The Dow Jones Industrial Average briefly reversed lower Tuesday, as Bitcoin crossed above $50,000. Hot IPO stock Palantir Technologies dived on earnings, while Tesla stock looked to continue its rebound from a key support level.
Dow Jones Today
On Tuesday, the Dow Jones Industrial Average briefly turned lower before again edging higher, while the S&P 500 fell 0.1%. The tech-heavy Nasdaq composite reversed 0.3% lower in midday trade.
U.S. Stock Market Today Overview
Last Update: 10:36 AM ET 2/16/2021
Stock Market Rally
Looking back at the current uptrend, November was a key month for the stock market. IBD’s The Big Picture flagged the new uptrend following the market’s bullish follow-through day on Nov. 4. Meanwhile, the middle of February has the Dow Jones Industrial Average, Nasdaq and S&P 500 hitting record highs.
As the Dow transports rallied last week, Friday’s Big Picture commented, “Many market veterans like to see this market sector rise in tandem with the Dow and other key indexes. It suggests growing confidence that the economy is picking up steam.”
Due to the recent strength, investors can shift back to an offense stance, with an understanding that there are still good reasons for caution. Look for stocks that are breaking out above new buy points, like Nvidia.
Focus on stocks that showed strong relative strength during the recent weakness. They could be some of the market’s leaders if the indexes are able to continue their record-setting ways.
The price of Bitcoin jumped more than 3% to all-time highs Tuesday morning. Bitcoin reached as high as $50,584 before paring gains to about $49,400 in morning trade, according to Coindesk.
The Grayscale Bitcoin Trust (GBTC) advanced 4% and is at new highs.
Dow Jones Stocks: Nike
Nike shares bullishly regained their 50-day moving average line in recent sessions.
Early Tuesday, hot IPO stock Palantir Technologies reported strong Q4 results, but 2021 revenue guidance came in slightly below expectations.
Palantir stock dived more than 10% in morning trade before paring losses. It is testing its 50-day support level.
Stocks To Watch: AMD, Nvidia, Trade Desk
Top chip stock Advanced Micro Devices is approaching a 99.33 buy point in a flat base. Shares slipped more than 1% Tuesday, threatening to snap a three-day win streak.
IBD Leaderboard stock Nvidia is in the 5% buy zone past a flat base’s 587.76 buy point amid a 1% rise Tuesday. On Feb. 8, shares broke out above an early entry at 560.07.
According to Leaderboard commentary, “Nvidia broke out of a flat base and is in buy range. With this move, investors could add to their position, or make an initial purchase.”
Trade Desk is building the right side of a cup base, which shows a 972.90 buy point. Be on the lookout for a handle to form, offering a more risk-optimal entry. Shares gained 1.2% Tuesday morning.
A potential flaw is the stock’s lagging relative strength line. It remains relatively far from its old highs, indicating recent stock market underperformance.
Tesla stock looked to snap a two-day win streak Tuesday, moving down more than 2%. On Friday, shares nearly dropped to the 10-week moving average line before reversing higher. A strong move from this key support level would signal a new buy area.
On Jan. 25, Tesla stock hit a record high at 900.40, after climbing as much as 93% from a 466 buy point in a cup with handle.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple moved down 1.3% Tuesday, and remains below its 138.89 buy point in a cup with handle. Shares gave up the entry on Jan. 28.
Meanwhile, Microsoft fell 0.3% Tuesday morning and is just shy of record highs. Shares of the software giant broke out past a 232.96 buy point in recent sessions. The stock is at the top of the 5% buy zone that goes up to 244.61.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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