The stock market rally showed a strong move last week, with bank concerns easing. Major indices have regained key levels and many blue-chip stocks are flashing buy or setup signals.
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Tesla (TSLA) and China’s EV competitors BYD (BYDDF), New (nio), XPeng (XPEV) And Lee Otto (L.I) in focus over the weekend.
Li Auto posted record sales in March and the first quarter on Friday night, or Saturday morning local time. Fellows from Nio and XPeng will also report on Saturday, with EV and battery giant BYD due this weekend as well.
Tesla will release delivery and production numbers for the first quarter, likely on Sunday. Analysts expect another record quarter for delivery, thanks to deep price cuts.
Tesla stock broke a buy point on Friday, but it’s just below the 200-day moving average. LI stock is just below the buy point. BYD stock rebounded near a strong entry point. XPeng and Nio are also heading higher but there is work to be done.
while, general motors (GM), the father of Chrysler stellants (STLA) and several other automakers will release first-quarter US sales on Monday. Ford Motor (F) will be out on Tuesday. STLA stock is building near a buy-in while GM and most other traditional automakers need a fix.
Investors should put cash to work, gradually increasing their exposure. But don’t buy extended stocks or focus too much in a particular sector.
The video embedded in this article reviewed market movement in depth and analyzed it Aehr Test Systems (AEHR), service now (now) and TSLA shares.
Dow jones futures today
Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
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Stock market rise
Last week’s stock market rally started out slowly, but took a decisive upward turn starting Wednesday, closing near the weekly highs.
The Dow Jones Industrial Average rose 3.2% in trading last week. The S&P 500 jumped 3.5%. The Nasdaq Composite jumped 3.4%. Small cap Russell 2000 rose 3.85%.
The 10-year Treasury yield rose 11 basis points to 3.47%, but fell on Friday.
US crude oil futures rose 9.25% to $76.67 a barrel last week, but still fell 5.7% for the quarter.
Exchange Traded Funds
Among the ETFs, the Innovator IBD 50 ETF (fifty) by 3.4% last week. iShares Expanded Technology and Software ETF (IGV) charged by 4.7%. VanEck Vectors Semiconductor Corporation (SMH) gained 3.4%.
SPDR S&P Metals & Mining ETFs (XME) rebounded 5.75% last week. Global Infrastructure Development Fund X US (cradle) increased by 4.9%. US Global Gates Foundation ETF (Planes) rose 7.75%. SPDR S&P Homebuilders ETF (XHB) gained 3.9%. Energy Defined Fund SPDR ETF (xle(by 6.3% and the SPDR fund)XLV) increased by 1.7%.
SPDR Financial Selection Fund (XLF) rebounded 3.8%. SPDR S&P Regional Banking ETF (KRE) increased by 0.8%.
Reflecting more speculative stories, the ARK Innovation ETF (ARK)ark(rebound 6.9% last week and the ARK Genomics ETF)ARKG) 5%. TSLA stock is a major component of Ark Invest’s ETFs. Cathie Wood’s Ark Invest also owns some shares of BYD.
Top five Chinese stocks to watch now
Tesla delivery
Tesla deliveries for the first quarter should come to about 432,000, surpassing the fourth-quarter record of 405,278 and up 39% from a year earlier. Tesla’s massive worldwide price cuts and new US tax rebates fueled demand.
On Friday, the IRS laid out some guidelines for sourcing coin batteries and components to qualify for a $7,500 EV credit. It is still not clear which compounds may be affected. The entry-level Model 3, which used LFP batteries made in China, will likely see a credit drop. But for the next few weeks, buyers can still get full credit.
After the first-quarter deliveries, investors will turn to Tesla’s earnings to see how the price cuts affected EPS and profit margins. Will the electric car giant need more price cuts to keep demand high?
Tesla stock jumped nearly 9% to 207.46 last week, including Bob’s 6.2% gain on Friday. That pushed TSLA stock above 200.76 cups with a buy point handle, according to MarketSmith analysis. However, stocks are now approaching the 200-day moving average, which could act as resistance.
