Dow Jones futures rose slightly overnight, along with S&P 500 futures and Nasdaq futures, heading into the Thanksgiving Day holiday.
The stock market rally was positive for a second straight session. Fed officials see slower rate hikes coming “soon,” according to Fed minutes from the November meeting released Wednesday afternoon.
The Nasdaq led, buoyed by a rebound Tesla (TSLA). The major indexes are all strong so far this holiday-shortened week. But a longer holiday for the market rally could be constructive.
Investors should be cautious about adding exposure given key technical resistance and notable economic reports ahead.
however, Dexcom (DXCM), UnitedHealth (UNH), Neurocrine Biosciences (NBIX), Medpace Holdings (MEDP) and Shockwave Medical ( SWAV ) are five health care stocks showing interesting action.
DXCM stock and Neurocrine Biosciences are on the IBD leaderboard, with MEDP stock on the leaderboard watchlist. NBIX stock and Medpace are on the IBD 50.
Dow Jones futures today
Dow Jones futures rose 0.1% against fair value. S&P 500 futures advanced 0.15% and Nasdaq 100 futures climbed 0.2%.
Stock exchanges will be closed Thursday for the Thanksgiving Day holiday. On Friday, US exchanges will close early at 1 PM ET. But other exchanges around the world will be open normally on Thursday and Friday.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
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Stock market meeting
The stock market rally had some wobbles Wednesday, but extended gains, led by technicals.
Initial jobless claims rose to a three-month high while continuing claims hit an eight-month best. S&P Global’s purchasing managers’ indexes for U.S. it. Manufacturing and services both signal contraction.
The Fed minutes reinforced expectations of a 50-basis point rate hike at the December 14 meeting. Markets still favor another half-point move in February, but there is a decent chance of a quarter-point hike.
The Dow Jones Industrial Average rose 0.3% in Wednesday’s stock market trading. The S&P 500 index climbed 0.6%, led by TSLA stock. The Nasdaq Composite popped 1%. The small cap Russell 2000 was up 0.1%.
Crude oil prices tumbled 3.7% to $77.94 a barrel. Natural gas futures jumped 7.2%.
The 10-year Treasury yield sank 5 basis points to 3.71%. The two-year Treasury yield, more closely tied to the Fed rate hike expectation, dipped below 4.5%.
The US it. Dollar fell significantly for a second straight session, back near recent lows.
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The iShares Expanded Tech-Software Sector ETF (IGV) climbed 1.5%. The VanEck Vectors Semiconductor ETF (SMH) gained 0.9%.
SPDR S&P Metals & Mining ETF (XME) is up 0.3%. US Global Jets ETF (JETS) was 0.1% higher. SPDR S&P Homebuilders ETF (XHB) climbed 0.5%. The Energy Select SPDR ETF (XLE) fell 1.1%. The Health Care Select Sector SPDR Fund ( XLV ) rose 0.4%. Dow Jones giant UNH stock is the top holding in XLV.
ARK Innovation ETF (ARKK) reflected more speculative history stocks, pop 2.9% and ARK Genomics ETF (ARKG) 0.9%. TSLA stock is a major holding across Ark Invest’s ETF
Tesla stock jumped 7.8% to 183.20 on Wednesday, rebounding from Tuesday’s bear market lows as Citigroup upgraded the EV giant from a sell to a hold. TSLA stock is still down 19.5% so far this month and is roughly halved in 2022.
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Stocks to watch
Dexcom stock advanced 1.7% to 112.92, finding support at the 21-day moving average. Dexcom stock has been pausing this month after gapping up on earnings on October 28. Dexcom stock arguably has a long handle with a 123.46 buy point from a seven-month consolidation. Investors could buy DXCM stock from an early entry off the 21-day line, perhaps using Tuesday’s high of 113.88 as a specific buy point.
Medpace stock fell 1.3% to 218.81 on Wednesday. Shares have consolidated near record highs since skyrocketing 38% on Oct. 25 after earnings. Since then, MEDP stock has been forged a messy handle on a deep, year-long cup base. While shares have had some big intraday swings, MEDP stock is currently on track to form a three-week tight pattern through Friday’s close. Investors may use the November 15 close of 226.57 as an early entry, above the scope of recent trading.
NBIX stock sank 1.5% to 118.97. Shares are consolidating near multi-year highs, extending from an October breakout. Despite a plunge to the 50-day line last week, Neurocrine stock has a three-week tight pattern that is on track to go for a fourth week. Technically, this has a 126.09 buy point, although investors may want to wait for some quieter action.
Shockwave stock is up 4.7% at 264.06 on Wednesday, back above its 21-day line but hitting resistance at the 50-day line. After a failed breakout in late October and a sharp sell-off that continued through earnings, SWAV stock has bounced back in the past week. A new base will take more time, but aggressive investors could use a strong move above the 50-day as an early entry.
UNH stock climbed 1.3% to 529.71, rebounding above its 50-day and 21-day lines after briefly undercutting its 200-day line last week. UnitedHealth stock has been an IBD long-term leader and still shares many characteristics. Investors can use a bounce off the 50-day line as an early entry or a long-term leader entry. UNH stock has to submit a new base after a breakout of a cup-and-scoop base quickly failed last month.
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Market rally analysis
The stock market rally added to Tuesday’s gains. The S&P 500 just topped its Nov. 15 intraday high and closed within 1% of its 200-day line.
The Russell 2000 came due to its 200-day line.
The Nasdaq added to Tuesday’s rebound from its 21-day moving average, although it is still below its Nov. 15 short-term high and well below its 200-day.
The Dow Jones came within 20 points of its August 16 intraday high.
The S&P 500 set above its 200-day line — which roughly coincides with a year-long declining-tops trendline — is a huge test for the market rally.
A series of economic data can move Fed rate expectations and thus the stock market. On Wednesday, November 30, the October JOLTS report will show job openings, with Fed chief Jerome Powell speaking later in the day. On Thursday, the PCE price index, the Fed’s favorite inflation measure, will be released, along with jobless claims and the ISM manufacturing index. The November jobs report is due on Friday, November 2.
Ideally, the market would move sideways for a few days, allowing at least the 21-day line to catch up, heading into the economic reports.
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What to do now
The market rally has shown some nice gains this week, with more stocks flashing buy signals in recent days. Investors may have added a little more exposure as a result.
But they may want to be cautious about making significant new purchases with the S&P 500 hovering below its 200-day line and so much Fed-critical economic right next week.
Also consider taking some partial profits in stocks that run up quickly. Stocks have made short-lived advances amid a choppy uptrend and sector rotation.
Still, investors should be working hard on their investing shopping lists, looking for setups and actionable names in a variety of sectors.
Read the big picture every day to be in sync with the 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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