by Dow Jones futures were little changed overnight, along with S&P 500 futures and Nasdaq futures. The stock market rally revived on Tuesday as the S&P 500 returned to the 4,000 mark.
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deer (DE) reports gains early Wednesday with DE stock in a buy zone. Deere’s earnings and guidance could be important for a variety of agriculture stocks, including CF industries (CF) and Archer Daniels Midland (ADM), as well as machine builders such as Caterpillar (CAT).
Energy stocks continue to perform well. solar guide Enphase Energy (ENPH), coal producer Peabody energy (BTU), refinery CVR Energy (CVI), natural gas producer EQT Corp. (EQT) and LNG inventory Excel Energy (EE) are all near buy points.
EE stock broke out on Wednesday and Enphase returned to a buy zone. BTU shares, CVR Energy and EQT are actionable.
ENPH stocks are on the IBD leaderboard. EQT shares are on SwingTrader. Deere stock is in the IBD 50. Peabody Energy is Tuesday’s IBD stock of the day.
Dow Jones futures today
Dow Jones futures were little changed from fair value. S&P 500 futures trended lower. Nasdaq 100 futures fell 0.2%.
The Reserve Bank of New Zealand hiked interest rates by a record 75 basis points, as expected.
The Fed’s November minutes will be released on Wednesday.
Keep in mind that overnight action in Dow futures and elsewhere doesn’t necessarily translate to actual trading in the next regular trading session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
stock market rally
The stock market rally started mixed on Tuesday but rallied for broad-based gains and closed near session highs.
The Dow Jones Industrial Average rose 1.2% in trading on Tuesday. The S&P 500 Index and the Nasdaq Composite both rose nearly 1.4%. Small-cap Russell 2000 rose 1.1%.
The 10-year government bond yield fell 7 basis points to 3.76%. But the two-year Treasury yield, which is more closely linked to Fed policy, was roughly flat at 4.53%.
The dollar, after recovering in the previous three sessions, fell back on Wednesday. The greenback has fallen significantly since the end of September, especially from the beginning of November.
US crude prices rose 1.1% to $80.95 a barrel, continuing the recovery from Monday’s short-lived plunge. Gasoline futures rose 4.3%, good news for refiners. Natural gas futures edged higher after falling more than 2% on the day.
ETFs
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) was up 3.4%, helped by a range of energy and metals stocks. The iShares Expanded Tech-Software Sector ETF (IGV) rose 1.8%. The VanEck Vectors Semiconductor ETF (SMH) is up 2.9%.
The SPDR S&P Metals & Mining ETF (XME) was up 3.2% and the Global X US Infrastructure Development ETF (PAVE) was up 1.3%. The SPDR S&P Homebuilders ETF (XHB) rallied 1.9%. The Energy Select SPDR ETF (XLE) is up 3.1%. The Health Care Select Sector SPDR Fund (XLV) edged up 0.9% to a seven-month high.
Reflecting stocks with more speculative stories, ARK Innovation (ARKK) gained 0.3% and ARK Genomics (ARKG) fell 0.4%.
The five best Chinese stocks to watch right now
Energy stocks near buy points
Enphase stock rose 4% to 320.44 and closed above a cup-with-henkel buy point of 316.97 for the first time. However, the last three times ENPH stock has hit these areas, it has reversed to the downside. Enphase stocks tend to have large daily swings. So, investors could check if ENPH stock is falling back to its rapidly rising 21-day moving average.
A few other LNG stocks are showing strength Flex LNG (FLNG) break out and Chen energy (LNG) recalls its 50-day moving average.
BTU stock rose 6.7% to 29.62, just below a handle buy point of 30.15 in a seven-month consolidation. Tuesday’s move broke the handle’s trendline and provided an early entry. However, BTU stock is 9.3% above its 21-day moving average and 17% above its 50-day moving average. The grip formed after strong gains by Peabody Energy.
CVR Energy shares are up 4.85% to 40.85, back above an old buy point of 39.81 that could still be considered valid. Also, CVI stock is exhibiting a 3-week tight pattern with an entry of 42.31. A move above 41.31 could offer early entry into this tight pattern.
EQT shares rose almost 6% to 43.79, breaking out again above the 50-day moving average after recovering from the 200-day moving average on Monday. Stocks break a downward sloping trend line. The official purchase point is 52.07.
EE stock is up 9.6% to 30 and surpassed a 28.49 cup-with-henkel buy point in above-average volume, according to MarketSmith analysis. The move to a record close cleared many trades that had taken place since Excelerate Energy’s IPO in April. EE shares had shown early entries on Friday and Monday, despite trading below normal on those days. Excelerate is now slightly extended from the buy zone and well extended from the 21-day moving average.
Analysis of the market rally
The stock market rally continues to show constructive action and is trading in a tight range after a modest pullback and support last week. On Tuesday, the major indices rebounded from Monday’s losses.
The S&P 500 rebounded from its 10-day moving straight to the 4,000 mark while approaching its 200-day moving average. While not above the Nov. 15 intraday high, it was the index’s best close in more than two months.
The 50-day line is only The S&P 500 starts to rise.
The Russell 2000 is approaching its 200th anniversary. The S&P MidCap 400, which held its 200-day moving average last week, continued to make gains.
The leading Dow Jones surged above 34,000 for the first time in three months, just below the Aug. 16 peak. Laggard Nasdaq found support at its 21-day moving average, just above its 50-day moving average, but failed to recoup all of Monday’s losses.
All of these indices are working on handles, with the Dow creeping above them. Most stocks follow the movement of the major indices, so many stock grips form near buy points. A slightly longer pause, perhaps until major economic reports later next week, would see the moving averages start catching up.
Time the market with IBD’s ETF market strategy
What now
Until the S&P 500 moves decisively above its 200-day moving average, investors might not want to gain much exposure right now. With the Thanksgiving holiday dampening trade and Fed-crucial economic data next week, the market rally could range in the near-term.
This could help stocks across a variety of sectors build grips and allow moving averages to gain ground. Investors should build their watch lists. It’s definitely time to look beyond traditional tech growth stocks, which are mostly lagging at the moment.
With many top performers deviating from moving averages like Excelerate Energy or BTU stocks, it’s even more important to look for early entries and act quickly.
Read The Big Picture every day to keep up to date with market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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