Χ The stock market rally suffered significant losses on Thursday, with the main indicators underestimating the key short-term support. Below the surface, conditions are even worse, with the declining defeating the winners and the breakouts not working. With that in mind, Ulta Beauty (ULTA), Dollar Tree (DLTR) and Canadian Natural Resources (CNQ) are close by. All have relative strength lines at or near 52 weeks or record highs. The ULTA stock is flirting with a 426.93 cup-with-handle market point, according to MarketSmith analysis. Shares finally fell 0.7% to 422.35 on Thursday. The DLTR stock is close to overtaking the cup with a handle, but is just above its 50-day line, so it offers more security. The Dollar Tree has a buy point of 166.45, but a move above Thursday’s high of 163.36 would provide an entry into the trend line. Shares fell 0.9% to 159.85. CNQ’s share is not far from its 50-day line and is part of the leading oil and gas market. Shares fell 2.4% to 66.65, close to close at 69.56. Canadian Natural Resources was the stock of the day at IBD on Thursday. Fortinet (FTNT), meanwhile, rose 1% to 303.50 points, just recovering its 50-day line, fueled by an announcement of a 5 to 1 FTNT split. The shares approached 200 days in the day, but fell as the sell-off intensified in the market. The cyber security leader is worth watching, with the RS line recovering high. The FTNT stock is in a messy consolidation and is far from the traditional market points. Fortinet is the IBD Long-Term Leader. Investors could take the FTNT stock as a Long-Term Leader if it resolutely recovers the 200-day line. However, recent gains have been modest, while the current market climate is not encouraging.
Tesla stock
Finally, Tesla (TSLA) fell 0.9% to 719.12 points. For the second consecutive session, the Tesla stock fell steady overnight gains, hitting resistance at the 21-day moving average. The TSLA stock is far from being active. Sales and production in China recovered in May, while Tesla production in Shanghai reportedly has now returned to full capacity. Meanwhile, the National Highway Traffic Safety Administration is extending autopilot detection to 830,000 Tesla electric vehicles. The investigation began last year focusing on autopilot accidents with emergency vehicles. NHTSA seeks to determine whether Autopilot undermines “driver oversight effectiveness”. The video embedded in this article analyzed market activity and discussed the shares of TSLA, Adobe (ADBE) and Quanta Services (PWR). The Chinese giant is approaching the heights as it conquers the EV Crown and becomes a supplier of Tesla
Consumer Inflation Report
The Ministry of Labor will publish the consumer price index in May at 8:30 a.m. ET. Economists expect a jump of 0.7% compared to April, led by energy and food prices. CPI inflation should fall to 8.2% for the second consecutive month from 8.3 in April. But this is not a significant drop and it is likely that overall inflation will rise. Base prices should go up by 0.5% from month to month. Structural inflation is expected to fall to 5.9% from 6.2% in April. The US Federal Reserve wants to see inflation fall sharply, with labor markets cold enough that wage pressures do not keep inflation very high.
Dow Jones Futures Today
Dow Jones Futures increased 0.15% against fair value. S&P 500 futures rose 0.1% and Nasdaq 100 futures rose 0.1%. The CPI Inflation Report is sure to affect the performance of futures and the Dow Jones Treasury ahead of Friday’s opening bell. Remember that overnight action on Dow futures and elsewhere does not necessarily translate into real trading at the next regular trading session. Join the IBD experts as they analyze stocks that can act in the stock market rally at IBD Live
Stock Market Rally
The stock market rally was mixed on Thursday morning, but sales increased, especially late in the afternoon. The Dow Jones Industrial Average fell 1.9% in Thursday’s trading. The S&P 500 index fell 2.4%. The Nasdaq composite fell 2.75%. Russell 2000 small capitalization fell 2.3%. Flex LNG (FLNG), Amphastar Pharmaceuticals (AMPH) and TimkenSteel (TMST) continued to fall on Thursday in decisive failures to break away from a new base. Vertex Pharmaceuticals (VRTX), which tried to break out on Wednesday, fell below the 50-day line on Thursday, but has not yet collapsed. Nor did Atkore (ATKR), which broke out on Friday and rose in earnings on Monday, before depreciating the market point on Thursday. US crude fell 0.5 percent to $ 121.51 a barrel, still three months high. Gas prices rose 3% after falling overnight after falling steadily on Wednesday. The yield on the 10-year bond increased by 1 basis point to 3.04%. The European Central Bank announced on Thursday that it will start raising interest rates in July.
