Dow Jones Today, Nasdaq Futures Rise: Tesla Climbs On China Sales; Apple Enters EV Battery Talks
Stock futures added to early gains heading into Tuesday’s open, as the Nasdaq looked to add a third day to its advance. Tesla stock rallied on strong electric vehicle sales data from China. Earnings news sent Marvell, Stitch Fix, Thor Industries and Rev Group sharply higher. And Boeing topped the Dow Jones today, after Southwest Airlines expanded its already substantial order for 737 Max jets.
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Nasdaq 100 futures gained 0.6%, and S&P 500 futures swung 0.2% above fair value. Tesla (TSLA) rose 2.5% in early trade, running high on both the Nasdaq and the S&P 500. Dow Jones futures shook off early declines and rose 0.4%.
Tesla (TSLA) and chip designer Marvell Technology (MRVL) led the Nasdaq 100, up 3.3% and 5.6%, respectively.
Tesla advanced after May sales data from the China Passenger Car Association showed the automaker leading a surge in electric vehicle sales in the country for May.
Marvell reported late Thursday a strong first-quarter performance, and raised its second-quarter guidance. The premarket gain suggested a starting bell breakout past a 49.31 buy point in a cup-with-handle base.
Other leaders in early motion included Moderna (MRNA), Applied Materials (AMAT), Generac Holdings (GNRC) and CrowdStrike (CRWD). Moderna, Generac and CrowdStrike are IBD 50 stocks. Applied Materials is on the IBD Leaderboard and SwingTrader lists.
The U.S. trade deficit narrowed sharply, but in line with estimates, in April, Commerce Department data showed, decreasing to $68.9 billion for the month. That was down from a record $75 billion trade gap in March, and just below economist projections for a tightening to $69 billion. The Labor Department’s Job Openings and Labor Turnover Survey is expected at 10 a.m. ET.
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Dow Jones Today: Apple, Boeing Lead
Boeing (BA) climbed 1.3%, and Apple (AAPL) stock traded up 0.7% on the Dow Jones today. Boeing gained after a regulatory filing from Southwest Air showed the company had added 34 737 Max jets to its confirmed orders for 2022. The supplemental agreement raises Southwest’s total 737 Max orders to 234 aircraft.
Boeing stock is in a 13-week cup base. It may be shaping a handle with a potential buy point at 258.50.
Reuters reported that Apple had entered early stage negotiations with China’s CATL and BYD (BYDDF), as the iPhone maker seeks a supplier of batteries for its planned electric vehicle.
BYD is a Warren Buffett-backed Chinese automaker. CATL is Contemporary Amperex Technology, which supplies electric vehicle batteries to Tesla and other major automakers. Reuters reports that CATL is the world’s largest maker of automotive batteries, and that BYD is fourth-largest.
Apple has not yet publicly announced its car plans, and declined to comment to Reuters. Apple stock ended Monday less than 9% below a flat base buy point at 137.17.
China EV Sales: Tesla, BYD, Li And Nio
The CPCA reported a 177% year-over-year surge in electric vehicle sales in May, to 185,000 units. Overall passenger vehicle sales rose 1.6%, to 1.66 million vehicles.
Tesla sold 33,463 cars during the month. That was a 29% increase vs. April levels, but still below March’s 35,478 tally. Also in May, the company exported 11,527 of the Model 3 sedans and Model Y sport-utility models it manufactures in China.
BYD saw sales of all-electric vehicles double during the month, to 18,711 units. That was 126% over year-ago levels. China-based competitor Nio (NIO) sold 6,711 EVs, a 95% increase.
Xpeng (XPEV) deliveries leapt 483% year over year to 5,686 EVs in May, and 10% from April. Li Auto (LI) reported May deliveries of 4,323, up 101% from the same period last year, but down 22% from April. BYD sold 32,800 New Energy Vehicles, the category that includes hybrids, up almost 190%.
