The Dow Jones Industrial Average rallied more than 225 points Wednesday, despite President Trump’s threat to veto the coronavirus stimulus deal. Apple stock is approaching a new buy point, while Tesla looked to snap back from early losses.
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Among the Dow Jones leaders, Apple (AAPL) slipped 0.5%, while Microsoft (MSFT) moved down 0.8% in today’s stock market.
Tesla (TSLA) looked to snap back from early losses with an over-1% rise Wednesday morning.
Stocks in or near buy zones in the current stock market rally are Chegg (CHGG), DraftKings (DKNG) and Qorvo (QRVO).
Apple, Microsoft and Tesla are IBD Leaderboard stocks. Chegg was Friday’s IBD Stock Of The Day, while Qorvo was Tuesday’s IBD Stock Of The Day. DraftKings was featured in this week’s Stocks Near A Buy Zone column.
Dow Jones Today: Trump Veto Threat
On Wednesday, the Dow Jones Industrial Average rose 0.7%, while the S&P 500 traded up 0.5%. The tech-heavy Nasdaq composite traded up less than 0.1% in midday trade.
Late Tuesday, President Donald Trump threatened to veto the stimulus bill. In a video posted on his Twitter, President Trump called the stimulus bill “a disgrace.” He called on Congress to increase the direct payment from a “ridiculously low” $600 to $2,000 per person, or $4,000 per couple. Trump demanded Congress “to send me a suitable bill, or else the next Administration will have to deliver a Covid relief package…”
If Trump does veto the bill, Congress could override the veto with a two-thirds majority in both the House and Senate. Late Monday, the Senate voted 92-6 to approve the bill. The package passed the House earlier Monday evening in a 359-53 vote.
Among exchange traded funds, Innovator IBD 50 (FFTY) fell 0.6% Wednesday. The Nasdaq 100-linked Invesco QQQ Trust ETF (QQQ) lost 0.2%. Meanwhile, the SPDR S&P 500 ETF (SPY) moved up 0.4%.
Amid the coronavirus stock market rally, the tech-heavy Nasdaq is up 42.7% for the year through Tuesday’s close. The S&P 500 is up 14.1%, while the DJIA is up 5.2% year to date.
Coronavirus Updates
According to the Worldometer data tracker, the cumulative number of confirmed coronavirus cases in the U.S. topped 18.6 million on Wednesday. Total virus-related deaths rose past 330,000.
The cumulative total of worldwide Covid-19 cases confirmed since the start of the outbreak topped 78.4 million Wednesday, with more than 1.72 million virus-related deaths.
Coronavirus Stock Market Rally
November was a key month for the stock market. IBD’s The Big Picture flagged a new uptrend following the market’s bullish follow-through day on Nov. 4. Meanwhile, December sees the stock market near record highs, with the Nasdaq at all-time records.
Tuesday’s Big Picture commented, “The iShares Russell 2000 (IWM) exchange traded fund tracks the popular index of companies with market caps generally less than $6 billion. It rallied 1% on Tuesday and etched a new all-time closing high. The Russell still has a shot to mark an eighth straight up week; over the prior seven weeks, it’s surged a total 28%.”
Investors should continue to use the stock market’s strength to buy breakouts. Be patient and wait for powerful breakouts instead of chasing extended stocks. If the new breakouts work, then add more exposure. But if breakouts start to fail, then 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: IBD Long-Term Leaders
Stocks to watch include IBD Long-Term Leaders, companies with stable earnings growth and price performance. Nice (NICE) and Intuit (INTU) are the two most recent additions to the list, on Dec. 4.
Nice is extended past a flat base’s 255.58 buy point following a Dec. 16 breakout. Intuit is out of the 5% buy zone above a 354.08 buy point in a cup with handle.
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Dow Jones Stocks To Watch: Apple
Apple stock is approaching a cup base’s 138.08 buy point, according to MarketSmith chart analysis. Shares slipped 0.5% Wednesday morning.
Apple shares are firmly above an aggressive entry at 125.49.
The blue chip giant is the No. 1-performing Dow Jones stock for 2020, with a 79.6% advance through Tuesday.
Stocks In Or Near Buy Zones: Chegg, DraftKings, Qorvo
Friday’s IBD Stock Of The Day, Chegg, broke out above a 90.09 buy point in a cup base Monday with a 3.55% advance. Shares lost 1% early Wednesday and are at the top of the 5% buy zone that goes up to 94.59.
IBD Leaderboard member DraftKings is looking to regain its 53.82 buy point in a cup with handle, but fell nearly 1% Wednesday. DraftKings stock is right below the entry, according to MarketSmith chart analysis.
Per Leaderboard commentary, “DraftKings is just below a cup with handle buy point. Volume was weak as shares topped the entry. It was a deeper than normal pattern, and it’s also a riskier third- or fourth-stage base.”
Tuesday’s IBD Stock Of The Day, Qorvo, is rapidly approaching a 171 buy point in a rare ascending base. Shares rallied over 2% Wednesday and are about 2% away from the new buy point.
According to IBD Stock Checkup, QRVO stock shows 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.
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Tesla Stock
IBD Leaderboard stock Tesla fell another 2% Wednesday morning before reversing more than 1% higher in morning trade. The stock looked to rebound from Tuesday’s 1.5% slide and is about 10% off its record high.
On Nov. 18, shares broke out above a 466 buy point in a cup with handle and are more than 35% from the buy point. On Dec. 18, Tesla stock hit a record high at 695, but has yet to see an up day since joining the S&P 500 on Dec. 21.
Dow Jones Leaders: Microsoft
Among the top Dow Jones stocks, software giant Microsoft moved down 0.8% Wednesday, as shares continue to move further above their key 50-day line. Shares are approaching a 228.22 buy point.
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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