Market Rally Breaks Past Resistance; Tesla’s Painful Transition

The stock market rally picked up steam in the past week, with strong gains, clearing key levels. The S&P 500 briefly faced resistance at the 200-day line, but moved above that key level on Friday. A large number of leading stocks flashed buy points.

X

Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures.

Investors can be adding exposure gradually as the market rally improves. While many top stocks are now extended, Wendy’s (WEN), Exxon Mobil (XOM), Quanta Services (PWR), Celsius Holdings (CELH) and Insulet (PODD) are all actionable from early entries. Wendy’s and PWR stock have new flat bases, joining XOM stock and Insulet. CELH stock needs another week to forge a proper base.

CELH stock is on SwingTrader and the IBD 50. Celsius, Insulet and Wendy’s were the most recent three IBD Stock Of The Day selections.

Meanwhile, Tesla (TSLA) on Friday announced big price cuts in the U.S. and Europe, a week after slashing prices in China and key Asian markets.

Tesla stock closed modestly lower but rebounded solidly for the week. But the EV giant faces a painful transition as investors increasingly view Tesla as an automaker, not a tech company.

The video embedded in this article discussed the strong week for the market rally, and analyzed WEN stock, Quanta Services and Celsius.

Dow Jones Futures Today

Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.

U.S. stock and bond markets will be closed Monday for the Martin Luther King Jr. holiday, but other exchanges around the world will be open.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Stock Market Rally

The stock market rally had a strong week, with the major indexes closing near session highs.

The Dow Jones Industrial Average rose 2% in last week’s stock market trading. The S&P 500 index popped 2.7%. The Nasdaq composite leapt 4.8%. The small-cap Russell 2000 jumped 5.3%.

The 10-year Treasury yield fell 6 basis points to 3.51%, even with Friday’s bounce. Markets strongly expect quarter-point Fed rate hikes in February and March, but then see policymakers on hold. Falling Treasury yields and brighter economic prospects elsewhere are pressuring the dollar, providing another boost to stocks and commodities.

U.S. crude oil futures jumped 8.3% to $79.86 a barrel last week. Copper prices jumped 7.65%.

ETFs

Among growth ETFs, the Innovator IBD 50 ETF (FFTY) rallied 4.4% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) climbed 2.1%. The iShares Expanded Tech-Software Sector ETF (IGV) leapt 4.9%. The VanEck Vectors Semiconductor ETF (SMH) soared 6.7%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) spiked 14.7% last week and ARK Genomics ETF (ARKG) just over 16%. TSLA stock is a major holding across Ark Invest’s ETFs. Cathie Wood’s Ark has restocked its Tesla holdings in recent days and weeks.

SPDR S&P Metals & Mining ETF (XME) bounced 6.3% last week to a seven-month high. The Global…