Dow Jones futures were little changed overnight, along with S&P 500 futures and Nasdaq futures. First Solar headlined Tuesday night, with Nio and other Chinese electric car makers releasing key numbers early Wednesday. The TSLA stock sets up with Tesla’s investor day coming up on Wednesday evening.
The share price rise remains limited, with the major indexes down and fading towards the end again. A few leading stocks flashed buy signals, while others set up. But the uptrend is still under pressure with important resistance in the short term.
First Solar (FSLR), Axon Enterprise (AXON), Monster Drink (MNST), Duolingo (DUOL) and Tesla rival Rivian (RIVN) announced late Tuesday. FSLR shares, Axon and Duolingo may be actionable Wednesday, while Monster Beverage and RIVN shares pulled back in extended trade
early Wednesday, Nine (NIO) will release Q4 earnings, with Nio, Li Auto and XPeng (XPEV) also reports deliveries in February. Li Auto topped Q4 views early Monday and gave a bullish Q1 delivery forecast. China EV and battery giant BID (BYDDF) will release the February sale by Friday.
China EV registrations for the week ended February 26 showed BYD registrations picking up, but still well below the late-2022 pace. Nio, Li Auto and XPeng also showed an increase.
Tesla ( TSLA ) China’s EV registrations rebounded last week but missed forecasts, suggesting local sales may fall below Q4 levels despite big price cuts.
All eyes will turn to Tesla’s investor day event, with the big news starting on Wednesday’s market. Expect a new Tesla EV platform and confirmation of a planned Mexico factory. Elon Musk plans to unveil his “Master Plan 3” and may bring other news.
Tesla shares were down on Tuesday, but are setting the stage for a possible aggressive entry.
Dow Jones Futures today
Dow Jones futures rose relative to fair value. S&P 500 futures fell 0.1 percent. Nasdaq 100 futures fell 0.1 percent.
Nvidia (NVDA) solicited an offer for a $10 billion mixed securities shelf. NVDA stock fell slightly in extended trading.
The 10-year government yield rose 3 basis points to 3.94%.
Crude oil futures rose slightly.
The ISM manufacturing index for February will be released at 10 a.m. ET.
Keep in mind that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular session.
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FSLR shares rose 4% in extended action after First Solar reported a smaller-than-expected fourth-quarter loss, inline revenue and a bullish forecast. First Solar shares rose 1.8% on Tuesday to 169.14, rising from the 50-day line and breaking a trend line, offering an early entry aside from the earnings risk. FSLR stock has a buy point at 185.38 from a shallow consolidation.
AXON shares rose nearly 4% in late trading as Axon Enterprise earnings topped views. Shares of Taser and the body camera maker rose 2.7% to 200.31 on Tuesday. It is in the area from a buy point of 193.95. Investors can use 205.09 as an alternative entry.
MNST stock fell nearly 4% in overnight action as Monster Beverage earnings and sales fell short. Shares fell 0.55% on Tuesday to 101.76, just below the 50-day mark. Monster Beverage stock has a buy point of 104.75 from a 6% deep flat base, part of a base-on-base formation. Shares broke out on February 15, but immediately fell back. Celsius Holdings (CELH), Monster’s smaller but faster-growing rival, reports Wednesday evening.
DUOL stock jumped nearly 8% in overnight trading after Duolingo’s losses and revenue beat views, with active users surging. Duolingo shares rose 2% to 90.79, rebounding from the 200-day line and closing right on the 21-day line. DUOL stock could offer an early entry on Wednesday if it breaks the steep downtrend into a handle from a deep cup base. The official buy point is 105.56.
RIVN shares plunged 10% as Rivian reported a smaller-than-expected loss, but revenue fell short. The luxury electric car maker expects production to roughly double by 2023 to 50,000 cars, but that is subject to speculation. Rivian shares rose 4.6% to 19.30 on Tuesday, back above the 50-day mark but well below the 200-day.
Stock market rally
The stock rally tried to make progress on Tuesday, but faded in the afternoon.
The Dow Jones Industrial Average fell 0.7 percent in Tuesday’s trading. The S&P 500 index fell 0.3 percent. The Nasdaq composite fell 0.1 percent. The small-cap Russell 2000 closed just above break-even.
US crude oil prices rose 1.8% to $77.05 a barrel on Tuesday. Crude oil futures fell 2.1% in February, the fourth straight decline.
Copper prices rose 2.2% on Tuesday, but fell 3.1% for the month.
The 10-year Treasury yield was down 1 basis point to 3.91% after reaching 3.98% intraday. It is still up 58 basis points from the February 2 intraday low.
