition to megacap technologies from Apple, Amazon, Microsoft, Google, and Facebook, a few other big-cap names have done well, including JPMorgan Chase ((JPM), Walt Disney ((DIS), Visa ((V.) and MasterCard ((MA). JPMorgan stock is in a buy zone. Disney is trying to achieve a brief consolidation while Visa and Mastercard are making entries early.
All of these stocks are included in the S&P 500 index. Apple, Microsoft, Disney, JPMorgan, and Visa stocks are also Dow Jones components.
Dow Jones Futures today
Dow Jones futures fell higher than their fair value. S&P 500 futures and Nasdaq 100 futures were just above fair value.
Coronavirus cases reached 81.58 million worldwide. Covid-19 deaths topped 1.77 million.
Coronavirus cases in the US have hit 19.72 million people, with deaths over 342,000.
The UK is expected to approve the AstraZeneca coronavirus vaccine on Tuesday to speed up the vaccination surge. The UK has been vaccinating Pfizer and BioNtech for several weeks.
AstraZeneca ((AZN) CEO Pascal Soriot said Sunday that new data will show the vaccine is as effective as the Pfizer and Modern ((MRNA) Vaccinations that protect about 95% of patients. In addition, the vaccine is 100% effective in preventing serious Covid cases, which the Moderna vaccine has also shown.
Previous studies showed the AstraZeneca vaccine was, on average, 70% effective, but Soriot told the UK Sunday Times that “we figured out the formula for success” but did not provide any further details.
The AstraZeneca vaccine is much easier and cheaper to make mRNA-based Pfizer and Moderna vaccines, especially for developing countries.
AstraZeneca cannot apply for FDA approval for several weeks until a US-based late stage is completed.
AstraZeneca stock rose 1.8% on Monday. Pfizer was down 1.2%, while BioNTech and Moderna lost more than 9% each.
Stock market rally
The stock market rally had a solid day, with all major indices hitting record highs after President Trump signed the stimulus bill after threatening a veto.
The Dow Jones Industrial Average rose 0.7% on Monday Stock exchange trading. The S&P 500 Index gained 0.9%. The Nasdaq network rose 0.7%.
Meanwhile, many top growth stocks had a difficult session.
Caravan ((CVNA) fell 8.5%, almost triggering a breakout from Monday’s low. Trade Desk ((TTD) fell nearly 11% and broke its 21-day line. China EV share Xpeng ((XPEV) fell 9.2% below the 50-day mark for the first time. Shopify ((BUSINESS) 6.4%.
Under the best ETFs, the innovator IBD 50 ETF (FFTY) lost 1.75%, while the innovator IBD Breakout Opportunities ETF (STRUGGLE) 2. The iShares Expanded Tech-Software Sector ETF (IGV) declined 1.4%, even with Microsoft stocks topping the list. The VanEck Vectors Semiconductor ETF (SMH) decreased by 0.2%.
Apple The stock gained 3.6% to 136.69, which translates into a monthly gain of nearly 15%. That’s a record high and just below the September 2nd all-time high of 137.98 Buy point 10 cents above. AAPL stock has already deleted and is now expanding on several early entries, but a conventional breakout could be coming soon. The relative strength line Apple stock has also almost risen to a new high. The RS line, the blue line in the charts provided, shows the performance of a stock compared to the S&P 500 index.
Microsoft stock rose 1% to 224.96, its highest closing price since September 2, and was above a trend line. The stocks have already rallied bullishly from the 10-week line in the last several sessions. Another alternative entry for MSFT stock would be 228.22. The official buy point is 232.96 MarketSmith analysis.
Amazon The stock fell 3.5% to 3,283.96, rebounding from the 10 week line and breaking up short-term resistance. It also crossed a short trendline from the October 12th high of 3,496.24. This high of + 10 cents would be another early entry with 3,552.35 as the official buy point.
Google stock rose 2.3% to 1,773.96, bouncing off its 10-week line, and taking over yours 21-day exponential moving average. It’s well above a previous buy point of 1,726.20 again and is starting to build the right side of a new consolidation.
The Facebook share rose 3.6% to 277 and was thus back above the 50-day mark. The RS line for FB shares hit a five-month low on Christmas Eve.
JPMorgan stock lost its intraday highs but was still up 0.7% to 125.34. This ranges from a 123.60 handle entry on a long, deep consolidation. The RS line for JPM stocks has been improving for several months but is still well below its December 2019 high. A $ 30 billion buyback plan last week sparked the JPM stock breakout which was also carried by rising government bond yields and widening government bond spreads.
Visa Stock, Mastercard Stock
Visa stock rose 1.9% to 212.63 while Mastercard stock rose 2.5% to 344.47. Both have bounced back from their 10 week lines and have just cleared short trend lines. Visa has one flat base with a buy point of 217.75, though investors might treat this as a handle within a consolidation that dates back to September 2nd. For MA stocks, investors might see 357.10 as the handle entry in their consolidation. The RS lines for Visa and Mastercard stocks have declined slightly for several months, but that followed long outperformance runs.
Disney stock rose nearly 3% to 178.86 to end a brief consolidation at 179.55. That’s after an outbreak in early November. Investors are optimistic about the future of Disney + Streaming while also looking to a post-pandemic world where theme parks and cinemas can be fully reopened.
Rotation of the stock market rally?
In recent weeks, growth investors have become accustomed to solid gains in their holdings, while major indices moved slightly to slightly higher. This reflected big-cap tech like Amazon stock, which is moving sideways or rising more slowly than the broader market, with the exception of Apple. On Monday, the stock market rally turned the bill around, with tech titans and other large caps fueling solid gains in the major indices as growth and speculative names declined.
Big-cap technicians have fallen out of favor for a few months while financials have had a difficult 2020. Perhaps it is time for these slower but solid market players to make a fresh move as growth names – particularly coronavirus games or coronavirus-friendly stocks – take a breather. But is this the start of a longer-term rotation or just a temporary pause in growth stocks?
The short week after Christmas will make it harder to find out. Some investors may now take profits and expect to sell after Jan 1st, as investors can sell big winners without paying capital gains for another year.
However, if you’re trying to explain why your stocks are falling by assuming investors expect other investors to sell in the New Year, you can advise against prudent portfolio management.
When a stock triggers sell or take profit rules, don’t streamline, be critical. If your portfolio takes a serious hit, you may want to cut holdings further while maintaining full positions in some core holdings.
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