Dow Jones Futures: Bitcoin Play PayPal In Buy Zone As Tesla, Nio, Xpeng Fly; Apple Stock Breaks Support


Dow Jones futures rose modestly late Monday, along with S&P 500 futures and Nasdaq futures, as President Donald Trump agreed to cooperate in the transition to Joe Biden.




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The stock market rally rose modestly Monday, amid fresh coronavirus vaccine news. Tesla stock, Nio (NIO), Xpeng Motors (XPEV), Li Auto (LI) and many other EV plays raced higher.

PayPal (PYPL) flashed early buy signals, as the digital payments stock has become the latest Bitcoin play — and player. CrowdStrike (CRWD), Twilio (TWLO) and Novocure (NVCR), which flashed similar buy signals late last week, continued to rally Monday after testing additional buy points.

Finally, Apple stock had a bad session, falling through its 50-day line, continuing to lose ground vs. the overall stock market rally. Apple (AAPL), which boasts a $1.936 trillion market cap, is a member of the Dow Jones, S&P 500 index and Nasdaq composite.

Early Tuesday, Best Buy (BBY), Anaplan (PLAN), Analog Devices (ADI), Dick’s Sporting Goods (DKS) and Burlington Stores (BURL) report earnings.

Tesla (TSLA), PayPal and Novocure stock are on IBD Leaderboard. Novocure, Tesla and CrowdStrike stock are on SwingTrader. PayPal stock is on IBD Long-Term Leaders.

Trump Cooperates With Biden Transition

The General Services Administration Monday night acknowledged that Joe Biden is the apparent winner of the 2020 presidential election. That step triggers a formal presidential transition. Biden and his aides will have access to agency officials, briefings and more, a well as some $6 million in funds.

President Trump said on Twitter that he believes that he’ll “prevail” in legal challenges to the 2020 election, but gave his blessing to GSA chief Emily Murphy to move ahead with the delayed transition.

“In the best interest of our Country, I am recommending that Emily and her team do what needs to be done with regard to initial protocols, and have told my team to do the same.”

The moves came as several GOP senators called for the presidential transition to begin. It also came after Michigan certified its election results, a key blow to Trump’s thin hopes of overturning the election outcome.

With a formal transition and Trump administration cooperation, President-elect Biden can hit the ground running after his term begins on Jan. 20. That includes continuing the likely rollout of coronavirus vaccines.


Why This IBD Tool Simplifies The Search For Top Stocks


Dow Jones Futures Today

Dow Jones futures were 0.6% above fair value. S&P 500 futures climbed 0.5%. Nasdaq 100 futures rose 0.4%.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.


Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live.


Coronavirus News

Coronavirus cases worldwide reached 59.50 million since the pandemic’s start. Covid-19 deaths topped 1.4 million.

Coronavirus cases in the U.S. have hit 12.77 million, with deaths above 263,000.

Early Monday, AstraZeneca (AZN) reported that its coronavirus vaccine was 62% or 90% effective, depending on the dosage. The AstraZeneca Covid vaccine, developed with Oxford, is far cheaper that the Pfizer (PFE) or Moderna (MRNA) vaccines, but those are roughly 95% effective.

In any cases, there is a strong chance that the Pfizer coronavirus vaccine will win FDA approval by mid-December, with the Moderna and AstraZeneca vaccines perhaps getting authorization before year-end.


Stock Of The Day Offers Multiple Entries As Pot Sector Shapes Up


Stock Market Rally Monday

The stock market rally had a broad but uneven rally, weighted toward real economy plays. President-elect Joe Biden named former Federal Reserve chief Janet Yellen to be his Treasury Secretary. That news appeared to push stocks higher as well.

The Dow Jones Industrial Average rose 1.1% in Monday’s stock market trading, as Boeing (BA), Chevron (CVX), Disney (DIS), JPMorgan Chase (JPM) and more offset weakness in Apple stock. The S&P 500 index climbed 0.6%. The Nasdaq composite edged up 0.2%. All the major indexes are near record highs. The small-cap Russell 2000 stepped up with a 1.85% gain to an all-time level.

The Russell 2000 and Dow Jones led as real economy sectors such as airlines, financials, energy and industrials rallied on the coronavirus vaccine news. Some pure-play stay-at-home stocks such as Zoom Video (ZM) retreated, while software was mixed.

But growth stocks overall did well.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) climbed 0.8%. The iShares Expanded Tech-Software Sector ETF (IGV) dipped 0.1%. The VanEck Vectors Semiconductor ETF (SMH) rose 1.5%, hitting a new high.

Tesla Stock, Nio, EV Sector On Fire

Tesla stock shot up 6.5% to 521.49, hitting a record high Monday after soaring 20% last week on news that it’ll join the S&P 500 index on Dec. 21. Shares are far extended from a 466 buy point.

Wedbush analyst Dan Ives raised his TSLA price target to $650 with a $1,000 bull case target. The Tesla price target hike largely came from Ives’ forecast for a booming electric-car market in 2021.

Nio Stock, EV Sector

The broader EV stock sector had a huge day.

Nio stock jumped more than 12% to a record high. Xpeng stock skyrocketed 34% and Li Auto 14.5%. Xpeng and Li Auto stock, both 2020 IPOs, hit record highs.

Electric-van startup Workhorse Group (WKHS) vaulted 12%. Electric-truck startup Lordstown Motors (RIDE), with Workhorse and General Motors (GM) as investors, leapt 8%. EV charging station maker Blink Charging (BLNK) spiked 48%, or 333% so far this month.

The electric-car market is expected to expand in 2021, though largely due to government policies pressuring traditional automakers to expand their EV offerings. EV supply is rapidly coming on line, especially in Europe, but will EV demand follow suit? The coming years could be a boom market for EV sales, but with cutthroat competition.

But, for now, electric-car stocks are racing at breakneck speed. Even if you think they should stop, or go into reverse, you don’t want to step in front of them.

Tesla, Nio and several EV stocks extended gains overnight.

