The Dow Jones Industrial Average briefly dropped over 250 points Monday before cutting losses, as the price of Bitcoin dived more than 20%. Apple and Tesla fell sharply, while Nio stock soared as much as 13% after unveiling a new sedan. Twitter tumbled 10% after permanently suspending President Trump’s account.
Among the Dow Jones leaders, Apple (AAPL) fell 2%, while Microsoft (MSFT) moved down 0.8% in today’s stock market. Boeing (BA) faltered almost 3% after a Boeing 737-500 jet flown by Indonesian carrier Sriwijaya Air crashed in the sea shortly after takeoff with more than 60 on board.
A stock in or near a buy zone in the current stock market rally is Chipotle Mexican Grill (CMG).
Apple, Chipotle, Microsoft, and Tesla are IBD Leaderboard stocks.
Dow Jones Today
On Monday, the Dow Jones Industrial Average trimmed its early decline to 0.2%, while the S&P 500 slipped 0.3%. The tech-heavy Nasdaq composite declined 0.75% in midday trade.
According to the Worldometer data tracker, the cumulative number of confirmed coronavirus cases in the U.S. topped 22.9 million on Monday. Total virus-related deaths rose past 383,000.
The cumulative total of worldwide Covid-19 cases confirmed since the start of the outbreak topped 90.7 million Monday, with more than 1.94 million virus-related deaths.
Stock Market Rally Extended?
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 first week of January 2021 shows major stock indexes at record highs.
Friday’s Big Picture commented, “The Nasdaq led Friday’s action with a 1.1% advance. A 2.4% gain for the week hammered home the point that big and megacap techs are not ready yet to roll over.”
Investors should continue to use the stock market’s strength to buy breakouts. Be patient and wait for powerful breakouts instead of chasing extended stocks. If the new breakouts work, then add more exposure. But if breakouts start to fail, then you can back away.
In particular, focus on stocks with strong relative strength. Find them by using the relative strength line. The RS line measures a stock’s price performance vs. the S&P 500. If the stock is outperforming the broader market, then the RS line angles upward. If a stock is performing worse than the broad market, then the line will point lower.
Stocks To Watch: IBD Long-Term Leaders
Stocks to watch include IBD Long-Term Leaders, companies with stable earnings growth and price performance. Veeva Systems (VEEV) is the latest addition to the list, as it looks to regain its 10-week line. Shares rose 1% Monday, and are approaching an early entry at 292.90, while the conventional buy point remains at 314.09.
Bitcoin set an all-time high at $41,962 on Friday.
Dow Jones Stocks To Watch: Boeing Slides
Boeing pared early losses to 2.2%, trading lower after a Boeing 737-500 jet flown by Indonesian carrier Sriwijaya Air crashed in the sea shortly after takeoff from Jakarta with 62 persons on board.
Boeing stock is testing its 50-day moving average line and is about 40% off its 52-week high.
Stocks In Or Near Buy Zones: Chipotle
IBD Leaderboard member Chipotle Mexican Grill regained its 1,366.76 double-bottom buy point last week as it bounced off its 50-day line, according to IBD MarketSmith chart analysis. Shares slipped 0.5% Monday morning, but remain just above the buy point.
Per Leaderboard commentary, “The new base is second stage, which boosts the chances of a good advance from here. After a breakout, one would like to see the relative strength line rise into new high territory, but the line hasn’t quite made it to new highs.”
According to IBD Stock Checkup, Chipotle stock shows an 81 out of a perfect 99 IBD Composite Rating. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths.
Stocks On The Move: Twitter
Twitter tumbled 10% after permanently suspending President Donald Trump’s account on Friday. The stock triggered the 7%-8% loss-cutting sell rule from a 53.03 buy point in a cup base.
Chinese Tesla rival Nio surged as much as 13% to hit an all-time high following Friday’s breakout above a 57.30 buy point in a short cup base. Shares are already extended past the buy zone.
At the company’s annual Nio Day, Nio unveiled its new Nio ET7. The Nio ET7 will launch in Q1 2022.
The ET7 will come with advanced driver-assist capabilities, including Lidar functionality and an Nvidia (NVDA)-powered supercomputer. Nio claims it’ll have far-greater computing power and camera resolution than Tesla Full Self Driving.
Tesla Stock In Climax Top?
IBD Leaderboard stock Tesla slid from record highs Monday, falling more than 7% in early trade before paring some losses. Shares are set to snap an 11-day win streak.
Friday’s IBD Stock Of The Day signaled that Tesla was flashing several signs of a climax top amid a sharply vertical run over the last few weeks.
On Friday, Tesla stock hit a record high at 884.49. Shares climbed as much as 88% from a 466 buy point in a cup with handle.
Dow Jones Leaders: Apple, Microsoft
In recent weeks, Apple shares have moved above aggressive entries at 125.49 and 122.09.
Software giant Microsoft moved down 0.8% Monday, as it fights to hold above its 50-day line last. Shares continue to trace a new base with a 228.22 buy point.
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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