Dow Jones futures: Boeing and Apple chipmakers in buy territory; Tesla is delayed on the GM deal

Dow Jones futures trended lower overnight, as did S&P 500 futures and Nasdaq futures. DocuSign earnings and a Tesla charging contract with General Motors (GM) were the focus overnight.




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The stock market rally on Thursday showed modest to solid gains across the major indices, with the Nasdaq recovering somewhat after Wednesday's downturn. Meanwhile, small caps and mid-caps fell slightly, recovering well from their lows and giving back only part of their recent gains.

Dow Jones giant Boeing (BA), cardinal health (CAH), floor & decor (FND) and TG Therapeutics (TGTX) are in the buy zone.

That's how it is Taiwan semiconductor manufacturing (TSM). Taiwan Semi is the world's largest chip foundry producing semiconductors Nvidia (NVDA), Apple (AAPL), Qualcomm (QCOM) and many others. Taiwan Semi reports May sales early Friday.

Tesla (TSLA) extended its record streak of high volume days on Thursday. After the market closed, it was announced that General Motors would use Tesla's supercharger and charging technology. This follows a similar deal Ford engine (F) Announced at the end of May. TSLA shares and GM both rallied in extended trading.

DocuSign (DOCU) announced first-quarter results late Thursday. DOCU stock rose 5% in extended trading on its earnings and guidance. The digital document and e-signature software company is operating at a buy point of 69.45 and hits its 200-day moving average in late May. DocuSign shares rose 2.2% on Thursday to 58.48.

Tesla shares and Nvidia are on the IBD leaderboard. BA stock was added to SwingTrader on Thursday, joining FND stock. Floor & Decor was Thursday's IBD stock of the day.

Dow Jones futures today

Dow Jones futures fell 0.15% from fair value. S&P 500 futures and Nasdaq 100 futures were down 0.1%. Tesla stock is a key member of the S&P 500 and Nasdaq 100.

The 10-year government bond yield rose 3 basis points to 3.74%.

Late Thursday, former President Donald Trump said on his Truth Social website that he has been charged with federal criminal charges related to classified documents kept after he left the White House. Several organizations have confirmed Trump's criminal indictment, his second this year.

Keep in mind that nightly action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular trading session.


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stock market rally

The stock market rally gradually improved over the course of Thursday, with indices closing near their session highs.

The Dow Jones Industrial Average rose 0.5% in trading on Thursday. The S&P 500 index rose 0.6%. The Nasdaq Composite rose 1.0%. The Russell 2000 small-cap index fell 0.4%.

US crude prices fell 1.7% to $71.29 a barrel.

The 10-year government bond yield fell 7 basis points to 3.71%.

ETFs

Among growth ETFs, Innovator IBD 50 ETF (FFTY) was up 0.8%, while Innovator IBD Breakout Opportunities ETF (BOUT) was up 0.5%. The iShares Expanded Tech-Software Sector ETF (IGV) rallied 1.3%. The VanEck Vectors Semiconductor ETF (SMH) is up 1.2%. TSM shares are a big SMH component alongside Nvidia.

ARK Innovation ETF (ARKK) is up 1% and ARK Genomics ETF (ARKG) is down 0.1%, reflecting more speculative story stocks. Tesla stock is Ark Invest's #1 ETF.

The SPDR S&P Metals & Mining ETF (XME) was down 0.2% and the Global X US Infrastructure Development ETF (PAVE) was modestly down 0.1%. The US Global Jets ETF (JETS) rose 0.6%. SPDR S&P Homebuilders ETF (XHB) is down 0.35%, with FND shares making up a notable XHB stock. The Energy Select SPDR ETF (XLE) was down 0.4% and the Health Care Select Sector SPDR Fund (XLV) was up 0.6%.

The Financial Select SPDR ETF (XLF) lost 0.1%. The SPDR S&P Regional Banking ETF (KRE) fell 1.2%.


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Stocks in buying areas

Boeing shares rose 2.9% to 218.11 on Thursday, beating various short-term highs and a trendline, allowing for an early entry. The volume was robust. BA stock is nearing a buy point of 221.33 from a nearly 4 month flat base. That was followed by a powerful move for the Dow aerospace giant from late September through mid-February.