PayPal Stock

PayPal stock rose 4.2% to 200.82, rebounding from its 50-day line and breaking a downward-sloping trend line. Both are buy signals. PYPL stock has another early entry at 205.02. At the end of this week, PayPal stock is likely to have a new base with an official buy point of 215.93.

Note that the relative strength line for PYPL stock has fallen significantly since its Oct. 21 peak, though that follows a long run. The RS line, the blue line in the charts provided, tracks a stock’s performance vs. the S&P 500 index.

PayPal is rallying as the digital payments leader has moved into Bitcoin transactions. Bitcoin prices have been soaring in the past several weeks. PayPal reportedly is accounting for a huge share of Bitcoin buys in the past few weeks, after rival Square (SQ) had dominated the cryptocurrency’s purchases.

Meanwhile, CrowdStrike rose 1.25%, Twilio stock 1.5% and Novocure 1.55%. Those all followed big gains last week, surging from 50-day/10-week lines and breaking downtrends. They also moved above a further resistance point, offering yet another buy point. On Monday, all three stocks initially fell, but all found support at that latest buy point in a bullish rebound.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Apple Stock

Apple stock fell 3% to 113.83, falling through its 50-day line and closing near session lows. The RS line has fallen since Sept. 1 to its lowest level since the end of July. After a strong run after the coronavirus crash, Apple stock may need to some time off.

The weakness in Apple stock and another megacap techs is masking the underlying strength in growth stocks. But it’s still unclear which sectors will lead the next leg of the stock market rally.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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Dow Jones Futures Fall As Cororonvirus Drives Stock Market Rally; Qualcomm Near Buy Point; Apple Looks Tired| Investor’s Business Daily


Dow Jones futures rose modestly Sunday night, along with S&P 500 futures and Nasdaq futures. The stock market rally has had a wild two weeks, with record coronavirus cases and upbeat Covid vaccine news swinging sectors back and forth. But in many ways, the market is back where it was, with many tight weekly closes and growth stocks back in favor.




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The Nasdaq composite has actually formed a three-weeks-tight pattern. So have Apple (AAPL) chipmakers Qorvo (QRVO) and Qualcomm (QCOM), along with marijuana stock Innovative Industrial Properties (IIPR).

Meanwhile, Apple stock, Microsoft (MSFT) and Amazon.com (AMZN) are looking tired. The megacaps were big winners during the coronavirus stock market rally from April-September. But lately they have struggled to keep pace with the broader indexes.

Microsoft stock is on IBD Leaderboard, while Apple is on the Leaderboard watchlist. MSFT stock also is on IBD Long-Term Leaders. Amazon stock and Innovative Industrial Properties are on the IBD 50.


Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live.


Dow Jones Futures Today

Dow Jones futures rose 0.3% vs. fair value. S&P 500 futures advanced 0.3%. Nasdaq 100 futures climbed 0.3%.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Coronavirus Cases

Coronavirus cases worldwide reached 58.98 million. Covid-19 deaths topped 1.39 million.

Coronavirus cases in the U.S. have hit 12.58 million, with deaths above 262,000.

The U.S. topped 200,000 cases for the first time on Friday. Hospitalizations are soaring, overloading many local hospital systems.

Los Angeles County suspended all in-person dining, including outside, as of Wednesday night. That follows a curfew for most of the state, including all of Southern California, from 10 p.m. to 5 a.m.

With states, counties and cities increasingly raising restrictions and social distancing increasing, the economic recovery could begin to stall out.

On Saturday, the FDA approved an Regeneron (REGN) antibody cocktail for treating coronavirus patients. President Trump received the Regeneron treatment when he had Covid-19.

Pfizer (PFE) and BioNTech (BNTX) filed for FDA approval of their coronavirus vaccine. Moderna (MRNA), which released strong interim data  on its Covid vaccine last Monday, will likely follow in days. An FDA advisory panel will meet in early December to discuss coronavirus vaccines, with FDA approval likely soon after.

The Pfizer coronavirus vaccine could win U.K. approval in less than a week, the Telegraph reported, citing government sources.

Stock Market Rally Last Week

U.S. Stock Market Today Overview

IndexSymbolPriceGain/Loss% Change
Dow Jones(0DJIA)29263.28-219.95-0.75
S&P 500(0S&P5)3557.65-24.22-0.68
Nasdaq(0NDQC )11854.97-49.75-0.42
Russell 2000 (IWM)177.47+0.16+0.09
IBD 50 (FFTY)38.34+0.13+0.34
Last Update: 4:06 PM ET 11/20/2020

The stock market rally had a mixed week for the major indexes. The Dow Jones Industrial Average fell 0.7% in last week’s stock market trading. The S&P 500 index retreated 0.8%. The Nasdaq composite edged up 0.2%.

Growth stocks fared well overall.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.9% last week. So did the iShares Expanded Tech-Software Sector ETF (IGV) and VanEck Vectors Semiconductor ETF (SMH). Microsoft stock is a major IGV holding.

Three-Weeks Tight

A three-weeks tight is when a stock ends the week within 1%-1.5% of the prior week’s close, for two straight weeks. The buy point is 10 cents above the high point of the tight pattern. It’s a chance for add-on buys, but also new positions if the tight pattern is close to a prior base.

Qorvo stock

Qorvo stock fell less than 0.2% last week to 147.39, following a 0.2% rise the prior week. The three-weeks-tight is just above a prior, messy consolidation, consolidating following a jump on earnings. The buy point is 154.53. However, 151.31, just above last week’s high, also could be an early entry.

The relative strength line for Qorvo stock is just below all-time highs. The RS line, which tracks a stock’s performance vs. the S&P 500 index, is the blue line in the charts provided.

Qualcomm Stock

Qualcomm stock rose 1.2% last week to 146.03, ending near weekly lows. That followed 0.5% decline in the prior week. The tight entry is 153.43, according to MarketSmith analysis. Like Qorvo stock, QCOM stock consolidated tightly following a strong gain on earnings.

