Dow Jones Futures Due: Market Rally Faces Big Test; Apple Leads 4 Dow Stocks In Focus

Dow Jones futures open Sunday evening, along with S&P 500 futures and Nasdaq futures. The stock market rally held support levels last week. Now, could the S&P 500 move above its 200-day moving average in the coming days and weeks? Apple (AAPL) could be key.


Apple stock held key levels and rose modestly, even as the overall market generally retreated. Like the S&P 500, the iPhone tech titan is returning to its 200-day line. A decisive move above that level could provide a buying opportunity. But another rejection could offer another chance to short AAPL stock.

Meanwhile, fellow Dow Jones components Boeing (BA), JPMorgan Chase (JPM) and GS stock have been quietly on significant runs in recent weeks, contributing to the Dow’s performance in the current market rally. BA stock technically is right around a traditional buy point. Goldman Sachs ( GS ) is creating a deep base while JPM stock still has work to do.

Dow Jones futures today

Dow Jones futures open at 6 a.m. ET on Sunday, 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.

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

Stock market rally analysis

Last week, the Dow Jones Industrial Average rose less than 0.1% in stock market trading from the previous week. The S&P 500 index fell 0.7% and the Nasdaq Composite fell 1.5%. The small-cap Russell 2000 yielded 1.75%.

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On Tuesday, November 15, the S&P 500 briefly topped 4,000, close to the 200-day moving average. That level is especially important because the benchmark index pulled back just 1 point from the 200-day line on August 16, triggering another leg of the bear market.

A decisive move above the 200-day line, which also roughly coincides with a decline from the January 4 all-time high trendline, would be a powerful signal that the uptrend is more than a bear market rally.

The S&P 500 clearing the 200-day line would also be a positive backdrop for leading stocks struggling near buy points in a choppy market.

Meanwhile, the Russell 2000 fell back below its 200-day line last week, but will likely retrace that level before the S&P 500. The Dow Jones, buoyed by Boeing, Goldman and JPM shares are comfortably above the 200-day. But clearing last week’s high would get the Dow back to 34,000 and just below its August peak.

The Nasdaq, weighed down by aggressive growth, is 8.3% below the 200-day line. Moving above last week’s highs would be a good first step. Also a positive: The 21-day moving average just crossed the 50-day line on Friday.

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Thanksgiving week isn’t necessarily a great time for a big market move. Markets will be closed on Thanksgiving with a half-day session on Friday. Volume will likely be light throughout the week. The next week starts with a bang. On December 1, investors will receive October PCE inflation data, along with the ISM’s November manufacturing index. December 2nd is the November work report. This news could have a major impact on Fed rate hike expectations, bond yields and stock prices.

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So it would not be a surprise to see the major indices in a row in the next week or so. There is nothing wrong with a little consolidation for the major indexes and leading stocks.

Apple stock

Apple stock rose 1.1% last week to 151.29, following the previous week’s 8.2% spike. The stock held its 50-day moving average, with the 21-day line to overtake the 50-day. AAPL stock is only modestly below its 200-day line. The Dow giant is flirting with its 200-day mark on Oct. 28 after earnings. But that turned out to be a great opportunity to short, with stocks falling in a few days to their worst close since mid-June.

A decisive move above the 200-day line, perhaps clearing the October 28 high of 157.50, would provide an early entry into a bottom base starting August 17. shorting possibility.

Apple’s success or failure at the 200-day line could be key to the S&P 500’s own performance, and vice versa.

The shares of Boeing

BA stock fell 2% to 173.89, after a 47% run over five weeks. While the Dow Jones aviation giant reversed lower on October 26 on earnings, the shares rebounded, especially on a bullish cash-flow guidance a few days later.

Technically, Boeing stock is just below the 173.95 cup-basis buy point. But shares are 9.5% above their 200-day line and 19.5% above their 50-day. Breaks around current levels could create a safer buying opportunity.

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Boeing is expected to turn a profit in 2023, ending four years of losses.

The shares of Goldman

GS stock fell 1.55% to 379.20 last week. On a daily chart, shares are extending from a 358.72 cup base buy point within a much larger consolidation. On a weekly chart, Goldman stock has a 389.68 buy point from a year-long cup-with-handle basis, according to MarketSmith analysis. But after a 28% gain over a four-week winning streak, it’s a very small catch. A longer, deeper handle would be helpful, letting the 50-day line close the gap.

The relative strength line is at a four-year high, reflecting the outperformance of Goldman stock vs. the S&P 500. The RS line is the blue line in the charts provided.

The shares of JPM

JPMorgan stock fell 1.1% last week to 133.84. That’s after an advance of 29.5% over six weeks. The stock is above its 50-day and 200-day lines, but has work to do. JPM stock could be building the right side of a long, deep consolidation, or it could be forging a bottom base.

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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