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Dow Jones futures will open Monday evening, along with S&P 500 and Nasdaq futures, after the long Christmas weekend. Tesla Shanghai stopped production while China was a competitor Nio (NIO) introduced new models.




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The stock market rally had another tough week, but rebounded from Thursday’s lows. Major indexes were mixed last week, but many leading stocks came under further pressure. The market’s rally looks shaky, but it’s not over yet.

Not a good time to buy stocks, especially growth names. But investors should always look for potential growth leaders for the next sustained market rally. Shift4Payments: (FOUR), Celsius (CELH), Impinge (PI), Enphase Energy: (ENPH) and: Box (BOX) are holding up relatively well in the current weak market. FOUR shares and Box are consolidating near recent highs, while Impinj, Celsius and ENPH shares are trading around the 50-day or 10-week lines. None are actionable at the moment, and all could weaken if the market continues to weaken. But keep an eye on them.

ENPH stock is on the IBD Leaderboard and PI stock is on the Leaderboard Watchlist. Enphase, Shift4Payments, Box and CELH are in the IBD 50. ENPH stock is also in the IBD Big Cap 20. Shift4Payments was Friday’s IBD Stock of the Day.

But the growth spurt has had a particularly rough ride Apple: (AAPL), Nvidia: (NVDA) and: Tesla (TSLA).

Nio Day 2022

Finally, a rival to Tesla China Nio (NIO) is holding its Nio Day 2022 on Saturday. It introduced the EC7 coupe SUV, a potential high-end rival to the Tesla Model Y. EC7 deliveries will begin in May 2023. Nio also introduced the updated ES8 SUV, which now rides on the NT 2.0 platform like its all-new models. Shipments begin in June.

Nio also announced a new generation of battery swapping stations and charging options.

Nio production is ramping up with strong demand for its new ET5 sedan and ES7 crossover SUV. But the loosening of Covid rules could trigger a massive wave of infections, and Nio and other Chinese electronics makers could again face production or supply chain disruptions. EV giant BYD: (BYDDF) said this week that Covid cases among workers are reducing production by 2,000-3,000 cars a day.

Nio shares fell 5.4% last week, returning below the 50-day line. The stock is well below the 200-day line.

Tesla Shanghai production stopped

Tesla Shanghai halted production on December 24, and workers will return on January 1, 2023. Production has been widely reported in recent weeks to end at the end of the year, but the EV giant has denied it. Shanghai had already slowed output earlier in the month, with inventories rising rapidly despite price cuts in late October and significant year-end stimulus.

Tesla shares fell 18% last week to 123.15, after falling 16.1% the previous week. These are the worst weekly losses since the March 2020 Covid crash. TSLA shares are at a 27-month low, down 70% from their November 2021 peak.

Dow Jones futures today

Because Christmas falls on a Sunday, U.S. stock and bond markets will be closed on Monday, along with many exchanges around the world.

Dow Jones futures open at 6 PM ET on Monday, along with S&P 500 futures and Nasdaq 100 futures.

Keep in mind that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.


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Stock market rally

The stock market rally had a steady decline for the week, but ended at its worst levels of the week.

The Dow Jones Industrial Average rose 0.9% in last week’s trading. The S&P 500 index fell by 0.2%. The Nasdaq composite fell 1.9%. The small-cap Russell 2000 ended slightly above the threshold.

Over the past week, Apple shares have fallen 2% to 131.86. It is testing its June bear market low of 129.04, falling to 129.64 on Friday morning.

Shares of Nvidia fell 8.2% to 152.06 after falling below their 200-day line last week amid broad chip sales. Shares of NVDA found support at the 50-day line on Friday.

The 10-year Treasury yield rose 27 basis points to 3.75%. The inverse relationship between Treasury yields and stock prices has faded over the past few weeks.

U.S. crude futures rose 6.9% on the week to $79.56 a barrel, after briefly above $80 on Friday.


Tesla is preparing for a very interesting 2023


ETFs

Among the top ETFs, the Innovator IBD 50 ETF ( FFTY ) was down 0.3% last week, while the Innovator IBD Breakout Opportunities ETF ( BOUT ) was up 0.7%. The iShares Expanded Tech-Software Sector ETF ( IGV ) fell 1.8%. The VanEck Vectors Semiconductor ETF ( SMH ) fell 4.7%, with shares of NVDA being SMH’s top holding.

The SPDR S&P Metals & Mining ETF ( XME ) rose 1.6% last week. The Global X US Infrastructure Development ETF ( PAVE ) rose 0.75%. The US Global Jets ETF (JETS) fell 1.3%. The SPDR S&P Homebuilders ETF ( XHB ) fell 1.25%. The Energy Select SPDR ETF ( XLE ) returned 3.2%, while the Financial Select SPDR ETF ( XLF ) rose 0.8%. The Select Healthcare Sector SPDR Fund ( XLV ) rose 0.4%.

