Dow Jones Futures: Market Rally Seeks Direction; Check out these 5 hot sector stocks

Dow Jones futures were little changed overnight, along with S&P 500 futures and Nasdaq futures. The stock market’s attempted rally struggled for direction Wednesday as Fed chief Jerome Powell spoke. Major indices shrugged off solid early losses but then gave up decent gains to close slightly lower.




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Fed chief Powell, speaking before the Senate Banking Committee on Wednesday, reaffirmed that the central bank is “firmly committed” to fighting inflation aggressively. But he gave mixed signals about the risks of recession.

Crude oil futures, copper prices and Treasury yields fell sharply on Wednesday, although they closed at their worst levels.

Healthcare names are among the most resilient sectors right now. bristol myers squibb (BMY), United Health (UNH), Eli Lilly (LLY), Vertex Pharmaceuticals (VRTX) Y Harmony Biosciences (HRMY) are in or near shopping areas. Everybody has lines of relative force in the heights

Meanwhile, the Tesla (TSLA) The Shanghai plant is reportedly shutting down once again, though this time ostensibly to upgrade equipment. Shares of Tesla fell below a key level after rallying on Tuesday.

China’s electric vehicle stocks have been rising strongly for several weeks. Start up li car (LI) rose modestly on Wednesday to near a record. Electric vehicle and battery giant BYD (BYDDF) has forged a handle on a daily chart.

The UNH stock and four other medical stocks here are all in the IBD 50, along with LI shares. Vertex, Eli Lilly and BMY stocks are also on the IBD large cap 20.

LLY shares are active IBD classification table Y Swing Trader. Bristol Myers Squibb was on Wednesday IBD Day Stock.

The video embedded in this article discussed Wednesday’s market action and analyzed the shares of UNH, Bristol Myers Squibb and Halozyme (AURA).

Dow Jones Futures Today

Dow Jones futures were flat against fair value. S&P 500 and Nasdaq 100 futures were lower.

Bitcoin traded just below $20,000 after dipping lower on Wednesday. Bitcoin price hit an 18-month low near $17,600 on Saturday.

Remember that the overnight action in dow futures and elsewhere does not necessarily translate to actual trading in the next regular stock Exchange session.

Fed chief Powell on recession risks

“At the Fed, we understand the difficulties that high inflation is causing,” Fed Chief Powell said in his prepared remarks. “We are strongly committed to reducing inflation and we are moving quickly to do so.”

Powell said the United States is “well positioned” to handle tighter Fed policy. He later said the risks of a recession “are not particularly high right now.” But he also said a soft economic landing is “significantly more challenging” now.

In recent months, Powell has buoyed Wall Street with comments downplaying recession risks, only for the stock to sell off next session. Investors may feel that you are not telling the whole truth or simply doubt your forecasts.


Join IBD Experts as They Discuss Actionable Actions in the Stock Market Rally on IBD Live


stock rally

The stock market rally opened solidly lower, soon recovered higher as Fed chief Powell testified, but then closed slightly lower.

The Dow Jones Industrial Average fell 0.15% in trading on Wednesday stock trading. The S&P 500 index fell 0.1%. The Nasdaq Composite gave up 0.15%. The small-cap Russell 2000 fell 0.2%

US crude prices fell 3% to $106.19 a barrel, but after falling more than 6% at one point.

The 10-year Treasury yield fell 15 basis points to 3.16%, but rebounded from the 21-day moving average.

Between best ETFsthe Innovator IBD 50 ETF (FFTY) tumbled just over 4%, reflecting losses in energy and commodity stocks. The Innovator IBD Breakout Opportunities ETF (COMBAT) fell 1.7%. The iShares Extended Technology Software Sector ETF (VAT) rose 0.2%. The VanEck Vector Semiconductor ETF (SMH) fell 1.2%.

SPDR S&P Metals & Mining ETF (XME) plunged 3.8% and the Global X US Infrastructure Development ETF (TO PAVE) fell 0.6%. US Global Jets ETF (JETS) rose 0.5%. SPDR S&P Home Builders ETF (XHB) rose 0.7%. The Energy Select SPDR ETF (XLE) lost 4% and the Financial Select SPDR ETF (XLF) submerged 0.2%. The SPDR Fund of the Select Sector of Health Care (XLV), with UNH shares a big component along with Eli Lilly, Bristol Myers and Vertex, added 1.4%.