Both Qualcomm and Qorvo are Apple chipmakers and 5G plays. With 5G wireless taking off and the new 5G iPhone just launched, both chipmakers are in sweet spots.

IIPR Stock

Innovative Industrial Properties stock surged on election results, with more states legalizing marijuana and Joe Biden the apparent winner of the presidential race. Last week, IIPR stock dipped 0.3% to 151.95 after edging up a few cents in the prior week. The buy point is 165.09.

Innovative Industrial Properties is a REIT that owns properties for growing marijuana.

Not-So-Young Growth Stocks

There comes a point in life where you may have a steady workout routine, staying relatively fit, better than most. But when you have do something really strenuous — playing a long, intense basketball game, helping someone move, etc. — you can still do it. However, now you feel the effects for days.

That’s what it can be like for Apple, Microsoft and Amazon stock. These megacaps went on strong runs in 2020, with Microsoft stock outperforming the S&P 500 for years. But at some point these megacaps have to take a rest.


These 5 Stocks Are Flashing Multiple Buy Signals


Apple Stock

Apple stock fell 1.6% last week to 117.34 after rising 0.5% in the prior week. Shares are still above their 50-day moving average. But in the post-election stock market rally, Apple stock hasn’t broken trend lines or other aggressive entries.

On the other hand, AAPL stock is that far away from clearing recent resistance with a 122.09 entry or at 125.49. The official buy point is 138.08.

The RS line for Apple stock went on a strong run from January 2019 and finally peaked on Sept. 1. Since then it’s been going sideways.

Microsoft Stock

Unlike Apple stock, Microsoft actually broke out briefly on Nov. 9, when the Pfizer coronavirus news came out, but then reversed lower to close just below its 50-day line on Nov. 10. Microsoft stock fell 2.8% last week, just below its 50-day line, after a 3.2% drop in the week prior.

Microsoft would seem to be well-positioned in the current volatile market, given its strong growth before and during the coronavirus pandemic.

But the RS line has been trending lower since early July, especially in the last two weeks. Long-Term Leaders like Microsoft can go through those stretches after long periods of outperformance.

Buying off the 50-day/10-week line can be a smart strategy for Long-Term Leaders, but investors might want to wait until MSFT stock clears very short-term resistance, with a 219.21 entry. A new handle has formed with a 228.22 buy point.

Amazon Stock

Amazon stock dipped 0.9% to 3,099.40 last week after a 5.5% tumble in the week before. Shares of the e-commerce and cloud giant have been below the 50-day line most of that stretch.

As with Microsoft stock, the RS line for AMZN stock has been falling since early July.

The official buy point is 3,552.35, though 3,496.34 would work. An early entry for Amazon stock could be 3366.90. An especially aggressive investor could draw a trend line from the latter two points to find an even-lower entry. But would you want to?

Stock Market Rotation

After a violent rotation out of stay-at-home stocks into “real economy” coronavirus vaccine stocks in the prior week, there was a general return to growth and even some pure Covid plays such as Zoom Video (ZM).

So, stock market rotation over? Maybe, but perhaps not for long.

Yes, investors are once again focusing on stay-at-home stocks with record coronavirus cases and restrictions intensifying. But if all goes according to plan, two coronavirus vaccines will be approved in just a few weeks, with perhaps two more by February. While vaccinations will take several months, at some point the pandemic will recede and the economy can fully recover.

As for real economy, coronavirus vaccine stock plays, Boeing (BA) closed well off highs, but still gained 6.7% last week. Fellow Dow Jones stocks Caterpillar (CAT) and JPMorgan Chase (JPM) edged higher after big gains in the prior week.

The ideal situation would be a broad-based stock market rally. Not only would that provide investors with more options to buy, but the market might be less-prone to big sector swings.

But, for now, the swing between stay-at-home stocks and coronavirus vaccine plays may continue for some time. Just as you don’t want to be overly concentrated in a particular group or sector, don’t be too weighted in one particular coronavirus investing theme.

Many stocks are doing great and are well extended. But aside from a few names like Qorvo and Qualcomm stock, there aren’t a lot of good setups right now. However, a few good days could bring more stocks into play, including Apple, Microsoft and even Amazon stock.

Read The Big Picture every day to stay 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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Stock Market Rally Rotation Over As Coronavirus Cases Soar? Qualcomm Near Buy Point; Apple Stock Looks Tired


The stock market rally has a wild two weeks, with record coronavirus cases and upbeat Covid vaccine news swinging sectors back and forth. But in many ways, the market is back where it was, with many tight weekly closes and growth stocks back in favor.




X



The Nasdaq composite has actually formed a three-weeks-tight pattern. So have Apple (AAPL) chipmakers Qorvo (QRVO) and Qualcomm (QCOM), along with marijuana stock Innovative Industrial Properties (IIPR).

Meanwhile,  Apple stock, Microsoft (MSFT) and Amazon.com (AMZN) are looking tired. The megacaps were big winners during the coronavirus stock market rally from April-September. But lately they have struggled to keep pace with the broader indexes.

Microsoft stock is on IBD Leaderboard, while Apple is on the Leaderboard watchlist. MSFT stock also is on IBD Long-Term Leaders. Amazon stock and Innovative Industrial Properties are on the IBD 50.


Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live.


Coronavirus Cases

Coronavirus cases worldwide reached 58.49 million. Covid-19 deaths topped 1.38 million.

Coronavirus cases in the U.S. have hit 12.45 million, with deaths above 261,000.

The U.S. topped 200,000 cases for the first time on Friday. Hospitalizations are soaring, overloading many local hospital systems. With states and cities increasingly raising restrictions and social distancing increasing, the economic recovery could begin to stall out.

On Saturday, the FDA approved an Regeneron (REGN) antibody cocktail for treating coronavirus patients. President Trump received the Regeneron treatment when he had Covid-19.

Pfizer (PFE) and BioNTech (BNTX) filed for FDA approval of their coronavirus vaccine. Moderna (MRNA), which released strong interim data  on its Covid vaccine last Monday, will likely follow in days. An FDA advisory panel will meet in early December to discuss coronavirus vaccines, with FDA approval likely soon after.