Among growth ETFs, the Innovator IBD 50 ETF ( FFTY ) fell 0.2%, while the Innovator IBD Breakout Opportunities ETF ( BOUT ) gained 0.2%. The iShares Expanded Tech-Software Sector ETF ( IGV ) rose 0.1%. VanEck Vectors Semiconductor ETF (SMH) was just above break-even.
The ARK Innovation ETF (ARKK) reflected stocks with more speculative stories, up 2.1%. ARK Genomics ETF (ARKG) was down 1.4%. The Tesla share is an important component across Ark Invest’s ETFs.
The SPDR S&P Metals & Mining ETF ( XME ) rose 1.9% and the Global X US Infrastructure Development ETF ( PAVE ) rose 0.4%. US Global Jets (JETS) rose 1.2%. SPDR S&P Homebuilders (XHB) rose 0.5%. The Energy Select SPDR ETF (XLE) fell 1.4% and the Financial Select SPDR ETF (XLF) climbed 0.2%. The Health Care Select Sector SPDR Fund ( XLV ) retreated 0.7%.
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Tesla’s investor day
Tesla’s investor day is on Wednesday, with the big news expected shortly after the market closes. Here are six big announcements investors are looking for, along with other possible news.
New EV platform: Tesla has said it will reveal details of a new EV platform, likely for a cheaper model to compete in China and Europe. But how much information will Tesla provide, and when will the new model arrive? Any cheap Tesla will already face countless rivals in China, especially from BYD.
Model 3 Upgrades: Tesla can confirm a long-rumored “Project Highland” Model 3 upgrade and say when production will begin.
New electric car plant: Mexico’s president said Tuesday that Tesla will build a plant in the country, near the border with Texas. Tesla may also discuss the planned expansion of the Nevada facility for 4680 battery protection and Tesla Semi assembly.
HW 4.0: Tesla can unveil its soon-to-launch updated hardware package for Tesla EVs’ driver assistance systems, with upgraded chips, more cameras and the return of radar. In 2016, Tesla said all of its electric cars were “hardware ready” for fully autonomous driving.
Artificial intelligence: Elon Musk tweeted on Tuesday that he wants to work on an “anti-woke” AI chatbot. Tesla is likely to push AI heavily, as companies rush to play up anything remotely related to AI.
Main plan 3: Elon Musk has hinted that he will release his third “Master Plan”, which lays out his Tesla vision for the coming years. His second master plan, published in 2016, is still largely a to-do list.
Tesla is also likely to discuss its expanding energy storage business. There is also some speculation that the EV giant will announce a buyback of TSLA shares.
Tesla shares fell 0.9% to 205.71 on Tuesday, after jumping 5.5% on Monday. Stocks arguably have a cup-with-handle pattern going back to early November (or a too-low handle in a base starting in September). This indicates a buy point of 217.75. But investors should probably wait for TSLA stock to clear its 200-day line, currently just above 221.
Tesla shares have doubled from their lowest market value of 0f 101.81 on 6 January. Much of that reflects Tesla’s investor day. So how much of the good news is priced in?
Market rally analysis
The stock rally had a relatively calm session, which once again disappeared towards the end.
The S&P 500 fell a fraction below its 50-day line after regaining that level on Monday. The 200-day line is not far below.
The Nasdaq Composite also turned slightly lower, trading above its 200-day and below its declining 21-day.
The Dow Jones, which has been a laggard in recent months, fell to a two-month low and the industry’s worst since early November.
The Russell 2000, looking better than the major indexes, hit resistance at its 21-day moving line for a second session in a row.
Some leading stocks flashed buy signals on Tuesday, including Booking Holdings (BKNG), Materials used (AMAT), Covers outdoors (TIRES) and Meta platforms (META).
But the market recovery is still under pressure.
The S&P 500 and Nasdaq need to hold their current levels and catch up to the 21-day lines along with the Russell 2000. The early February highs would be further resistance. But the 10-year Treasury yield and the US dollar are also hovering below key levels. If yields and the dollar move higher, stocks are likely to struggle.
The market may be in a holding pattern until investors get a fresh batch of Fed-critical economic data. The jobs report for February is not until March 10, with the CPI inflation report from February the following week.
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What to do now
The share rise is traded within a very narrow range. The major indexes faded from intraday highs for a second session in a row.
With the S&P 500 and Nasdaq below their 21-day lines and in danger of breaking several key levels, this is a time to be patient with a large cash position. Don’t get excited about a strong opening.
But if the market rally shows renewed strength, investors will want to be ready with their watch lists.
Arista Networks (A WEB), Alteryx (AYX) and United Airlines (UAL) are examples of stocks setting up, near official buy points or early entries. So is the Tesla stock.
Don’t overlook stocks that are showing relative strength, even if they don’t have a clear buy point yet.
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