Dow Jones futures were sharply lower late Monday, along with S&P 500 futures and Nasdaq futures, after President Trump’s comments, as civil unrest continued. Monday’s breakout stock Tesla headlines these six top stocks in or near buy zones in the coronavirus stock market rally.
The stock market rally ended Monday with solid gains amid rising U.S.-China tensions. Domino’s Pizza (DPZ), Netflix (NFLX), Snap (SNAP) and Tesla (TSLA) are in or near new buy zones. Dow Jones stock leader Apple (AAPL) also decisively cleared an add-on entry Monday, while chip leader Applied Materials (AMAT) is approaching a new buy point.
CrowdStrike ended Monday about 40% above a 67.66 entry in a deep cup base after a breakout on April 20.
Coronavirus stock Zoom Video surged 13.75% to new highs Monday. Shares are more than 91% above a 107.44 buy point in a cup base after three separate tests of their 50-day moving average line.
Dow Jones Futures Today: Trump Comments
Late Monday, Dow Jones futures fell 0.6% vs. fair value, while S&P 500 futures were also down about 0.6%. Nasdaq 100 futures moved 0.4% lower vs. fair value after the stock market close. Remember that overnight action in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Late Monday, President Trump promised an assertive response to the ongoing protests across the country. President Trump said, “I am mobilizing all federal and local resources, civilian and military, to protect the rights of law abiding Americans. If a city or state refuses to take the actions necessary to defend the life and property of their residents, then I will deploy the United States military and quickly solve the problem for them.”
Among exchange traded funds, Innovator IBD 50 (FFTY) gained 1.2% Monday. The ETF of top growth stocks is about 14% off its 52-week high.
On Monday, the Dow Jones Industrial Average rallied 91 points after falling more than 150 points at the stock market open. The S&P 500 rallied 0.4%, while the tech-heavy Nasdaq composite gained 0.7%.
Within the coronavirus stock market rally, the tech-heavy Nasdaq is once again positive for 2020, up 6.5% through Monday’s close. Meanwhile, the S&P 500 and Dow Jones Industrial Average are down 5.4% and 10.7%, respectively, through June 1.
Coronavirus News: Eli Lilly, Gilead Sciences
Eli Lilly (LLY) fell 0.3% despite an announcement the company would begin an early-stage trial to test its coronavirus drug treatment.
The stock found support at its 50-day line last week and is back above a 147.97 buy point in a consolidation base.
Gilead stock regained its 50-day line on Friday, but gave up that key support level Monday.
The coronavirus outbreak continues to spread across the U.S. According to the Worldometer data tracker, the cumulative number of confirmed U.S. cases topped 1.8 million. Despite the rising total, the daily number of new cases is trending lower amid the sharp increase in testing.
Confirmed Covid-19 cases worldwide climbed above 6.3 million, with about 376,000 virus-related deaths. With the daily number of new cases falling, investors in the U.S. are turning attention to the economic impact of the coronavirus outbreak and how fast the country reopens for business.
Coronavirus Stock Market Rally
According to IBD’s The Big Picture, the stock market uptrend remains strong after hitting lows nearly two months ago on March 23. The major stock indexes confirmed a new uptrend on April 2.
Per Friday’s The Big Picture, “Index performance aside, the stock market continues to behave well. Indexes have hardly broken stride from their spring rally, and leading stocks are doing their share. Growth was back in favor Friday: The IBD 50 added 2.7% and rose 1.8% for the week.”
Stocks to watch include the top stocks on IBD Long-Term Leaders. The IBD Long-Term Leaders list focuses on companies with stable earnings growth and price performance.
Stocks In Or Near Buy Zones
In the coronavirus stock market rally, six top stocks in or near buy zones include Apple, Applied Materials, Domino’s Pizza, Netflix, Snap and Tesla.
Among the top Dow Jones stocks, Apple decisively cleared a cup-with-handle’s 319.79 buy point, which offers an add-on entry. Shares gained 1.2% Monday to close at 321.85.
Shares are just 2% off their all-time high of 327.85, nearly completing a stunning recovery from the coronavirus stock market crash.
Monday’s IBD 50 Stocks To Watch pick, Applied Materials, is adding a handle to a cup base, making the new buy point 58.26. Shares are about 4% away from the correct entry.
According to the IBD Stock Checkup, AMAT stock shows a 94 out of a highest-possible 99 IBD Composite Rating, placing it in the upper echelon of growth stocks. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors easily gauge a stock’s strengths.
IBD Leaderboard stock Domino’s Pizza broke out past a 388.05 buy point in a new flat base, but failed to hold its gains. Shares closed down 0.6%. The 5% buy zone tops out at 407.45.
On the downside, the stock’s RS line remains relatively far from its previous highs. Ideally, the stock’s RS line should hit a new high on the breakout day or shortly thereafter.
FANG stock Netflix is trading above its 50-day moving average line after finding key support at that level on May 27. The recent test of support comes on the heels of a breakout above a 383.11 buy point in a cup with handle.
A key technical metric to watch is the stock’s lagging RS line. During the recent stock volatility, the Leaderboard member fell as much as 13.3% from its 52-week high in just six trading sessions, much worse than the broad market. Shares remain about 8% off their 52-week high.
Netflix is also an IBD 50 stock, ranking No. 10.
Social media stock Snap is barely past the 5% buy zone of an 18.56 buy point in a cup with handle, according to MarketSmith chart analysis. Snap stock gained 3.2% Monday and is a little over 5% above the buy point after Friday’s breakout move. Snap was featured in last week’s Stocks Near A Buy Zone column. The 5% buy zone tops out at 19.49, so the stock is barely extended.
Early Monday, Deutsche Bank lifted the stock’s price target from 18 to 24, while keeping its buy rating.
Tesla Breaks Out
Monday’s IBD Stock Of The Day Tesla raced 7.6% higher Monday, breaking out past an 869.92 buy point in a cup with handle. The 5% buy range goes up to 913.42. On Friday, the stock moved past an aggressive entry around 828.
Tesla is a new IBD Leaderboard stock. According to IBD Leaderboard commentary, “Tesla was up sharply Monday and was added to Leaderboard as a quarter position. Tesla topped an 869.92 handle buy point. It already had moved above a trend line traced above the handle of its base. Because it is an aggressive entry, only a one-fourth position was added. Tesla had been on the watchlist.”
Dow Jones Leaders: Intel, Microsoft
Dow Jones leader Intel stock once again gave up its 62.23 buy point in a cup with handle after Monday’s 1.7% decline, according to MarketSmith chart analysis. The 5% buy range goes up to 65.34.
Intel stock has a best-possible 99 IBD Composite Rating. The chip giant has been struggling to maintain its buy point after a May 20 breakout, but hasn’t triggered any sell signals.
Meanwhile, tech giant Microsoft moved down 0.2% Monday and is holding above a recent cup-with-handle’s 180.10 buy point amid a slow-going breakout. The buy zone runs up to 189.11. Microsoft is also an IBD Leaderboard stock idea and an IBD Long-Term Leader.
Shares also broke out on April 16 above a 175.10 correct buy point in a double bottom.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones futures.
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