The Dow Jones Industrial Average reversed lower, as Tilray stock skyrocketed as much as 58%. Tesla skidded 5%. General Motors tumbled after a chip-shortage warning, while Twitter surged on strong earnings results. Nvidia is breaking out today.




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Among the Dow Jones leaders, Apple (AAPL) was down 1%, while Microsoft (MSFT) fell 0.3% in today’s stock market. Disney (DIS) is in buy range after Monday’s breakout move, while Nike (NKE) is approaching a new buy point after last week’s bullish move.

Tesla (TSLA) threatened to extend Tuesday’s 1.6% loss, falling more than 4% in morning trade. Tesla stock is near a new high.

General Motors (GM), Dow Jones member Coca-Cola (KO) and Twitter (TWTR) reported earnings ahead of the stock market open.

Palo Alto Networks (PANW) and Nvidia (NVDA) are among the top stocks in or near buy zones in Wednesday’s stock market action.

Apple, Microsoft and Tesla are IBD Leaderboard stocks. Nvidia was the IBD Stock Of The Day, while Palo Alto Networks was Tuesday’s IBD 50 Stocks To Watch pick. Meanwhile, Nike was featured in this week’s Stocks Near A Buy Zone.

Dow Jones Today

On Wednesday, the Dow Jones Industrial Average traded down 0.1%, while the S&P 500 moved down 0.2%. The tech-heavy Nasdaq composite remained down 0.4% in midday trade despite cutting losses.

Among exchange traded funds, Innovator IBD 50 (FFTY) traded down 1.7% Wednesday. Nasdaq 100 tracker Invesco QQQ Trust ETF (QQQ) fell 1.1%. Meanwhile, the SPDR S&P 500 ETF (SPY) moved down 0.6%.


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Is The Stock Market Rally Overheating?

Looking back at the current uptrend, November was a key month for the stock market. IBD’s The Big Picture flagged the new uptrend following the market’s bullish follow-through day on Nov. 4. Meanwhile, the start of February has the Dow Jones Industrial Average, Nasdaq and S&P 500 hitting record highs. But is the stock market rally overheating?

Tuesday’s Big Picture commented, “The Nasdaq composite claimed a technical milestone Tuesday, adding 0.1% on top of three straight days of gains and closing above 14,000 for the first time. But overall the market showed light, mixed action.”

Due to the recent strength, investors can shift back to an offense stance, with an understanding that there are still good reasons for caution. Look for stocks that are breaking out above new buy points, like Disney, Dropbox and Nvidia.

Focus on stocks that showed strong relative strength during the recent weakness. They could be some of the market’s leaders if the indexes are able to continue their record-setting ways.


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Dow Jones Stocks: Disney, Nike

Dow Jones stock Disney broke out Monday and is in buy range past a 183.50 buy point in a flat base, according to IBD MarketSmith chart analysis. The 5% buy area goes up to 192.68. Disney stock rose 1% Wednesday, and is about 4% above the entry.

Disney will report earnings after the close Thursday.

Elsewhere in the Dow 30, Nike is tracing a new flat base with a 148.05 buy point. The stock rose 0.3% Wednesday, on pace to snap a two-day losing streak.

Nike shares bullishly regained their 50-day moving average line in recent sessions.

Dow Jones Earnings: Coca-Cola

Dow Jones stock Coca-Cola reported mixed results early Wednesday, beating earnings targets, but missing revenue estimates. Shares climbed less than 1% in response.

The stock is tracing a flat base with a 55.03 buy point, but remains below its 50-day line.

Tilray Stock

Tilray (TLRY) skyrocketed as much as 58% Wednesday morning, adding to Tuesday’s nearly 41% surge. Shares are more than 400% from a 12.25 buy point in a cup base.

This week, Tilray reached a deal with Grow Pharma to import and distribute Tilray’s medical cannabis products into the U.K., available for patients by March. Patients can get a prescription via the National Health Service or private practice.

Stock Market Earnings: GM, Twitter

General Motors slid 6% Wednesday despite reporting strong Q4 earnings and sales results ahead of the stock market open. The company warned that a global chip shortage will hit profits.

GM stock is about 19% from a 46.81 buy point in a cup base after a Jan. 12 breakout.

Twitter stock surged 6% after beating the Street’s Q4 targets late Tuesday.

Shares broke out above a 56.21 buy point in recent sessions and are already extended past the entry.

Stocks To Watch: Palo Alto, Nvidia

Tuesday’s IBD 50 Stocks To Watch pick, Palo Alto Networks, is in buy range above a 375.10 buy point in a flat base. Shares rallied 0.2% Wednesday morning and are nearly extended.

The IBD 50 stock is expected to report its fiscal second-quarter 2021 earnings on Monday, Feb. 22, after the market closes.

According to IBD Stock CheckupPalo Alto stock boasts a 96 out of a perfect 99 IBD Composite Rating. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths.

IBD Leaderboard stock Nvidia is breaking out past a flat base’s 587.76 buy point. Shares are in buy range above the buy point and are above an early entry at 560.07. Investors could start with a small position at this alternative buy point and add more shares at the conventional entry.

According to Leaderboard commentary, “Nvidia cleared an alternative entry from its January highs. The stock continues to work on a flat base. Nvidia was cut to a quarter position Jan. 27 and raised back to a half position on Monday.”


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Tesla Stock

Tesla stock threatened to add to Tuesday’s losses falling more than 4% Wednesday morning. Shares are just 4% away from all-time highs.

The Jan. 8 IBD Stock Of The Day column signaled that Tesla was flashing several signs of a climax top amid a sharply vertical run over the past few weeks. But so far the stock is showing tremendous resilience after hitting record highs last week.

On Jan. 25, Tesla stock hit a record high at 900.40. Shares are about 83% above a 466 buy point in a cup with handle amid Monday’s action.

Dow Jones Leaders: Apple, Microsoft

Among the top Dow Jones stocks, Apple moved down 0.4% Wednesday, and remains below its 138.89 buy point in a cup with handle. Shares gave up the entry on Jan. 28.

Meanwhile, Microsoft fell 0.3% Wednesday morning, on pace to snap a three-day win streak. Shares of the software giant broke out past a 232.96 buy point in recent sessions. The stock is at the top of the 5% buy zone that goes up to 244.61.

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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