Stock Market Rally Last Week

U.S. Stock Market Today Overview

IndexSymbolPriceGain/Loss% Change
Dow Jones(0DJIA)29263.28-219.95-0.75
S&P 500(0S&P5)3557.65-24.22-0.68
Nasdaq(0NDQC )11854.97-49.75-0.42
Russell 2000 (IWM)177.47+0.16+0.09
IBD 50 (FFTY)38.34+0.13+0.34
Last Update: 4:06 PM ET 11/20/2020

The stock market rally had a mixed week for the major indexes. The Dow Jones Industrial Average fell 0.7% in last week’s stock market trading. The S&P 500 index retreated 0.8%. The Nasdaq composite edged up 0.2%.

Growth stocks fared well overall.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.9% last week. So did the iShares Expanded Tech-Software Sector ETF (IGV) and VanEck Vectors Semiconductor ETF (SMH). Microsoft stock is a major IGV holding.

Three-Weeks Tight

A three-weeks tight is when a stock ends the week within 1%-1.5% of the prior week’s close, for two straight weeks. The buy point is 10 cents above the high point of the tight pattern. It’s a chance for add-on buys, but also new positions if the tight pattern is close to a prior base.

Qorvo stock

Qorvo stock fell less than 0.2% last week to 147.39, following a 0.2% rise the prior week. The three-weeks-tight is just above a prior, messy consolidation, consolidating following a jump on earnings. The buy point is 154.53. However, 151.31, just above last week’s high, also could be an early entry.

The relative strength line for Qorvo stock is just below all-time highs. The RS line, which tracks a stock’s performance vs. the S&P 500 index, is the blue line in the charts provided.

Qualcomm Stock

Qualcomm stock rose 1.2% last week to 146.03, ending near weekly lows. That followed 0.5% decline in the prior week. The tight entry is 153.43, according to MarketSmith analysis. Like Qorvo stock, QCOM stock consolidated tightly following a strong gain on earnings.

Both Qualcomm and Qorvo are Apple chipmakers and 5G plays. With 5G wireless taking off and the new 5G iPhone just launched, both chipmakers are in sweet spots.

IIPR Stock

Innovative Industrial Properties stock surged on election results, with more states legalizing marijuana and Joe Biden the apparent winner of the presidential race. Last week, IIPR stock dipped 0.3% to 151.95 after edging up a few cents in the prior week. The buy point is 165.09.

Innovative Industrial Properties is a REIT that owns properties for growing marijuana.

Not-So-Young Growth Stocks

There comes a point in life where you may have a steady workout routine, staying relatively fit, better than most. But when you have do something really strenuous — playing a long, intense basketball game, helping someone move, etc. — you can still do it. However, now you feel the effects for days.

That’s what it can be like for Apple, Microsoft and Amazon stock. These megacaps went on strong runs in 2020, with Microsoft stock outperforming the S&P 500 for years. But at some point these megacaps have to take a rest.


These 5 Stocks Are Flashing Multiple Buy Signals


Apple Stock

Apple stock fell 1.6% last week to 117.34 after rising 0.5% in the prior week. Shares are still above their 50-day moving average. But in the post-election stock market rally, Apple stock hasn’t broken trend lines or other aggressive entries.

On the other hand, AAPL stock is that far away from clearing recent resistance with a 122.09 entry or at 125.49. The official buy point is 138.08.

The RS line for Apple stock went on a strong run from January 2019 and finally peaked on Sept. 1. Since then it’s been going sideways.

Microsoft Stock

Unlike Apple stock, Microsoft actually broke out briefly on Nov. 9, when the Pfizer coronavirus news came out, but then reversed lower to close just below its 50-day line on Nov. 10. Microsoft stock fell 2.8% last week, just below its 50-day line, after a 3.2% drop in the week prior.

Microsoft would seem to be well-positioned in the current volatile market, given its strong growth before and during the coronavirus pandemic.

But the RS line has been trending lower since early July, especially in the last two weeks. Long-Term Leaders like Microsoft can go through those stretches after long periods of outperformance.

Buying off the 50-day/10-week line can be a smart strategy for Long-Term Leaders, but investors might want to wait until MSFT stock clears very short-term resistance, with a 219.21 entry. A new handle has formed with a 228.22 buy point.

Amazon Stock

Amazon stock dipped 0.9% to 3,099.40 last week after a 5.5% tumble in the week before. Shares of the e-commerce and cloud giant have been below the 50-day line most of that stretch.

As with Microsoft stock, the RS line for AMZN stock has been falling since early July.

The official buy point is 3,552.35, though 3,496.34 would work. An early entry for Amazon stock could be 3366.90. An especially aggressive investor could draw a trend line from the latter two points to find an even-lower entry. But would you want to?

Stock Market Rotation

After a violent rotation out of stay-at-home stocks into “real economy” coronavirus vaccine stocks in the prior week, there was a general return to growth and even some pure Covid plays such as Zoom Video (ZM).

So, stock market rotation over? Maybe, but perhaps not for long.

Yes, investors are once again focusing on stay-at-home stocks with record coronavirus cases and restrictions intensifying. But if all goes according to plan, two coronavirus vaccines will be approved in just a few weeks, with perhaps two more by February. While vaccinations will take several months, at some point the pandemic will recede and the economy can fully recover.

As for real economy, coronavirus vaccine stock plays, Boeing (BA) closed well off highs, but still gained 6.7% last week. Fellow Dow Jones stocks Caterpillar (CAT) and JPMorgan Chase (JPM) edged higher after big gains in the prior week.

The ideal situation would be a broad-based stock market rally. Not only would that provide investors with more options to buy, but the market might be less-prone to big sector swings.

But, for now, the swing between stay-at-home stocks and coronavirus vaccine plays may continue for some time. Just as you don’t want to be overly concentrated in a particular group or sector, don’t be too weighted in one particular coronavirus investing theme.

