April 14, 2024

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Dow Jones Futures: Dovish Fed, Nvidia-led AI boom continue to lead stock market; 3 stocks near buy points

Dow Jones Futures: Dovish Fed, Nvidia-led AI boom continue to lead stock market;  3 stocks near buy points

Dow Jones futures will open on Sunday evening, along with S&P 500 futures and Nasdaq futures, after the major indexes posted strong weekly gains, reaching all-time highs.




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Sometimes, the stock market is fairly simple. There are two main factors that have driven the market higher since the end of October: expectations of federal interest rate cuts and the ongoing artificial intelligence boom.

Last week, the Fed reaffirmed its expectations to cut interest rates three times in 2024. At the same time, Nvidia (NVDA), Broadcom (Afgo) And Microsoft (MSFT) had optimistic AI events, while Micron technology (Mo) posted a surprise profit and strong trend thanks to AI tailwinds.

Nvidia, Broadcom and Micron stocks posted big weekly gains, along with a number of other AI plays. Microsoft stock has made modest gains to new highs, but remains playable.

But there was broad-based strength, with many sectors enjoying big gains while a variety of stocks triggered buy signals, including financial stocks.

Uber technologies (Uber), Eli Lilly (LLY), CrowdStrike Holdings (CRWD) are leading stocks that are set up in chaotic consolidations.

Investors can still capitalize on some actionable names with leveraged buys, perhaps looking beyond expanded AI leaders like Nvidia stock.

Nvidia and Uber stock is on IBD Leaderboard. Microsoft stock is on the IBD Long-Term Leaders list. Nvidia and CrowdStrike shares are in the mix right now Bahraini dinar 50. Shares of Broadcom, CrowdStrike, and Nvidia are in the market IBD Big Cap 20 existing. Uber was IBD's stock of the day on Friday.

Dow jones futures today

Dow Jones futures open at 6pm EST on Sunday, along with S&P 500 futures and Nasdaq 100 futures.

Remember, an overnight move in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.


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Stock market pool

The stock market rally had a strong week due to a dovish Fed and bullish AI prospects. Major indices rose strongly, all hitting record highs, despite retreating from Thursday's highs.

The Dow Jones Industrial Average rose 2% in stock market trading last week. The S&P 500 rose 2.3%. The Nasdaq Composite Index jumped 2.85%.

The Russell 2000 small-cap index rose 1.6%, reaching its highest closing level in 23 months on Thursday before falling on Friday.

The Nasdaq has cleared trading decisively since early February, while the Russell 2000 is back above the range from late December to the end of February. This means that a number of leading stocks broke out or are flashing other buy signals.

Meanwhile, the S&P 500 and Nasdaq have yet to extend from their 50-day line, although it wouldn't take much for that to happen.

Nvidia and other big-name AI stocks like Micron, Broadcom and Microsoft boosted the major indexes somewhat.

The 10-year Treasury yield fell 9 basis points to 4.22%, retreating after hitting near-2024 highs on Monday.

US crude oil futures rose five cents to $80.63 a barrel last week, retreating from their highest levels in 2024.

ETFs

Among the growth ETFs is the iShares Expanded Technology Software Sector ETF (IGV) by 2.9%, with Microsoft shares holding huge and CrowdStrike also in the IGV. VanEck Vectors Semiconductor ETF (Trait) rebounded by 4.5%. Nvidia is the dominant SMH stock, with Broadcom and Micron shares also as major members.

SPDR S&P Metals and Mining Fund (XME) by 2.5% last week. Global X US Infrastructure Development Foundation (ETF)cradle) emerged 3.2%. US Global Jets ETF (Planes) rose 3.4%. SPDR S&P Homebuilders ETF (XHB) jumped 4.8%. Energy Select SPDR ETF (XLE) by 0.9%, approaching the highest level in 52 weeks. SPDR Healthcare Sector Fund (Forty-fifth) rose higher. Selected Industrial Sector SPDR Fund (forty-first) advanced by 2.6%.

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Financial Select SPDR ETF (XLF) by 1.5% and the SPDR S&P Regional Banking Fund (ETF)Cree) rose 1.3%

Reflecting more speculative stocks, the ARK Innovation ETF (Ark) rose 1.5% last week and the ARK Genomics ETF (Arkj) fell just over 1%.


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Stocks near buy points

Uber stock has been consolidating for several weeks, which investors can treat as a de facto flat base with a buy point of 82.14. Shares jumped 5.5% to 80.23 this week, rebounding from a 10-week streak. Investors can use Thursday's high of 81.23 as a slightly early entry.

Eli Lilly stock also has a false flat base, with a buy point of 800.78. LLY stock found support at the 21-day moving average recently. Shares rose 2.1% to 770.30

CrowdStrike stock rose 3.8% to 327.58 last week, rebounding from a 10-week streak. The cybersecurity stock has traded tightly around the 21-day line, but with some huge exceptions. Shares fell on February 21 in reaction to high volume Palo Alto Networks (Bano) Heavy selling, but rebounded quickly. Shares again tested the 50-day line on March 5, just before earnings. Stocks rose on March 6 after the results, but pared gains. A move above the February 15 high at 338.45 could serve as an entry.


The hot buzzword for cybersecurity stocks isn't artificial intelligence anymore


AI shares

Nvidia stock jumped 7.34% to 942.89, its 11th consecutive weekly gain, hitting a record closing level on Friday. Late Monday, the leading AI chip company unveiled its latest AI processor. The Blackwell chip has much faster speeds but will be priced aggressively. Several analysts have raised NVDA stock price targets to 1,000 or more.

Broadcom stock rose 9.55% to 1,353.47, up from both its 50-day and 10-week lines. There may have been a brief opportunity to buy AVGO, but it's now extended. Broadcom prices rose at its artificial intelligence event on Wednesday.

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Micron stock rose 18.2% to 110.21, jumping to a record high. The memory chip giant reported surprising earnings and headed higher, citing growth related to artificial intelligence.

Microsoft shares rose 3% to 428.74, hitting a record level. Tech giant Dow unveiled its Surface AI computers and showcased Copilot jobs at its “New Era Of Work” event on Thursday. MSFT stock remains within a 420.83 buy point range from a not-quite-flat base. It's also within the 10-week line range.

What are you doing now

The market rally had a strong week amid major positive news, with a number of stocks from a variety of sectors showing buy signals.

Investors could have taken advantage of these opportunities, especially if they had recently reduced their exposure. But this is not the time to aggressively increase exposure. Make new purchases gradually, looking beyond a handful of AI names.

Don't buy extended stocks, even hot AI toys.

Definitely work on those watchlists for actionable stocks and setups. You want to find the best names possible beforehand and be ready to pounce when you run your entries.

Read The Big Picture every day to stay on top of market trend and leading stocks and sectors.

Please follow Ed Carson on topics at @edcarson1971 And X/Twitter at @IBD_ECarson.

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