Dow Jones futures were slightly lower in extended trade after the Dow Jones Industrial Average rallied 254 points Monday. IBD Stock Of The Day Etsy (ETSY) and security leader Axon Enterprise (AXON), both which broke out today, are two of the 10 best stocks to buy and watch as the stock market rally continues.
Economic Data, Earnings Reports
On the economic front, data this week includes Tuesday’s preliminary January PMI for manufacturing and services from researcher Markit and, on Thursday, fourth-quarter GDP estimates from the Commerce Department as well as the Labor Department’s weekly jobless claims and December new homes sales numbers from the Census Bureau. Finally, inflation data will wrap up the week on Friday with the Commerce Department’s PCE price index.
Key earnings this week include Dow Jones members American Express (AXP), Boeing (BA), Chevron (CVX), IBM (IBM), Intel (INTC), Johnson & Johnson (JNJ), Microsoft (MSFT), Travelers (TRV), Verizon Communications (VZ) and Visa (V).
Stock Market Today
On Monday, the Dow Jones Industrial Average rallied 0.8%, and the S&P 500 climbed 1.2%. The tech-heavy Nasdaq composite jumped 2%. Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) moved up 2.2% and the SPDR S&P 500 (SPY) rose 1.2%.
Axon Enterprise, Etsy, IBD Leaderboard stock Fluor (FLR), recent IBD Stock Of The Day Medpace (MEDP), Monster Beverage (MNST) and Vertex Pharmaceuticals (VRTX) — as well as Dow Jones names Caterpillar (CAT), Chevron (CVX), JPMorgan Chase (JPM) and Visa (V) — are among the top stocks to buy and watch with the market extending its recent gains.
Dow Jones Futures Today: Oil Prices, Treasury Yields
Ahead of Tuesday’s opening bell, Dow Jones futures inched lower vs. fair value, and S&P 500 futures lost 0.1%. Tech-heavy Nasdaq 100 futures also fell 0.1% vs. fair value. Remember that overnight action in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
The 10-year U.S. Treasury yield rose to 3.52% Monday, rising for a third straight session. Still, the 10-year yield is looking to rebound after a three-week losing streak saw it hit its lowest level since mid-September.
U.S. oil prices erased solid gains Monday. West Texas Intermediate futures traded below $82 a barrel, near last week’s high price.
What To Do In The Ongoing Stock Market Rally
Now is an important time to read IBD’s The Big Picture column with the stock market trend in a “confirmed uptrend” amid strong gains in recent sessions.
With more encouraging action to kick off this week, it makes sense for investors to have 40% to 60% market exposure. But given the risky environment, be ready to reduce this to 20% to 40% if bears regain the upper hand.
Dow Jones Stocks To Buy And Watch: Caterpillar, Chevron, JPMorgan, Visa
Caterpillar moved back out of buy range above a flat base’s 239.95 buy point after Monday’s 1.2% gain. The 5% buy area goes up to 251.95.
Energy giant Chevron is rounding out the right side of a cup base with a 189.78 buy point, according to IBD MarketSmith pattern recognition. Keep an eye out for a handle to offer a lower entry. Chevron’s fourth-quarter earnings are due Friday.
Banking giant JPMorgan is about 1% below a 138.76 flat-base buy point following last week’s breakout attempt, according to IBD MarketSmith chart analysis. Shares rallied 1.6% Monday.
Payments leader Visa is trading in buy range above a 220.08 handle buy point in a long pattern. The 5% buy area goes up to 231.08. The company’s fiscal first-quarter results are due on Thursday.
Top Stocks To Buy And Watch: Axon, Etsy, Fluor, Medpace
Security leader Axon tried to break out past Monday past a 189.72 buy point in a cup with handle, but closed just below the entry. AXON stock shows a strong 97 IBD Composite Rating, per the IBD Stock Checkup. The rating helps investors easily identify top stocks to watch with strong fundamental and technical metrics.
Etsy broke out past a 137.01 buy point in a cup with handle, rallying 5.5% Monday and closing in the 5% buy area that goes up to 143.86.
IBD Leaderboard stock Fluor is trying to break out past a flat base’s 36.16 buy point, and are right at the entry following Monday’s 0.1% rise. If shares retake that entry, the 5% buy area tops out at 37.97.
Medpace is breaking out above a consolidation’s 235.82 buy point, ending in the buy zone that tops out at 247.61. In recent weeks, shares moved above an early entry at 220.09. The company’s earnings results are expected on Feb. 13.
Monster, Vertex Trace Flat Bases
Monster Beverage is squarely below its 50-day line after last week’s drop. Shares are tracing a flat base with a 104.75 buy point and are about 4% away from the entry.
Wednesday’s IBD Stock Of The Day, Vertex Pharmaceuticals, is approaching a 324.85 buy point in a flat base after bullishly retaking its 50-day line last week.
Tesla stock raced 7.7% higher Monday, closing at its highest level since Dec. 19. Despite their recent rebound, shares remain sharply below their 50- and 200-day lines. Tesla stock closed Monday about 63% off its 52-week high.
Tesla earnings are due out Wednesday after the close. The EV giant is expected to earn $1.15 a share on revenue of $24.6 billion.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rallied 2.35% Monday, decisively retaking their 50-day line, which they had been trading under since mid-December. The stock remains around 21% off its 52-week high. Apple will report its quarterly earnings on Feb. 2.
Microsoft stock advanced 1% Monday, finishing just above its 50-day line, where it found stout resistance last week. A more-decisive retake would be bullish for the stock’s prospects, even though shares remain 23% off their 52-week high. MSFT earnings are due out late Tuesday.
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