Mirroring more speculative historical stocks, ARK Innovation ETF (ARKK) rose 1.5% and ARK Genomics ETF (ARKG) 2.85%. TSLA shares are a major holding in Ark Invest ETFs.


Five best Chinese stocks to watch now


actions to watch

Shares of VRTX advanced 0.8% to 272.31, breaking a trend line for an early entry, with 279.23 another aggressive buying area. The official point of purchase it is 292.85.

Shares of LLY gained 3.1% to 306.69, bouncing off the 50-day line on above-average volume as they closed just inside a short trend line. Investors could buy shares here or use Wednesday’s high of 309.65 as an aggressive entry. Eli Lilly shares are working on a new consolidation.

HRMY shares rose 4.6% to 47.82, topping 47.21 cup with handle point of purchase, according to MarketSmith Analysis. However, the volume was well below normal.

Shares of UnitedHealth gained nearly 2% to 489.68 on Wednesday, after Tuesday’s 6.25% rise. UNH shares are still in the range of a descending trend line. But investors might see consolidation as a double bottom base with a buy point of 507.35.

Shares of Bristol Myers rose 0.1% to 76.55 after retracing their 50-day line on Tuesday. Arguably, BMY stock is showing an early entry. The drug giant is on its way to having a flat bottom after this week with a buy point of 78.71. But investors could see BMY stock as being on a messy flat base going back to early April.

tesla shanghai

Tesla’s plant in Shanghai will suspend production for a couple of weeks in early July, Reuters reported on Wednesday. That will allow Tesla to upgrade equipment and perhaps ultimately increase the plant’s production capacity. In the short term, it will hamper Tesla’s efforts to recover to record production levels, although the Berlin and Austin plants should slowly gain momentum.

From March 28 to April 18, Tesla Shanghai was closed due to strict city lockdown. From April 19 to early June, the plant was operating at partial capacity. That is likely to cut second-quarter global production by more than 50,000. Tesla will release second-quarter production and delivery figures in early July.

Meanwhile, Morgan Stanley cut its TSLA share price target to 1,200 from 1,300, citing weaker deliveries and margins in the second quarter. He maintained a rating of overweight.

Shares of Tesla fell 0.4% to 708.26, just below its 21-day moving average after rising 9.35% on Tuesday. TSLA shares have some distance to reach their 50 and 200 day moving averages.

China Electric Vehicle Stocks

Li’s shares rose 2.9% to 36.80, just below December’s 52-week high of 37.45. Technically, the stock has a buy point of 37.55, but it has been rising for weeks and could use a long pause. Li Auto on Tuesday unveiled the L9, a new hybrid SUV that will begin delivery in August. It is more expensive than the current Li One hybrid.

BYD shares fell 0.9% to 38.30. On a daily chart, BYDDF now has a cup handle buy point of 39.81. The handle entry has already been there on a weekly chart. BYD will go on sale in Australia in the third quarter and begin shipments of the Seal, which has features similar to the Model 3 but for $10,000. BYD’s sales of electric vehicles and plug-in hybrids will easily exceed Tesla’s electric vehicle sales in the second quarter. The Chinese giant could soon supply batteries to Tesla, although the American electric vehicle giant has not confirmed this.


Tesla vs. BYD: Which booming EV giant is the best buy?


Market recovery analysis

After an encouraging rebound in the morning, it was a bit disappointing to see the major indices close lower on Wednesday. But a pullback came as no surprise after Tuesday’s big rally on light volume. Encouraging to see major indices recover from early losses to post modest gains.

Still, this is not a confirmed market rally. Wednesday marked the third day of a market rally attempt for the S&P 500 and Nasdaq composite, so investors may start looking for a follow-up day. The Dow Jones is only two days into its recovery attempt.

Even if there is a confirmed rally soon, skepticism would be in order. Several confirmed uptrends have quickly failed in the current bear market. And there is not much to buy.

Some pharmaceutical and medical stocks, such as Bristol Myers and UnitedHealth, are doing relatively well, but otherwise little profit.

Energy stocks weakened once again, while metals and mining stocks took a hit.

Much of Wednesday’s gains came from battered technologies.

Markets shift from focus on hot inflation to recession risks and vice versa


Time the market with IBD’s ETF market strategy


What to do now

Investors should wait for a follow-up day to exit the margin. At that point, investors could tiptoe back into the market, via some stocks or broad ETFs. But don’t rush into the market.

For now, stay committed to the market action and work on your watch lists. Focus on stocks with strong relative strength and trading above or near key moving averages. Few stock charts will look pretty in the current market environment.

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

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

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