The night brought a slight uptick in Dow Jones futures, accompanied by gains in S&P 500 futures and Nasdaq futures. An intriguing report surfaced, suggesting Tesla (TSLA) is gearing up for a Model Y overhaul by mid-2024.
Key Points:
- The stock market experienced modest gains on Tuesday, with the S&P 500 inching closer to all-time highs, driven by robust performance in small caps.
- While the festive spirit of a Santa Claus rally is in play, caution is advised for new investments before the year concludes. Notable stocks like Netflix (NFLX), Monday.com (MNDY), Microsoft (MSFT), and Datadog (DDOG) are holding firm in buy zones, with MongoDB (MDB) reclaiming a buy point.
- Tesla is reportedly set to revamp the Model Y, with plans for mass production at its Shanghai facility by mid-2024, according to sources.
- Stocks like DDOG, Tesla, and Microsoft feature on IBD Leaderboard, with Microsoft also making it to IBD Long-Term Leaders. Additionally, Datadog, MongoDB, and MNDY are part of the IBD 50, and Datadog holds a position in the IBD Big Cap 20.
Dow Jones Futures Today: Dow Jones futures witnessed a slight increase compared to fair value, while S&P 500 futures and Nasdaq 100 futures exhibited upward movement.
Note: Overnight market movements do not necessarily translate to actual trading trends in the subsequent regular stock market session.
Stock Market Rally: The recent stock market session witnessed positive outcomes, with small caps leading a widespread surge. The Dow Jones Industrial Average rose by 0.4%, the S&P 500 index gained 0.4%, and the Nasdaq composite advanced by 0.5%. Notably, the Russell 2000, representing small-cap stocks, recorded a substantial 1.2% jump.
While the Nasdaq and S&P 500 achieved fresh 52-week highs, recovering from the downturn on Wednesday, the market rally’s overbought status and the Nasdaq’s 8.1% position above its 50-day line suggest a possible pause or pullback. Investors might be holding off on selling stocks until January for tax-related reasons.
ETFs: Within growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) and VanEck Vectors Semiconductor ETF (SMH) demonstrated gains. Speculative story stocks, represented by ARK Innovation ETF (ARKK) and ARK Genomics ETF (ARKG), rallied, with Tesla still a major holding across Ark Invest’s ETFs.
Various sector-specific ETFs, including SPDR S&P Metals & Mining ETF (XME), SPDR S&P Homebuilders ETF (XHB), Energy Select SPDR ETF (XLE), and Health Care Select Sector SPDR Fund (XLV), displayed positive movements.
Stocks In Buy Zones:
- Netflix (NFLX) stock held above a 482.70 handle buy point.
- Microsoft (MSFT) stock continued to trade around the 21-day line, staying in range from a 366.78 cup-base buy point.
- Monday.com (MNDY) stock remained in range of a 185.81 handle buy point.
- Datadog (DDOG) stock traded tightly after clearing a 120.26 high-handle entry.
- MongoDB (MDB) stock rose, potentially forming a big handle on a weekly chart or starting a new consolidation.
Tesla Model Y Update: Tesla reportedly plans an upgrade for its Model Y crossover, with mass production expected to commence by mid-2024. The Shanghai facility’s phase 2 will pause production briefly during the Lunar New Year holiday for a partial upgrade.
Tesla stock, although technically having a 259.84 handle buy point on a weekly chart, is thin. Investors might prefer the 278.98 double-bottom buy point.
Navigating the Market: While the market rally appears robust, caution is advised due to potential signals of a pullback or pause, possibly triggered by tax-related selling in early January. It’s recommended to avoid aggressive new buys in the final trading week but stay significantly invested. Some stocks are showing signs of forming bases or presenting opportunities for new/additional buys.