A two-day advance has left Tesla stock tight against the underside of its 200-day moving average. Shares have been working to take and hold support at that 200-day level since mid-May. At the end of trade Monday, Tesla was about 33% below its record high, set on Jan. 25.
Li Auto shares have rebounded sharply from mid-May lows, recovering to an 18% gain in May and up more than 14% since the start of June. That leaves the stock 132% above its July 2020 initial offering price, but still down 44% from its November peak, and with no valid buy point in sight.
Shares of Xpeng, BYD and Nio are all recovered back above support at their 40-week moving averages after four-week climbs. Nio could arguably be in a buy range, above a 43.32 buy point in a bottoming base pattern.
Earnings News: Stitch Fix, Rev Group
Online shopping assistant Stitch Fix (SFIX) rocketed more than 12% higher. The San Francisco-based outfit’s fiscal third-quarter results trounced analyst projections. Shares are working on a fifth-straight weekly advance, but ended Monday more than 75% below its January high.
E-commerce retail and delivery site Dada Nexus (DADA) sparked up 12% after announcing a $150 million share buyback program along with its first-quarter earnings.
Rev Group (REVG) rallied 7.5% after reporting its results. The maker of recreational vehicles and fire trucks ended trade on Monday about 14% below a 22.33 buy point in a seven-week cup base.
RV maker Thor Industries (THO) rallied 3.6% after reporting a 665% gain in per-share earnings and a 106% rise in revenue. Shares are working to fashion a floor in a steep five-week decline.
IBD 50: Global-E Rally
Among IBD 50 stocks, Israel’s Global-E Online (GLBE) set up to continue its rally, up 4.1% in early action. More than a half-dozen analysts initiated coverage with buy, outperform and overweight ratings on Monday, following the e-commerce platform provider’s first-quarter report late last week, and citing its recent exclusive agreement with Shopify (SHOP).
Global-E shares ended Monday up 55% from their May 12 initial offering price. Investors will reduce risk by waiting for the volatile new issue to form an IPO base, offering a valid entry point to the stock.
PLBY Group (PLBY) tumbled almost 9%, to the bottom of the IBD 50 list. The company announced late Monday an offering of 4 million shares of common stock.
Dow Jones Today Lags; Nasdaq’s 14,000 Test
The stock market on Friday had its status upgraded to “uptrend resumes” for the first time since May 12. The Nasdaq Composite capped a wobbly, three-week rally by punching back above support at its converged 50-day and 21-day moving averages on Friday, and adding to that cushion of support on Monday.
The index is less than 1% below the 14,000 mark, the level which has capped the its progress since February.
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The S&P 500 remains within 0.3% of its record high from May 7. The Dow Jones today sits about 1.3% below its May 10 record high. Both the Dow and the S&P 500 continue to show firm support at their short-term 21-day moving averages.
The upshifted market status opens investors to a more aggressive game plan. That means it’s time to start rotating back out of cash and into fundamentally strong stocks and ETFs coming out of sound chart patterns.
Even so, don’t jump all in at once: keep new positions small to start. The market will tell you pretty quickly if it was a well-timed buy or not. Stay disciplined and stick to sound buy and sell rules.
Stocks To Watch: Alphabet, Bio Techne
Google parent Alphabet (GOOGL) is edging closer to a 2,431.48 buy point in a flat base. Dell Technologies (DELL) is also in a flat base and briefly cleared a 103.90 entry on Monday. Fox Factory (FOXF) continues to test support at its 50-day moving average, within a flat base that has a 166.98 buy point. Applied Materials (AMAT) may be forming a handle in its 10-week consolidation. Its current buy point is at 146.10. Bio Techne (TECH) is holding firm support at its 50-day line, below a 444.93 buy point in a flat base.
Alphabet and Applied Materials are IBD Leaderboard stocks. Applied Materials is also on the IBD SwingTrader lineup.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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