Many stocks are doing great and are well extended. But aside from a few names like Qorvo and Qualcomm stock, there aren’t a lot of good setups right now. However, a few good days could bring more stocks into play, including Apple, Microsoft and even Amazon stock.

Read The Big Picture every day to stay 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.

YOU MAY ALSO LIKE:

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Want To Get Quick Profits And Avoid Big Losses? Try SwingTrader

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IBD Digital: Unlock IBD’s Premium Stock Lists, Tools And Analysis Today





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Nio Erases 8% Dive On Earnings; Tesla Surges Near Buy Point| Investor’s Business Daily


Dow Jones futures, along with Nasdaq 100 futures and S&P 500 futures, traded lower late Tuesday, as the stock market rally eyed record highs. Tesla surged to within striking distance of a new buy point, while Chinese rival Nio plunged as much as 8.9% on earnings late before erasing losses.




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The Dow Jones Industrial Average led major stock indexes lower Tuesday with a 0.6% decline, or 167 points. The S&P 500 fell 0.5%, while the tech-heavy Nasdaq composite moved down 0.2%. All three major stock indexes are close to reaching record highs.

Among the Dow Jones leaders, Apple (AAPL) fell 0.8%, while Microsoft (MSFT) slid 1.3%. Meanwhile, Salesforce.com (CRM) is once again approaching a new buy point amid Tuesday’s 2.5% advance.

IBD Stock Of The Day, Tesla (TSLA), surged 8.2% on its inclusion in the S&P 500 index. Chinese rival Nio (NIO) briefly dived more than 8% on earnings late before erasing losses.

Stocks in or near buy zones in the stock market rally are Chipotle Mexican Grill (CMG) and Facebook (FB).

Chipotle, Microsoft and Tesla are all IBD Leaderboard stocks. Meanwhile, Apple is on the IBD Leaderboard Watchlist.

Dow Jones Futures Today

Late Tuesday, Dow Jones futures fell 0.1% vs. fair value, while S&P 500 futures were down 0.2%. Nasdaq 100 futures lost 0.2% vs. fair value. Remember that trading in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Among exchange traded funds, Innovator IBD 50 (FFTY) fell less than 0.1% Tuesday. The Nasdaq 100-linked Invesco QQQ Trust (QQQ) ETF traded down 0.3%. Meanwhile, the SPDR S&P 500 ETF (SPY) lost 0.5%.

Amid the coronavirus stock market rally, the tech-heavy Nasdaq is up 32.6% for the year through Tuesday’s close. Meanwhile, the S&P 500 is up 11.7%, while the Dow is up 4.3% year to date, through the Nov. 17 close.

U.S. Stock Market Today Overview

IndexSymbolPriceGain/Loss% Change
Dow Jones(0DJIA)29783.75-166.69-0.56
S&P 500(0S&P5)3609.60-17.31-0.48
Nasdaq(0NDQC )11899.34-24.79-0.21
Russell 2000 (IWM)178.50+0.87+0.49
IBD 50 (FFTY)37.95-0.02-0.05
Last Update: 4:36 PM ET 11/17/2020

Coronavirus Updates

According to the Worldometer data tracker, the cumulative number of confirmed coronavirus cases in the U.S. topped 11.5 million on Tuesday. Total virus-related deaths rose past 252,000.

The cumulative total of worldwide Covid-19 cases confirmed since the start of the outbreak topped 55.5 million Tuesday, with more than 1.33 million virus-related deaths.

Coronavirus Stock Market Rally

According to IBD’s The Big Picture, the stock market is back in a new uptrend after a bullish follow-through day on Nov. 4.

Monday’s Big Picture commented, “IBD’s enterprise software industry group exemplifies how quickly the stock market has cooled on coronavirus plays. The group ranked in the top 15 for much of October, but is now No. 87 for six-month relative performance among 197 industries tracked by IBD.”


Stock Market ETF Strategy And How To Invest


Dow Jones Stocks: Salesforce’s New Buy Point

Last week, Dow Jones leader Salesforce.com briefly broke out past a 270.26 buy point in a double bottom pattern, according to MarketSmith chart analysis, but the stock quickly tumbled below its 50-day line.

Amid recent strength, the stock is back above its 50-day line and is approaching a 271.02 buy point in a double bottom with handle. Shares advanced 2.5% Tuesday.

Salesforce.com is the No. 2 performer on the Dow Jones Industrial Average with a 57.5% year-to-date advance through Tuesday’s close.

According to the IBD Stock Checkup, Salesforce.com stock has a 95 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.

Stocks In Or Near Buy Zones: Chipotle, Facebook

FANG stock leader Facebook is tracing a cup with handle with a 297.48 buy point, according to MarketSmith chart analysis. Shares are about 7% away from the new entry amid Tuesday’s 1.4% fall.

According to the IBD Stock Checkup, Facebook stock has a 98 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.

Burrito maker Chipotle is nearing a 1,366.76 buy point in a double bottom. Shares are about 8% away from the new entry, as they struggle to get back above their key 50-day line.

Both stocks are featured in this week’s Stocks Near A Buy Zone column.


IBD Live: A New Tool For Daily Stock Market Analysis


Nio Earnings

Chinese electric-car maker Nio topped third-quarter estimates and gave strong guidance late Tuesday. The company reported a loss of 12 cents a share on revenue of $666.6 million. Vehicle margin expanded to 14.5% from -6.8% a year ago and 9.7% in Q2. Available cash more than doubled from Q2 to $3.3 billion in Q3.

Wall Street expected the electric-SUV maker to lose 15 cents a share on revenue of $628 million.

Nio Stock

On Nov. 13, Nio advanced as much as 248% past a 15.55 buy point in a cup with handle and could be in the midst of a climax run. On that day, Nio rose to a peak of 54.20, gaining as much as 77% from the close of 30.58 in the week ended Oct. 30. Eighteen weeks have passed since the all-electric SUV and sedan maker broke out past 10 a share. The parabolic rise in recent weeks mirrors what is seen during a climax run.

Meanwhile, Nio stock rose as much as 355% above its long-term 200-day moving average, another potential signal the stock may be overheating.

