Stock Market Bounces; IBD 50 Stock Breaks Out, But Should You Buy It?
The stock market rose in the first hour of trading Tuesday as it tries to rebound from three days of selling that once again threw its outlook into doubt.
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Stock indexes today came off opening highs. The S&P 500 climbed 0.6% and is trying to get back above its 50-day moving average.
The Nasdaq composite bounced 0.5%. The composite is still 3% below its 50-day average and on Monday undercut its Dec. 3 low. But the index is now above that low.
On Friday, IBD cut its stock market outlook to “uptrend under pressure” after indexes and many leading stocks failed to continue with Wednesday’s follow-through signal.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 35281.83 | +349.67 | +1.00 |
| S&P 500 | (0S&P5) | 4596.66 | +28.64 | +0.63 |
| Nasdaq | (0NDQC ) | 15061.81 | +80.87 | +0.54 |
| Russell 2000 | (IWM) | 216.25 | +4.13 | +1.95 |
| IBD 50 | (FFTY) | 42.76 | +0.45 | +1.06 |
Last Update: 10:16 AM ET 12/21/2021 |
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Volume was lower on the NYSE and Nasdaq compared with the same time on Monday.
The Dow Jones Industrial Average rose 1% early today.
Nike, Boeing Lift The Dow
Dow component Nike (NKE) rallied more than 6%, breaking a four-week downward trend after the athletic apparel maker beat quarterly profit expectations. Late Monday, Nike reported earnings per share of 83 cents, 6% higher, on sales of $11.4 billion. Sales were up 1% from a year ago, but flat on a currency-neutral basis. Nike shares regained the 50-day line and could be forming a new base.
Boeing (BA) also gave the Dow a boost, rising 3.5%. UPS (UPS) is buying 19 Boeing 767 freighter planes. The 767 freighter, which is already in UPS’ fleet, has been a bright spot for Boeing this year.
The Russell 2000 small-cap index jumped 2%, erasing Monday’s losses. In fact, the Russell outperformed the major indexes. But it remains a steep 12% below its Nov. 8 peak, a decline that fits the traditional definition of a correction.
The transportation sector led as iShares U.S. Transportation ETF (IYT) climbed 1.4%. The ETF fell below the 200-day line Monday but is now above it.
IBD 50 Outperforms Stock Market
Innovator IBD 50 ETF (FFTY) climbed 1% and is close to erasing Monday’s losses. Pfizer (PFE) slid nearly 6% in heavy volume, taking a chunk out of a nearly 19% surge from its 51.96 buy point, reached on Nov. 26. While it was a big loss, there’s no sell signal.
CubeSmart (CUBE) broke out of a flat base in heavy trading. But the stock dipped back below the 56.74 buy point. The buy zone goes to 59.58. The relative strength line is at new highs, a bullish indication.
The base saw constructive price and volume action. But keep in mind that the stock market remains in weak shape and buying any stock comes with greater risk than normal.
Sound breakouts for O’Reilly Automotive (ORLY), Green Brick Partners (GRBK), Eli Lilly (LLY) and other top stocks have faded.
Micron Technology (MU) surged 9%, rising past the 89.15 buy point of a large cup-with-handle base. The memory products maker beat November-quarter estimates and its forecast for the current quarter was above analysts’ views.
Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia
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