Reflecting more speculative stocks historically, the ARK Innovation ETF ( ARKK ) fell 6.9% to hit a new five-year low on Thursday. The ARK Genomics ETF ( ARKG ) slid 5.6% last week. Tesla shares remain the top holdings in Ark Invest’s ETFs.


Five Best Chinese Stocks to Watch Now


To watch growth stocks

Shares of Shift4Payments rose 4.1% to 54.06 last week. FOUR shares have seen wild swings, but have rallied over the past few weeks to near seven-month highs. The relative strength line is at its highest level in eight months, reflecting Shift4’s outperformance relative to the S&P 500 index. However, FOUR shares do not have a clear buy point at this time.

Shift4’s profit and sales growth accelerated last quarter, and the company significantly expanded its target markets.

Shares of CELH fell 1.85% last week to 106.79, consolidating just below the 21-day line and nearing the 10-week line. Celsius shares briefly breached the 118.29 cup-base buy point earlier this month before pulling back. But it allows the 10-week line to hold, while the RS line is held near the highs. A pullback above the 10-week line and 21-day line would also break the short downtrend, suggesting an early entry for CELH shares.

Celsius is seeing sales growth and should see strong earnings in 2023, but the energy drink maker has a caffeinated rating.

Shares of Impinj rose 4 cents to 111.87, and Friday’s 2.9% drop sent it below the 50-day and 10-week lines for the first time since a powerful earnings breakout on Oct. 27. PI shares pulled back modestly. off a record high for four consecutive weeks, but its RS line barely budged. A bullish bounce above the 50-day line would suggest an early buy point.

Impinj’s revenues increased in 2022, with steady profits visible next year.

Enphase shares fell 3.1% last week to 293.95, below the 50-day line. 316.97 buy point from the cup handle buy point is no longer valid. The always-volatile ENPH stock may regroup after a few weeks. A bullish move above the 50-day line, perhaps resetting an old buy point, could be an aggressive entry.

Enphase’s revenue and earnings growth is growing rapidly, with steady growth in 2023 and beyond, with solar incentives in place in the coming years.

Box shares have traded sharply over the past few weeks, falling 0.7% to 31.01. The cloud-based data storage company is on the edge of a buy zone with a 29.57 cup handle after a breakout on Dec. 12, according to MarketSmith analysis. The latest pause can be seen as the handle of the eight-month consolidation. That buy point is 31.10, but investors may be looking for an early entry. Ideally, the 21-day line would catch up to the next one, and the 50-day line would close the gap with the Box.

Box office growth has accelerated over the past two quarters.

Market rally analysis

Stock market rally remains under heavy pressure. The major indexes were mixed for the week, failing to bounce back from last week’s big, ugly outside week.

The Dow Jones rallied modestly for the week after testing its 50-day line several times.

The S&P 500 was down modestly, but that masked some big swings for the week. The benchmark index recovered its 50-day moving average on Wednesday. The S&P 500 and other major indexes fell to their worst levels in weeks on Thursday, but closed lower.

The S&P 500 edged up slightly on Friday, but below its 50-day line. The Invesco S&P 500 Equal Weight ETF ( RSP ), which has a lower weighting to tech titans like Apple, rallied Friday to just retrace its 50-day high.

The Nasdaq was a big laggard, with Tesla shares and Nvidia among the notable laggards. But there was broad weakness for rising stocks, particularly among chip names, following weak results and guidance from memory chipmakers. Micro technology (MU).

The S&P 500 should recover the 50-day line, but that would be just the first step.

It is unclear whether the market will bounce back, decline to bearish lows, or move sideways in an unsustainable fashion for an extended period of time. The latter may be more likely until it is clear when and where the Fed will stop raising rates and whether the economy will slip into a clear recession.

While growth stocks like Enphase and Celsius are worth a look, many medical stocks and other defensive growth plays are not holding up. Metals and mining, industrials, housing and some energy plays are doing relatively well.


Time the market with IBD’s ETF Market Strategy


What to do now?

During the week, the stock market fell further and further, the technical picture did not change dramatically. Except for the Dow Jones, the major indexes are below their major moving averages. Leading stocks have been difficult to hold at best.

Investors should have minimal exposure and be wary of adding new positions. Don’t get excited by a strong open or even bullish session or two.

Keep your watch lists fresh. Many stocks from different industries are created or installed. Some names show strong relative strength but lack a clear buy point. That’s fine right now.

In the meantime, spend some time reviewing your trades over the past year, including your big winners and losers, as well as the trades you didn’t make but wish you had. Did you follow your rules and were your rules correct?

Read The Big Picture daily to stay in sync with market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter @IBD_ECarson for stock market updates and more.

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