Tesla Stock

Tesla stock surged more than 8% Tuesday on news it would be added to the S&P 500 index on Dec. 21. The IBD Leaderboard stock is rapidly approaching a 466 buy point in an awkward cup with handle.

According to IBD Leaderboard commentary, “The handle’s midpoint of 422.50 is slightly higher than the midpoint of the cup (416.19) itself. That’s good. One risk not to ignore: the new base is late stage, following advances from cup with handle bases and a high, tight flag that also counted as a base. So, the latest pattern has higher risk.”

Tesla was Tuesday’s IBD Stock Of The Day.

Dow Jones Leaders: Apple, Microsoft

Among the top Dow Jones stocks, Apple moved down 0.8% Tuesday, as shares continue their rebound from their 50-day line. Apple stock is tracing a new base with a 138.08 buy point. An early entry exists at 125.49.

The blue-chip giant is the No. 1-performing Dow Jones stock for 2020, with a 62.6% advance through Tuesday.

Software giant Microsoft moved down 1.3% Tuesday, snapping a two-day win streak. Shares are above their 50-day line, as they trade about 8% away from their all-time high.

Year to date, Microsoft is one of the top Dow Jones stocks, advancing 36% through the Nov. 17 close.

Stock Market Rally: What To Do Next

During the recent stock market correction, investors should have built watchlists of potential leaders. Now it’s time to put those watchlists to work.

Investors should use the current stock market strength as a go-ahead to buy new breakouts. Start slowly with new purchases and see how they perform. After raising cash during the recent correction, don’t rush to be fully invested all at once. Try some new buys. If they work, you can add to them; if not, you can back away.

In particular, focus on stocks with strong relative strength. Find them by using the relative strength line. The RS line measures a stock’s price performance vs. the S&P 500. If the stock is outperforming the broader market, then the RS line angles upward. If a stock is performing worse than the broad market, then the line will point lower.

Stocks to watch include IBD Long-Term Leaders, companies with stable earnings growth and price performance.

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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Actors Ryan Reynolds and Rob McElhenney buy lowly Welsh football club Wrexham, vow to make it a ‘global force’


Hollywood stars Ryan Reynolds and Rob McElhenney have bought one of the world’s oldest football teams and plan to document their first foray into the sport in a fly-on-the-wall TV show.

In a pinch-yourself moment for success-starved fans of Welsh club Wrexham, Reynolds and McElhenney completed a $US2.5 million ($3.42 million) takeover of a team that plays in the fifth tier of the English game.

“This is really happening,” Reynolds, a Canadian-born actor best known for starring in the Deadpool movies, said at the end of a short video announcing the purchase of the 156-year-old club.

In a recent call with members of the club’s supporters’ trust, Reynolds and McElhenney described Wrexham as a “sleeping giant” and outlined their vision to make the team a “global force”.

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“You may have never heard of Wrexham, the Racecourse Ground or (sponsor) Ifor Williams,” Reynolds said during Monday’s announcement.

Putting on a Welsh accent, he added: “But you will.”

To increase the exposure of a club which is languishing in 14th place in the National League and has been outside English soccer’s four main pro leagues since 2008, the new owners are ready to use Wrexham in a behind-the-scenes TV series similar to those which have documented Manchester City, Tottenham and Sunderland in recent years.

“That’s happened. We’re documenting it,” McElhenney, an American actor and director who was behind the TV show It’s Always Sunny in Philadelphia, told supporters.

“We should be thinking about Wrexham the way Man U (Manchester United) thinks about Man U. Engage in club, communities. What a great way to do it,” McElhenney said.

Wrexham’s home, the Racecourse Ground is not exactly Old Trafford — it has a capacity of 10,771.(Reuters: Phil Noble)

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Amazon Prime was among the first to reply to Wrexham’s takeover announcement on Twitter, sending its congratulations to the actors.

Wrexham, nicknamed the Red Dragons, has been a fan-owned club since 2011.

The club confirmed the RR McReynolds Company would take 100 per cent control — subject to confirmation by soccer authorities — following a vote among supporters.

The result was clear: 1,809 fans voted in favour and 26 against, with nine abstentions, giving Reynolds and McElhenney 98.6 per cent support.

“The Gang Buys A North Walian Football Club” read a tweet from Wrexham, a club from a town of about 65,000 people located near the north-west English border.

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Chris Jones, a member of the supporters’ trust, was on the recent call with Reynolds and McElhenney and said the actors knew all about the history of Wrexham — from the time in the 1970s when there were attendances of 20,000 spectators, to the 1990s when the team had some big wins in the FA Cup, including over then-English champion Arsenal at the Racecourse.

“They wanted a European club with potential, with history, one that was in a false position, but also one that was a huge part of the community,” Jones said.

“So they sent out advisors to find a club that fitted their criteria. And it’s us.”

Jones said the new owners had a British-style sense of humour and were humble in talking about their hopes and dreams for Wrexham, which include improving the stadium and the playing squad, and also bringing in an experienced CEO to run the club.

“This is the absolute dream,” Jones said.

Fans aren’t currently allowed to attend soccer matches in Britain amid the coronavirus pandemic, but Reynolds has said he wants to be at “as many games as I can make”.

“We want to have a pint with the fans,” he said, adding he and McElhenney’s intentions were to be “great ambassadors for the club” and to “introduce the club to the world”.

AP



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Bids to buy U.K. firms to get harder as ministers shut out ‘back door’ takeovers


U.K. business secretary Alok Sharma said the new bill will mean shutting out bidders “who could threaten the safety of the British people.”


tolga akmen/Agence France-Presse/Getty Images

The U.K. government plans to introduce sweeping new powers to prevent overseas companies from buying the country’s sensitive assets, amid growing concern about the impact of China’s growing economic power.

Under the National Security and Investment Bill, published on Wednesday, companies will have to notify the government about proposed deals in 17 sectors deemed of strategic importance. These include civil nuclear, communications, defense, energy, transport, and artificial intelligence.

