Dow Jones Rallies In Mixed Session; Apple, Tesla Flash Sell Signals

The Dow Jones Industrial Average rallied back into positive territory, even as the bears mauled the bulls in a mixed session. Apple (AAPL) and Tesla (TSLA) flashed sell signals, while Walt Disney (DIS) was the leading blue chips.

Among other EV stocks, Nio (NIO) surrendered a key benchmark, while General Motors (GM) was in positive territory. IBD 50 stock MaxLinear (MXL) led stocks passing buy points. Meanwhile, Treasury Secretary Janet Yellen issued a warning about the dangers of Bitcoin.


Nasdaq, S&P 500 Fall

The Nasdaq was in negative territory, and struggling to rally. It was down around 1.5%. DocuSign (DOCU) was the biggest laggard, slipping almost 7%, with Peloton Interactive (PTON) not far behind.

The S&P 500 was also forced lower, though it was down less than 0.5%. Pharmaceuticals stock Viatris (VTRS) was the biggest laggard, slipping more than 13% after giving disappointing 2021 revenue guidance.

Volume was mixed compared to the same time Friday. It fell about 7% on the Nasdaq and was up more than 20% on the NYSE.

The S&P sectors were a mixed bag, with a balance of winners and losers. Energy and financials were leading.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 31622.36 +128.04 +0.41
S&P 500 (0S&P5) 3897.32 -9.39 -0.24
Nasdaq (0NDQC ) 13670.05 -204.41 -1.47
Russell 2000 (IWM) 226.04 +0.85 +0.38
IBD 50 (FFTY) 48.03 -0.87 -1.78
Last Update: 1:26 PM ET 2/22/2021

Small caps were outperforming the major indexes. The Russell 2000 was up around 0.4%, and was near session highs.

Growth stocks were smacked lower by the bears, with the Innovator IBD 50 ETF (FFTY) falling almost 2%. 360 DigiTech (QFIN) was the biggest IBD 50 laggard, falling almost 9%.

Disney Stock Aids Dow Jones Rally

The Dow Jones Industrial Average was the best performing major index. It managed to rally strongly after opening lower, and was up around 0.3%.

The top performing component was Disney stock. It was up more almost 4%, and is looking to make a new closing high. Disney stock is now at the very top end of its buy range after breaking out of a five-week flat base, according to MarketSmith analysis.

Its ideal buy point is 183.50, while its buy zone tops out at 192.68. Weak earnings amid the coronavirus pandemic have dragged its IBD Composite Rating down to a poor 24.

Disney is the IBD Stock Of The Day for Monday. It was also added to Swing Trader today after flashing a separate buy signal by bouncing off its 21-day exponential moving average.

Apple Stock Loses Key Support

Apple stock flashed a sell signal as it fell below its 50-day moving average. It is also now shy of its 10-week moving average on a weekly chart.

The stock’s bearish action was discussed on Monday’s IBD Live. Its Composite Rating has come under pressure, and has now fallen to a far from ideal 76.

Apple stock is now close to erasing gains from a 125.49 early entry. Investors should consider taking at least partial profits by reducing their exposure to the Leaderboard stock.

The IBD Stock Checkup tool shows earnings growth was hit amid the pandemic in recent quarters. Apple has averaged 16% growth over the past three quarters, which is shy of the 25% earnings growth sought by CAN SLIM investors. However EPS grew by a strong 34% in the most recent quarter.

Tesla Stock Dips; GM Stock Holds Steady

IBD Leaderboard stock Tesla was down around 4.7%. It flashed a sell signal of its own after slipping below its 50-day moving average. It has also slipped below its 10-week moving average.

This is a time to at least consider taking some profits off the table, as its RS line has been declining since early January. It is now up just over 5% for the year, but has surrendered more than 6% over the past four weeks.

Tesla’s Chinese rival Nio also fell below its 50-day line as it gave up more than 5%. A previous breakout from a cup base with a 57.30 buy point failed.

GM stock was faring better, rising around 0.3%. It previously broke out from a cup base Jan. 12 on positive EV news. The buy point was 46.81.

Yellen Warns About “Speculative” Bitcoin

Treasury Secretary Janet Yellen spoke out about the dangers of Bitcoin Monday. She highlighted the fact it is not widely used as a transaction mechanism. Bitcoin tumbled from around $57,500 to just over $52,500.

“To the extent it is used I fear it’s often for illicit finance,” she told CNBC. “It’s an extremely inefficient way of conducting transactions, and the amount of energy that’s consumed in processing those transactions is staggering.”

The key Biden Administration member also warned investors they could be left nursing heavy losses if the digital currency takes a tumble.

“It is a highly speculative asset and you know I think people should be aware it can be extremely volatile and I do worry about potential losses that investors can suffer,” she said.

Grayscale Bitcoin Trust (GBTC) was down more than 8%.

IBD 50 Stock Leads Breakouts

MaxLinear stock is in buy zone after breaking out of a consolidation pattern. The ideal buy point is 38.81.

The stock punched above its 50-day line before passing its entry point, which is a bullish indicator.

The relative strength line for MXL stock has been rising of late, which is encouraging. The stock boasts a near-perfect Composite Rating of 98. At the moment earnings are lagging stock market performance. However, EPS has been accelerating for the past three quarters.

MaxLinear is a provider of RF, analog, digital and mixed-signal integrated circuits. It is a supplier for the cable and satellite broadband communications and the connected home, and wired and wireless infrastructure markets. It is benefiting from the push for 5G adoption.

Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.


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