Two Tailwinds Continue To Drive Rally; 3 Stocks Setting Up Again

Dow Jones futures will open Sunday night, along with S&P 500 futures and Nasdaq futures, after the major indexes posted strong weekly gains, hitting all-time highs.




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Sometimes the stock market is quite simple. Two broad factors have fueled the market rally since late October: expectations of Fed rate cuts and the ongoing rise of artificial intelligence.

Last week, the Federal Reserve reaffirmed its projections to cut rates three times in 2024. Meanwhile, NVIDIA (NVDA), Broadcom (AVGO) and microsoft (MSFT) had optimistic AI events, while Micron technology (IN) reported surprising earnings and strong guidance thanks to AI tailwinds.

Nvidia, Broadcom and Micron stocks had big weekly gains, along with a host of other AI plays. Microsoft stock made a modest gain to new highs, but is still actionable.

But there was broad-based strength, with many sectors enjoying big gains as a diverse group of stocks flashed buy signals, including financials.

Uber Technologies (UBER), Eli Lilly (LYLY), CrowdStrike Holdings (CRUD) are leading actions that are based on disorderly consolidations.

Investors can still take advantage of some actionable names through incremental purchases, perhaps looking beyond widespread AI leaders like Nvidia stock.

Nvidia and Uber shares are on the rise Classification of IBD. Microsoft Stock Is Hot Long-term IBD leaders. Nvidia and CrowdStrike shares are on the market. IBD 50. Broadcom, CrowdStrike and Nvidia shares are on the market. IBD large cap 20 list. Uber was on Friday IBD Actions of the Day.

Dow Jones Futures Today

Dow Jones futures open at 6 pm ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.

Remember that the night action in dow futures and elsewhere does not necessarily translate into actual operations in the next regular period. stock Exchange session.


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Stock market rally

The stock market rally had a strong week thanks to a dovish Fed and bullish AI outlook. Major indices rose strongly and all hit all-time highs, although they pulled back from Thursday's intraday highs.

The Dow Jones Industrial Average gained 2% in the past week trading in the stock market. The S&P 500 index rose 2.3%. The Nasdaq Composite rose 2.85%.

The small-cap Russell 2000 rose 1.6%, hitting a 23-month closing high on Thursday before retreating on Friday.

The Nasdaq decisively cleared trading dating back to early February, while the Russell 2000 is back above a range from late December to late February. That meant several leading stocks broke out or showed other buying signals.

Meanwhile, the S&P 500 and Nasdaq have not extended from the 50-day line, although it wouldn't take much for that to happen.

Nvidia and other big AI stocks like Micron, Broadcom and Microsoft boosted the major indexes a bit.

The 10-year Treasury yield fell 9 basis points to 4.22%, retreating after nearly hitting 2024 highs on Monday.

U.S. crude oil futures rose 5 cents to $80.63 a barrel last week, moving away from 2024 highs.

ETFs

Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (VAT) rebounded 2.9%, with Microsoft stock a big holding and CrowdStrike also on IGV. The VanEck Vectors Semiconductor ETF (SMH) rose 4.5%. Nvidia is SMH's dominant holding company, with Broadcom and Micron shares also key members.

SPDR S&P Metals & Mining ETF (XME) rose 2.5% last week. The Global X US Infrastructure Development ETF (TO PAVE) rose 3.2%. US Global Jets ETF (JETS) rose 3.4%. SPDR S&P Homebuilders ETF (XHB) jumped 4.8%. The Energy Select SPDR ETF (XLE) gained 0.9%, approaching a 52-week high. The Health Care Select Sector SPDR Fund (XLV) rose slightly. The SPDR Select Industrial Sector Fund (XLII) advanced 2.6%.

The Financial Select SPDR ETF (Four. Five) rose 1.5% and the SPDR S&P Regional Banking ETF (CREATE) rose 1.3%

Reflecting stocks with more speculative histories, ARK Innovation ETF (ARKK) rose 1.5% last week and the ARK Genomics ETF (ARKG) fell just over 1%.


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Stocks Near Buy Points

Uber stock has been consolidating for several weeks, which investors can treat as a de facto fact. flat base with a buy point of 82.14. Shares rose 5.5% to 80.23 this week, rebounding from the 10-week line. Investors could use Thursday's high of 81.23 as a slightly early entry.

The Eli Lilly stock also has a false flat bottom, with an 800.78 point of purchase. LLY stock has recently found support at the 21-day moving average. Shares rose 2.1% to 770.30

CrowdStrike shares gained 3.8% to 327.58 last week, bouncing off the 10-week line. Cybersecurity stocks have been trading closely around the 21-day line, but with a couple of big exceptions. Stocks fell on February 21 in reaction to the big Palo Alto Networks (PANW) liquidation, but recovered quickly. The stock retested the 50-day line on March 5, just before the earnings. Shares soared on March 6 following the results, but pared gains. A move above the February 15 high of 338.45 could serve as an entry.


The buzzword for cybersecurity stocks is no longer AI


AI Stocks

Nvidia shares rose 7.34% to 942.89, their 11th consecutive weekly gain, hitting a record close on Friday. On Monday night, the The leader in AI chips presented its latest AI processor. The Blackwell chip has much faster speeds but will be aggressively priced. Several other analysts raised their price targets on NVDA stock to 1,000 or higher.

Broadcom shares rose 9.55% to 1,353.47, roaring off their 50-day and 10-week lines. There may have been a brief opportunity to buy AVGO, but it has now expanded. Broadcom bounced back at its own AI event Wednesday.

Micron shares soared 18.2% to 110.21, hitting an all-time high. The memory chip giant reported a surprise profit and guided higher, citing AI-related growth.

Microsoft shares rose 3% to 428.74, hitting an all-time high. Tech giant Dow unveiled Surface AI PCs and showed off Copilot functionality at its "New Era of Work" event on Thursday. MSFT stock is still within range of a 420.83 buy point from a not-quite-flat base. It is also within the scope of the 10-week line.

What to do now

The market rally had a strong week with big positive news, with several stocks from a variety of sectors showing buy signs.

Investors could have taken advantage of those opportunities, especially if they had recently reduced their exposure. But now is not the time to aggressively increase exposure. Make new purchases incrementally, looking beyond a handful of AI names.

Don't buy extended stocks, even the hottest AI plays.

Definitely work on those watchlists for actionable actions and setups. You want to find the best possible names ahead of time and be ready to pounce when they activate their entries.

Read The panorama every day to stay in sync with market direction and major stocks and sectors.

Follow Ed Carson on Threads at @edcarson1971 and X/Twitter in @IBD_ECarson.

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