Ministers will also have the power to scrutinize the acquisition of assets and intellectual property, as well as companies themselves.

Directors of
overseas companies that fail to alert the government could face personal fines
of up to £10 million, or their businesses could pay penalties worth up to 5% of
their annual turnover.

The new measures, which mark the biggest shake-up of U.K. takeover law in two decades, will also allow ministers to retrospectively stop acquisitions any time in the five years after the deal was concluded.

“Hostile actors should be in no doubt — there is no back door into the U.K.,” said Alok Sharma, business secretary, in a statement.

“This bill will mean that we can continue to welcome job-creating investment to our shores, while shutting out those who could threaten the safety of the British people,” he added.

Read: Terminating Takeovers: Governments Should Think Twice Before Pulling Up the Hatches

The government expects that around 1,000 deals will be flagged up each year. Of these, 70 to 95 are expected to be subject to a national security evaluation, with around 10 requiring “remedies.”

Kevin Ellis, chairman of PricewaterhouseCoopers, said that while the U.K.’s attractiveness for investment shouldn’t be underestimated, competition for foreign direct investment is getting “much fiercer.”

“Across all industries and markets the bar is being raised and we can’t rely on existing skills, historical relationships or legacy perceptions to drive future success,” Ellis said.

Read: Pressure grows for U.K. to intervene in Nvidia’s $40 billion Arm takeover

The proposals come amid escalating political concern over Chinese ownership of key sectors of the economy. The COVID-19 pandemic has also heightened fears that hard-hit companies could be easy prey to foreign investors looking to gain access to cutting-edge technology or firms linked to crucial infrastructure.

The U.K. government is currently assessing the impact of Nvidia
NVDA,
-1.18%
’s
$40 billion takeover of Arm, amid a growing backlash against the deal, as shareholders, politicians and industry experts raise concerns over national security, the loss of crucial homegrown technology, and key roles to a foreign buyer.

Read: U.K. plans to ban Huawei from 5G technology by 2027

In July, Prime Minister Boris Johnson reversed previous plans to allow Chinese telecoms equipment maker Huawei to supply kit for the country’s 5G mobile phone networks, following pressure from the Trump administration.

Ministers argue that the new powers would place the U.K. more in line with countries like the U.S., Australia and Italy that have all tightened their takeover rules in recent years, amid increasing concerns over the threat to national security from China and Russia.

The French government said in May also has plans to tighten restrictions on non-European investments in French companies, to limit foreign control over strategic sectors and technologies. The same month, Germany approved legislation to lower the threshold for reviewing and blocking foreign takeovers of strategically important companies.

Read: Wall Street banks net $64 billion in fees in bumper year for M&A and IPOs

Under the new U.K. measures, ministers will have 30 days to decide whether they want to “call in” a takeover or any other significant transaction, subjecting it to a national security review.

That could result in takeovers being blocked or a range of conditions being placed on deals.

Read: 2 significant times the U.K. government intervened in takeovers

The new legislation replaces the national security element of the 2002 Enterprise Act, which allows ministers to intervene in deals on competition grounds or if a deal has implications for national security, media plurality or financial stability. This applies only if a target company has a turnover of £70 million or where the merged business would have a market share of 25%.

The new bill has no minimum threshold for turnover or shares. 



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Why top analysts say buy stocks like Qualcomm & Humana


2011 Gain: $32.87 (60%) 2011 Closing price: $87.61 Last year, investors turned away from HMO stocks such as this, fearing the impact of a new health care overhaul rule involving medical-loss ratios. However, Humana showed it was able to manage the new regulation and in October delivered better-than-expected profits and a better-than-expected forecast for 2012. Stephen Weiss, partner at Short Hills Capital, “At eight times earnings, you’re owning a stock that’s still cheap and very, very defensiv

Photo: Humana.com

While it’s now becoming clear Joe Biden will take the White House, investors are betting that Congress will be split, leaving President Trump’s corporate tax policy unchanged.

“Up until about last week, the consensus belief was a full blue sweep — now that’s changing you’re seeing a repricing taking place in the market… a more status quo Senate may ease the burden of regulations on the tech sector,” Anna Han, an equity strategist at Wells Fargo Securities, commented.

That said, as many factors remain uncertain, finding stocks primed to outperform the broader market isn’t easy.

One approach is to look at the recent stock picks from analysts that consistently get it right. TipRanks analyst forecasting service attempts to identify Wall Street’s best-performing analysts, or the analysts with the highest success rate and average return per rating, tracked on a one-year basis.

Here are the best-performing analysts’ five favorite stocks right now:

Provention Bio

On November 2, biotech company Provention Bio revealed the rolling submission of the BLA for teplizumab, a therapy that could potentially delay or prevent clinical type 1 diabetes (T1D) in at-risk patients, had been completed. For Chardan analyst Gbola Amusa, this development reaffirms his confidence in PRVB, with the company remaining a “Top Pick for 2020.” To this end, he reiterated a Buy rating and $35 price target (169% upside potential) after the news broke.

The FDA has 60 days to review the final submission, and after this, if the application is acceptable for review, a PDUFA goal date will be set. It should be noted that the drug was granted Breakthrough Therapy Designation (BTD) in 2019, reducing the review time from 10 months to 6 months.

“We see scope for Provention to meet its prior guidance of a potential U.S. approval of teplizumab for the delay or prevention of T1D in at-risk individuals in mid-2021… Teplizumab is a potential breakthrough asset, with highly significant results in subjects ‘at-risk’ for end-stage T1D,” Amusa commented.

Looking at the Phase 2 “at-risk” study, even though it’s smaller in size, the data represents the “first demonstration of therapeutic modulation of disease progression in T1D, strongly supporting Provention’s approach to treating autoimmune disease in the early stages,” in Amusa’s opinion. In addition, the therapy was praised in an editorial published in the New England Journal of Medicine.