CAH stock climbed 2.5% to 85.33, bouncing off the 21-day and 10-week moving averages and breaking a brief downtrend in a minor consolidation just above the 5-month base that was decisively cleared in early May. Early Thursday, Cardinal Health slightly raised the midpoint of its 2023 earnings guidance and announced a $3.5 billion buyback of CAH stock.

TGTX shares rebounded 7.3% to 28.98, exiting the 10-week moving average and reclaiming the 21-day moving average and breaking a downtrend. Stocks nearly doubled from a late-March to early-March breakout before retreating. TG Therapeutics is still losing money. Revenue soared 286% last quarter, but only to $7.8 million. Investors may get clues on the monthly sales next week.

FND shares fell 1.2% to 96.55 on Thursday on light volume. But that was followed by a 5.1% surge on Wednesday in heavy trading, retaking the 50-day moving average. The floor covering dealer can still be sued for this. Floor & Decor stock also has a buy point for mugs with handles at 101.49.

According to MarketSmith analysis, TSM stock fell slightly by 0.35% to 99.94, still above a consolidated buy point of 98.99. Taiwan Semi initially jumped into a buy zone on May 25 after Nvidia presented overwhelming earnings and guidance. On Monday, Taiwan Semi stock fell almost to the 21-day moving average before cutting losses significantly. Taiwan Semiconductor will announce its May sales early Friday.

Meanwhile, Nvidia shares rose 2.8% to 385.10, continuing to range after the earnings gap on May 25. NVDA stock does not currently have a buying opportunity, although a tight pattern or a drop to, say, the 21-day moving average could offer opportunities for stock increases.

Tesla stock

Tesla shares rose 4.6% on Thursday to 234.86, their highest in seven months. The EV giant has now rallied for 10 sessions, its longest winning streak since 11 sessions in January 2021. But it's a record nine consecutive gains on above-average volume. TSLA stock is progressively extended from a buy point of 207.79.

Tesla-GM charging contract

As part of Thursday night's Tesla-GM deal, General Motors will gain access to 12,000 SuperChargers next year via an adapter. GM will also start using a charging port used by Tesla starting with the 2025 models. The deal will boost Tesla's sales, but also significantly expand charging capabilities for GM and Ford while they ramp up EV production.

Tesla stock is up 5% late.

GM stock is up 4% overnight, signaling a return above the 200-day moving average.

Analysis of the market rally

The stock market rally had another constructive day, with Wednesday's losers generally finding support while recent big winners resisted sharp falls.

The Nasdaq recovered from above its 10-day moving average after leading Wednesday's decline. However, it is unclear whether a major move can occur without an extended pause or pullback. The Composite and Nasdaq 100 are no longer extended from their 50-day moving averages, but it wouldn't take much to start looking stretched again.

The S&P 500 is trading right at the 2023 highs and just below a 52-week high. The Dow Jones has surpassed last week's highs and is not far from the best readings of the year.

Overall, winners and losers were roughly even after the climbers had won significantly in the previous two sessions.

The Russell 2000 and S&P MidCap 400 held almost all of Wednesday's strong gains.

The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) is up 0.85%, still near its 52-week high.

The Invesco S&P 500 Equal Weight ETF (RSP) posted a tiny gain after two consecutive gains of 0.7%.

Ideally, the Nasdaq and many leading technology stocks would pause for a while or decline slightly while other sectors take the lead more broadly. There have been signs of this over the past week, but it may not last.

The guide can rotate or expand. There aren't many stocks giving buy signals right now.

Software took a major hit on Wednesday, although chart damage depended on whether individual names were extended or recent breakouts near buy points. Some of these names may bounce back quickly, but others may not. Chipmakers, which were generally better on Wednesday, have a number of stocks showing constructive development.

Real estate holdings are generally showing strength. Tourism is on the move, but not many stocks seem viable right now. BA stock is among several aerospace companies showing strength, as are machinery and industrial stocks more generally. Some manufacturers of biomedical and medical products are doing relatively well.


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What now

The stock market rally is in a confirmed uptrend, with the Nasdaq and S&P 500 hitting 2023 highs and showing some signs of improving breadth. Therefore, investors can try to increase their exposure even if buying opportunities are limited.

A number of stocks across a wide range of sectors are establishing or potentially establishing themselves, hitting buy points and then bullishly retracing. Keep your watch lists up to date.

Adapt to market conditions and leadership as they are, not as you wish.

Read The Big Picture daily to stay up to date on market direction and the leading stocks and sectors.

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

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