The Dow Jones Industrial Average rallied 150 points Monday, as President Joe Biden picked Jerome Powell as Fed Chairman for a second term. Meanwhile, Tesla stock rallied 3% early Monday after Chief Executive Elon Musk tweeted that the Model S Plaid could reach China “around March.”
Electric-vehicle leader Tesla (TSLA) gained almost 3% Monday. EV peer Rivian (RIVN) dropped about 7%, while Lucid Motors (LCID) was down about 4%. Chinese EV leaders Li Auto (LI) and Xpeng Motors (XPEV) are near buy points.
Alphabet, Microsoft and Tesla are IBD Leaderboard stocks. Xpeng Motors was featured in last week’s Stocks Near A Buy Zone story. Apple is an IBD SwingTrader stock and was Wednesday’s IBD Stock Of The Day.
Dow Jones Today: Fed Chief Pick
After the stock market open Monday, the Dow Jones Industrial Average rose 0.4%, while the S&P 500 gained 0.5%. The tech-heavy Nasdaq composite advanced 0.5% in morning trade.
Early Monday, President Joe Biden announced that he is re-nominating current Chairman Jerome Powell for a second term. Fed Governor Lael Brainard will be nominated as vice chairman.
Stock Market Rally
The stock market rally showed a mixed performance Friday, as the Nasdaq hit a new high. The S&P 500 reversed from new highs to post modest losses.
On Friday, The Big Picture commented, “The stock market’s performance was mostly positive Friday, as the Nasdaq finally got past resistance at the 16,000 level. The S&P 500, which continues to hit resistance near 4,700, closed with a minor loss. But the Dow and the small-cap Russell 2000 fell about 0.8% each.”
For daily stock market commentary, be sure to check out IBD’s The Big Picture.
Dow Jones Stocks To Buy And Watch: Apple, Nike
IBD SwingTrader stock Apple is at the top of the 5% buy range past a 153.27 buy point out of a cup with handle, according to IBD MarketSmith chart analysis, following six straight up days. The 5% buy zone tops out at 160.93. Shares added 1% Monday.
Dow Jones retail leader Nike bullishly regained its cup base’s 174.48 buy point amid Friday’s 2.1% rally. Shares rose 0.7% Monday and are in buy range.
Stocks On The Move: Nvidia
Chip giant Nvidia (NVDA) was set to hit more record highs Monday, rallying nearly 3% in morning trade. Shares are up more than 40% from a 230.53 buy point in a consolidation.
Zoom Video Earnings
A big 2020 stock market winner, Zoom Video Communications (ZM), will report after the close Monday. Analysts expect the company to earn $1.09 per share on sales of $1.018 billion, representing year-over-year increases of 10% and 31%, respectively.
Zoom stock closed Friday nearly 50% off its 52-week high and sharply below its long-term 200-day line. The stock is also below its 50-day moving average.
Stocks To Buy And Watch: Adobe, Alphabet, Amazon, Shopify
Adobe is nearly extended past a 659.29 buy point in a cup with handle following a Nov. 4 breakout move, as shares jumped 2.6% Friday. ADBE stock moved up about 1% Monday. Early Monday, Atlantic Equities upgraded Adobe from neutral to overweight, setting a price target of 820.
IBD Leaderboard stock Alphabet remains just above a 2,925.18 buy point in a flat base, according to IBD MarketSmith chart analysis, following Friday’s 0.6% loss. The 5% buy area runs up to 3,071.44. Shares were up 0.5% Monday. Leaderboard noted an additional buy point at 3,012.40 due to a new three-weeks-tight pattern.
Amazon remains above a 3,605.55 buy point in a cup with handle following Thursday’s breakout. Shares moved up 0.5% Monday, looking to bounce back from Friday’s 0.5% decline after a negative reversal. The IBD Stock Checkup shows that AMZN stock has a mild 83 out of a perfect 99 IBD Composite Rating.
The stock’s relative strength line is coming sharply off recent lows after November’s gains, but it is well below its July high. That indicates underperformance vs. the S&P 500 over a longer time frame. Ideally, the RS line should hit a new high on the breakout day or shortly thereafter to confirm the stock as a market leader.
EV Stocks: Li Auto, Xpeng, Lucid Motors, Rivian
Li Auto continues to build a cup with handle that shows a 34.93 buy point, but is falling further away from the entry. Shares rose more than 2% Monday, looking to bounce after three straight days of losses.
Xpeng Motors is about 2% below a 48.08 buy point in a choppy cup base following Friday’s nearly 1% decline. Shares gained about 3% Monday and are back above the recent buy point.
Hot initial public offering Rivian threatened to slide after Friday’s 4.2% bounce, moving down about 7% Monday after Ford Motor (F) and Rivian decided to back away from a pact to build a specific electric vehicle.
RIVN shares closed Friday about 28% off their post-IPO highs. Remember that investors should be disciplined about buying new issues by waiting for an IPO base to form before considering a purchase. The recent weakness could be the start of its first base formation, but last week’s price action was not constructive given the huge downside reversal and high volatility.
Tesla stock rallied nearly 3% Monday, looking to add to Friday’s 3.7% gain and extend a win streak to five sessions. Early Monday, Tesla CEO Musk tweeted that the Model S Plaid — a 396-mile range luxury sedan that can reach top speeds of up to 200 miles per hour — could reach China “around March.”
Shares traded as high as 1,243.49 on Nov. 4, but the stock ended Friday about 9% off its 52-week high. TSLA shares remain sharply above a 764.55 buy point in a cup with handle, as well as earlier entries at 700.10 and 730. The chart also showed an alternate entry at 900.50.
Dow Jones Leaders: Microsoft
Among the top Dow Jones stocks, software giant Microsoft moved up 0.3% Monday.
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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