What’s more, Amusa estimates the at-risk population is a blockbuster opportunity just in the U.S. Based on information from the JDRF T1 Fund, there are over 300,000 stage 1-2 T1D patients in the U.S. and 2.3 million worldwide. “300,000 U.S. patients at a $60,000 one-time price for a course of treatment implies a $18 billion total market opportunity. A 60,000 per year transitioning population for each stage implies a $2.4 billion per year recurring total market opportunity,” he explained.

Taking the #99 spot on TipRanks’ ranking, Amusa is currently tracking a 31.8% average return per rating.

Fabrinet

Fabrinet has just received a thumbs up from Needham’s Alex Henderson, with this five-star analyst putting an $85 price target (29% upside potential) and a buy rating on the stock on November 3.

In the most recent quarter, the optical communications device company handily beat Henderson’s revenue and EPS estimates by 4.4% and 7%, respectively, and posted year-over-year growth of 9.4% and 22.9%, respectively. All of this was achieved despite an uncertain backdrop, with pressure on Huawei and Service Provider spending also reflected. Putting it simply, Henderson said, “These are good results.”

Henderson argues that investors have been waiting to see Huawei’s impact fall out of its numbers, and now that the “fourth quarter bridge has been crossed, the upside is all that remains.”

Cisco is moving a large portion of Systems products to Fabrinet, which could exceed $250 million annually, according to Henderson. However, he points out that the reported numbers only reflect a minor contribution from the Cisco transition, but this should really ramp in CYQ1 2021 and reach full run rate by June, with the first full quarter run rate expected in September.

The analyst further mentioned, “We think the scale of this additional business is generally not reflected in the outlook and Street estimates… It should add at least $50-$60 million to Revenues year-over-year. The Street estimates have CYQ3 Revenues at $454 million up $18 million. We think the Fabrinet without Cisco could hit this number. If the rest of FN was flat it would do $486-$496 million. That’s a lot of upside.”

TipRanks shows that the #153-rated analyst scores a 57% success rate and a 20.4% average return per rating.

LivePerson

Since CFO John Collins came on board, business messaging and communications software company LivePerson has placed a significant focus on implementing a data-driven approach across all aspects of the business, giving five-star analyst Ryan MacDonald, of Needham, “increased confidence in the improving trajectory of the business.”

Taking an even more bullish stance, on October 30, MacDonald increased the price target from $60 to $65, in addition to reiterating a Buy rating. The new price target puts the upside potential at 5%.

Based on the results from its third quarter, MacDonald argues the data-driven approach appears to be working. The company delivered a “Rule of 40 with a combination of 26% revenue growth and 18% free cash flow margin.” This marked LPSN’s first quarter of positive free cash flow since Q4 2018, with it highlighting “the progress the company is making on expense optimization while producing strong top line growth,” in the analyst’s opinion.

“LPSN is adamant that the pandemic-driven increases in usage are sustainable and indicative of a structural shift in the market… When combining this with the operational efficiencies that the company is implementing across the organization, we remain confident that LPSN can continue to accelerate growth and expand margins,” MacDonald commented.

Some investors expressed concern that new logos have yet to rebound. However, MacDonald believes there is a “strong near-term expansion opportunity in the existing base can support growth acceleration while new reps and channel partners ramp.” As a result, he is a buyer at current levels.

Given MacDonald’s 81% success rate and 40.4% average return per rating, he is among TipRanks’ Top 45 best-performing analysts.

Qualcomm

On November 4, Deutsche Bank’s Ross Seymore maintained a buy rating on Qualcomm following a beat and raise quarter for the semiconductor company. Reflecting an additional bullish signal, the five-star analyst boosted the stock price forecast from $127 to $150, implying upside potential of 16%.

Shares of Qualcomm surged over 11% in after-hours trading in response to the print. Looking at the details, it reported fiscal Q4 revenue of $6.5 billion, up 33% quarter-over-quarter. The analysts were expecting revenue of $5.9 billion. Non-GAAP EPS of $1.45 beat the Street’s $1.17 call. Although gross margin declined by 60 basis points quarter-over-quarter to 58.7%, it exceeded the 58.1% consensus estimate.

When it came to its guidance for the upcoming quarter, Qualcomm didn’t disappoint. Management expects revenue to be in the range of $7.8 billion-$8.6 billion, up 26.1% quarter-over-quarter at the $8.2 billion midpoint. This easily beat the $7.1 billion consensus estimate.

According to management, the ramp of 5G networks and handsets drove the strong performance, with Qualcomm’s CEO stating that the results included a “partial quarter impact” from a large handset producer in the U.S.

Based on this “strong beat/raise,” Seymore argues Qualcomm is the “premier way” to play the expansion set to take place in the 5G handset space over the next year.

As the analyst boasts an 82% success rate and a 28% average return per rating, Seymore is Wall Street’s 24th best-performing analyst.

Humana

Following Humana‘s strong Q3 performance, Oppenheimer’s Michael Wiederhorn continues to see the health insurance company as a compelling play in the space. Accordingly, the five-star analyst reiterated a buy rating and $460 price target (2% upside potential) on November 3.

For Q3, adjusted EPS came in at $3.08, well ahead of the $2.80 consensus estimate. Additionally, utilization bounced back to 95% of historical baseline levels by the end of the quarter, with non-coronavirus utilization expected to remain below normal levels in Q4.

Although HUM guided for a Q4 EPS loss of between $2.29-$2.54, this factors in its investments in the Medicare channel, with this area of the business reflecting a significant market opportunity, in Wiederhorn’s opinion. On top of this, given the potentially “more favorable reimbursement environment and the maturation of its high-growth member base,” HUM could drive an improvement in margins.

“Given the attractive growth of the company’s Medicare Advantage (MA) business, we believe Humana should return significant returns to shareholders,” Wiederhorn noted.

Management also mentioned that the recently issued 2022 proposed rate increase of 2.82% for MA will likely, “benefit the company similarly to the overall market,” adding that 92% of members are in 4+ Star plans.

With a 75% success rate and 21% average return per rating, Wiederhorn lands within the Top 30 on TipRanks’ list of best-performing analysts.

 

 

 

 



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