The Dow Jones Industrial Average jumped over 500 points early Monday, following Friday’s stock market sell-off. Apple and Tesla looked to rebound from recent dives, while Nio surged a much as 14% on strong vehicle deliveries.
Tesla (TSLA) jumped 4%, attempting to rebound from Friday’s 5.55% dive.
JD.com, Microsoft, Nike and Tesla are all IBD Leaderboard stocks.
Dow Jones Today
Early Monday, the Dow Jones Industrial Average moved up 1.9%, while the S&P 500 rose 1.6%. The tech-heavy Nasdaq composite advanced 1.2% in morning trade.
Amid the coronavirus stock market rally, the tech-heavy Nasdaq is up 21.6% for the year through Friday’s close. Meanwhile, the S&P 500 is up 1.2%, while the Dow is down 7.1% year to date, through the Oct. 30 close.
According to the Worldometer data tracker, the cumulative number of confirmed coronavirus cases in the U.S. topped 9.4 million on Monday. Total virus-related deaths rose past 236,000.
The cumulative total of worldwide Covid-19 cases confirmed since the start of the outbreak topped 46.9 million Monday, with more than 1.2 million virus-related deaths.
Coronavirus Stock Market Trend
According to IBD’s The Big Picture, the coronavirus stock market rally recently succumbed to heavy institutional selling.
Friday’s Big Picture warned that “The stock market sold off sharply Friday, capping the worst week since the coronavirus market crash in March. The Nasdaq composite dived as much as 3.25% on Friday before paring losses. Stock market leaders Amazon.com, Apple, Facebook and Tesla all suffered big declines.”
A market in correction means investors should avoid new purchases. Exposure should be severely limited, and 100% cash would certainly be acceptable.
Stock market corrections seem bleak, but a new uptrend could be four days away. So don’t tune out. Now is the best time to create a new watchlist of stocks that could turn into the next stock market leaders.
In particular, focus on stocks with strong relative strength. You can find the next uptrend’s leaders while the market is still correcting, which can be done 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 include IBD Long-Term Leaders, companies with stable earnings growth and price performance.
Dow Jones Stocks: Nike Tests Key Level
Dow Jones leader Nike is back at its 50-day line for the first time since an Aug. 10 breakout above a 104.79 buy point in a cup with handle, according to MarketSmith chart analysis. Shares rose over 2% in early trade.
The blue chip retailer is one of the Dow’s top performers in 2020, up 18.5% through Friday’s close.
Tesla Rival Nio Soars
Tesla rival Nio surged 14% after reporting strong October vehicle deliveries early Monday. Nio delivered 5,055 vehicles in October, up 100% year over year. Year-to-date deliveries more than doubled, jumping 111% to 31,430 vehicles.
Nio shares hit a record high.
Xpeng Motors reported 3,040 October deliveries, a 229% increase year over year. Year to date deliveries are up 64% to 17,117. Shares jumped 14% in morning trade.
Meanwhile, Li Auto said October deliveries of its One SUV rose 5% month over month to 3,692. Beijing-based Li began volume production in November 2019. The stock is breaking out above a 21.96 buy point in a cup with handle, according to MarketSmith chart analysis, amid a 15% surge. Remember, a stock market correction prevents new buys.
Stocks Near Buy Zones: JD.com, Monolithic
According to the IBD Stock Checkup, JD stock has a 99 out of a best-possible 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.
Friday’s IBD Stock Of The Day, Monolithic Power Systems, is trading near a 325.28 buy point in a short shelf consolidation. Shares rallied 0.5% Monday morning.
Bullishly, the stock’s relative strength line is at new highs already, indicating the stock is holding up well during the recent stock market sell-offs.
Tesla stock looked to rebound from Friday’s 5.55% plunge, moving up 4% in morning trade. Shares are about 20% off their 52-week high, as they form a new base with a 466 buy point.
According to IBD Leaderboard commentary, “The stock is forming an awkwardly-shaped cup with handle. The handle is deepening but remains in place.”
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple rallied 1%, recovering a small portion of Friday’s earnings-related 5.5% tumble.
The blue-chip giant is the No. 1 performing Dow Jones stock for 2020, with a 48.3% advance through Friday’s close. Recent Dow Jones 30 addition Salesforce.com (CRM) is the No. 2 performer with a 42.8% year-to-date advance.
Software giant Microsoft looked to recover from Friday’s 1.1% fall, rallying 1.1% Monday morning. Shares remain squarely below their 50-day line.
Year to date, Microsoft is one of the top Dow Jones stocks, advancing 28.4% through Friday’s close.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones futures.
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