Dow Jones futures were little changed ahead of Tuesday’s open. Nvidia and Tesla surged, giving the new stock market rally attempt a much-needed boost.
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This week, investors will be looking for further clues on monetary policy when Fed Chair Powell makes his annual speech at the Economic Symposium in Jackson Hole, Wyo., on Friday. A busy week of retail earnings reports — from Dick’s Sporting Goods (DKS), Kohl’s (KSS), Macy’s (M) and others — could update views on consumer spending amid the back-to-school shopping season.
Meanwhile, chip titan Nvidia (NVDA) soared 8.5% Monday after HSBC and KeyBanc upped their price targets ahead of the chip designer’s late-Wednesday earnings report. HSBC raised its price target from 600 to 780, while KeyBanc upped from 550 to 620. Rosenblatt last week hiked its target on the stock to 800.
Late Monday, Fabrinet (FN) and Zoom Video (ZM) reported their quarterly earnings results.
Fabrinet shares jumped 10.5% in extended trade, while Zoom stock rallied 5.5%.
Stock Market Today: Dow Jones Falls
On Monday, the Dow Jones Industrial Average fell 0.1%, while the S&P 500 gained 0.7%. The tech-heavy Nasdaq composite finished up 1.6%.
EV giant Tesla (TSLA) rallied 7.3% on Monday. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) finished higher in today’s stock market action, with AAPL stock up 0.8% and Microsoft shares rising 1.7%.
Costco Wholesale (COST), Lululemon (LULU), Arista Networks (ANET) and Oracle (ORCL) — as well as Dow Jones stocks Boeing (BA) and Visa (V) — are among the best stocks to watch in the ongoing stock market correction.
Tesla and Costco are IBD Leaderboard stocks, while Boeing was a recent IBD Stock Of The Day pick. Arista was featured in this Stocks Near A Buy Zone column.
Dow Jones Today: Oil Prices, Treasury Yields
Ahead of Tuesday’s opening bell, Dow Jones futures, S&P 500 futures and Nasdaq 100 futures were little changed vs. fair value. Remember that overnight action in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
On Monday, the 10-year U.S. Treasury yield ticked higher to 4.34%. Oil prices slipped nearly 1%, still near their 2023 highs. West Texas intermediate futures settled near $80 a barrel.
Stock Market Action: What To Do Now
Now is an important time to read IBD’s The Big Picture column, with the major stock indexes in a new stock market rally attempt.
One day after Thursday’s action led to a stock market correction, Friday kicked off the start of a new rally attempt. This is because IBD considers a down day closing in the upper half of its true range a pink rally day. We are recommending an exposure range of 20%-40% at this time.
Monday was Day 2 of the rally attempt, so a follow-through day could occur as soon as Wednesday.
But you can find many of the next uptrend’s leaders well before a follow-through happens.
One way to do this is by using the relative strength line. The RS line measures a stock’s price performance vs. the S&P 500. Look for stock charts in which the line is trending upward, which means the stock is outperforming the S&P.
The RS line is in all IBD charts and IBD MarketSmith. In addition, the IBD Stock Screener includes a list of top-rated stocks with lines at new highs. MarketSmith also has the “RS Blue Line Dot” list, which screens for RS lines at new highs.
Two useful MarketSmith lists to check once a follow-through happens are “Breaking Out Today” and “Near Pivot.” The latter shows stocks nearing buy points in bases, and the other flags stocks rising past buy points during the session.
Five Best Dow Jones Stocks To Buy And Watch Now
Dow Jones Stocks: Boeing, Visa
Aerospace giant Boeing broke out in recent weeks, topping a 223.91 flat-base entry. Shares are testing their buy point and 50-day line, as they added 0.25% Monday.
And Dow Jones payments leader Visa continues to hold in buy range past a 235.57 flat-base buy point, according to IBD MarketSmith pattern recognition. Shares are trying to find support around their 50-day line.
4 Top Growth Stocks To Watch In The Stock Market Correction
Stocks To Watch: Arista, Lululemon, Costco, Oracle
AI stock leader Arista Networks is testing its 178.36 buy point in a consolidation, and is in buy range after a July 31 breakout move. Its RS line is at its highest level since late March, which is a sign of big outperformance in recent weeks.
Lululemon has seen continued support around its 50-day line in recent weeks, even after a breakout past a 389.06 buy point sputtered. LULU’s RS line is at its highest level since May, according to IBD MarketSmith.
On the IBD Leaderboard, Costco was added as a half-size position in recent weeks. The megacap retailer is testing its 50-day support level. Meanwhile, a handle entry looms at 571.16.
Oracle continues to trace a flat base with a 127.54 buy point. An early entry at 118.06 is also in play, as the software leader tries to maintain support around the 50-day line.
Learn How To Time The Market With IBD’s ETF Market Strategy
Best Stocks To Watch In Stock Market Correction
These are four of the best stocks to buy and watch in today’s stock market, including a Dow Jones leader.
| Company | Symbol | Correct buy point | Type of buy point |
|---|---|---|---|
| Arista Networks | (ANET) | 178.36 | Consolidation |
| Visa | (V) | 235.57 | Flat base |
| SLB | (SLB) | 58.70 | Cup with handle |
| Costco | (COST) | 571.16 | Cup with handle |
Source: IBD Data As Of Aug. 21, 2023
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla Stock
IBD Leaderboard stock Tesla raced 7.3% higher Monday, snapping a six-day losing streak. Still, shares are sharply below their 50-day line. Amid the recent spate of selling, it’s clear that the stock requires more time to consolidate before a new entry emerges.
Early Monday, Baird analyst Ben Kallo outlined several catalysts for the stock in the second half of the year.
Kallo wrote Monday that vehicle price cuts and pressure on Tesla’s gross margins will continue to be the main story for the global EV giant. However, Kallo added that TSLA could be propelled higher by the Cybertruck launch — expected to be in Q3 — and other factors. Baird maintains an outperform rating on TSLA with a 300 price target, 30% above where shares are currently trading.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple stock climbed 0.8% Monday, adding to Friday’s gains. The stock remains squarely below the 50-day line following sharp losses in recent weeks.
Microsoft shares remain squarely below their 50-day line, a sign the stock needs more time to consolidate before a new buy point emerges.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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