ETF
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) fell 3.6%, while the Innovator IBD Breakout Opportunities ETF (BOUT) lost 2%. IShares Expanded Tech-Software Sector ETF (IGV) fell 3.1%, with FTNT holding IGV. VanEck Vectors Semiconductor ETF (SMH) fell 2.7%. The SPDR S&P Metals & Mining ETF (XME) sold 4.8% and the Global X US Infrastructure Development ETF (PAVE) fell 2.1%. The US Global Jets ETF (JETS) fell 3.4%. The SPDR S&P Homebuilders ETF (XHB) fell 0.5%. The Energy Select SPDR ETF (XLE) lost 2.2% and the Financial Select SPDR ETF (XLF) fell 2.5%. The Health Care Select Sector SPDR Fund (XLV) closed by 2.3%. Reflecting the most profitable stocks, ARK Innovation ETF (ARKK) plunged 6.1% and ARK Genomics ETF (ARKG) 5.65%. The TSLA stock remains the No. 1 ETF holding in Ark Invest. Five best Chinese stocks to watch now
Market Rally Analysis
The stock market rally had its worst day in weeks. The main indexes closed below the moving average of 21 days for the first time since the end of May and fell from their daily lows in June. The Nasdaq recorded higher volume, marking its second consecutive day of distribution. Thursday was also a trading day for the S&P 500 and the Dow Jones, as NYSE volumes also rose. But wait, there is more! The market rally is much weaker than the main indicators show. The Russell 2000 and S&P MidCap 400, which went above their 50-day high on Tuesday, fell back on Wednesday and fell sharply on Thursday, depreciating their 21-day high. The weakness in small and medium capitalization is a good indicator of the size of the market, which was miserable Thursday. The losers led the winners almost 3-to-1 on the Nasdaq and 4-to-1 on the NYSE. Apart from oil and gas, market activity is deteriorating. Maritime stocks have declined, reinforcing the weakness of shipping in general. Metals and miners are melting again. Agriculture projects do not show green shoots. Drug stocks and utilities such as VRTX, Pfizer (PFE) and Exelon (EXC) had a difficult meeting after holding up well enough. Top stocks are not doing well. Oil and gas reserves are doing well overall, but even this sector is showing strong volatile movements, with LNG-related games such as the FLNG stock falling in the last two days. Outbursts generally fail, often dramatically. On the downside, the next big level to watch is the next day on the Nasdaq on May 26th. A close below this low FTD would be a very bad sign for the market rally. Market time with IBD ETF market strategy
What should we do now
The stock market rally is showing many worrying signs. Of course, it is likely that the current uptrend will go higher when the inflation report and the Fed meeting are in the past. But these events could also be catalysts for greater discounts. Investors need to use risk management. Even if the market rally recovers soon, this does not mean that recent failures will suddenly be revived and lead to aggravation. Current market activity helps to create bases and manipulations, so investors should update their watch lists with new additions and deletions. Ulta Beauty, Dollar Tree and Canadian Natural Resources may already be on your list, and the FTNT stock may be one of those you need to slip through again. But keep your exposure light until conditions improve. Making quick gains and quickly reducing losses is vital. Read the Big Picture every day to stay in sync with market direction and top stocks and industries. Follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more. YOU CAN ALSO LIKE: Do you want to make quick profits and avoid big losses? Try SwingTrader The best growth stocks for buying and monitoring IBD Digital: Unlock IBD Premium stock lists, tools and analysis today