Tesla vs. BYD: EV Giants Vy for the Crown, But Which One is a Better Buy?
China EV delivery
Li Auto announced early Saturday that it had delivered 20,823 hybrid SUVs for the month of March, up 89% over the previous year. This comes after 16,620 in February and 15,141 in January. First-quarter sales totaled 52,584, ending up lower than its forecast in late February of 52,000 to 55,000. March sales include the new L7, a five-seat electric SUV.
BYD and most electric vehicle makers in China should also report an improvement in sales in March versus February. A price war sparked by Tesla and slower demand growth for electric vehicles amid overcapacity is a challenge for automakers.
BYD in particular is ramping up exports, providing an escape valve from the brutal domestic market. On March 28, BYD reported huge 2022 earnings growth, with fourth-quarter net income up more than 1,100%.
BYD stock jumped 9.8% in the last week to 29.40, building the right side of a new base at 34.04 buy points. Stocks regained their 50-day line and finished just below the 200-day line. A decisive move above 200 days could provide an early entry.
LI stock has a double bottom with 25.46 buy points just above the 200 day line. Shares rose 6.7% to 24.95, last week, but fell 1.5% on Friday as Li Auto hit resistance at buy point and 200 day.
XPEV stock jumped 15.5% last week and Nio stock nearly 16%. Both are above the 50 day lines but below the 200 day lines.
China’s electric vehicle makers are set to unveil or launch a slew of new models at the Shanghai Auto Show, which starts on April 18. New models can spur new sales, but they can also put more pressure on existing EVs.
Market rally analysis
After showing resilience in the previous week, the major indices posted strong gains last week. The Nasdaq and S&P 500 had follow-up days on Wednesday, confirming the stock market’s rally.
The Nasdaq was operating above 12,000 and approaching the February 2 high. The Nasdaq 100 index jumped to its best level since late August.
The S&P 500, which regained its 50-day FTD line on Wednesday, continued advancing through Friday. The Dow Jones retraced the 200-day line during the week and moved above the 50-day line on Friday. The Russell 2000 Index, which as recently as March 24 hit a five-month low, has regained its 21-day line as bank stocks have held the least.
The banking crisis appears to be abating. Fed rates are likely to peak much lower than markets thought a month ago. That’s a bullish mix, especially for growth stocks.
While megacaps like apple (AAPL), Microsoft (MSFT), Meta platforms (meta), nvidia (NVDATesla stock took a massive share of the Nasdaq and S&P 500’s first-quarter gains, and market breadth has improved somewhat in the past week. as well as market leadership.
Chip stocks continue to shine, with leaders extending breakouts and establishing other names or clearing long points, with the unfortunate exception of AEHR stock Friday.
But software is emerging, too, with cybersecurity and a variety of business software playing blinking buy signals, including NOW stock.
A few payment stocks and networks also impress, such as Shift 4 (four) And Juniper Networks (JNPR). Meritage Homes (MTH) and several other builders act well, along with some related plays.
Many shoe stocks are going up, eg on hold (Onon) And Crocs (CROX), as well as select retailers of Ulta Beauty (Ulta) to Walmart (wmt). Some of China’s Internet and EV plays revolve around buying points, incl Baidu (Bedo), netease (NTES) and BYD and LI stocks.
Many stocks and other sectors are moving in their positions.
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What are you doing now
The stock market rally is in a definite uptrend. An increasing number of stocks are flashing buy signals. The main risk factor, the banks, appears to be receding.
Investors need to take advantage of the current environment. But gradually increase exposure, and let the market pull you in. It is not yet clear if this is the beginning of an extended rally in the market, or just a short-term advance. It is also possible for major indices to pause or decline briefly.
Don’t buy extended stock. And while investors can fill their portfolios with, say, only high-quality chip stocks, it’s not wise to focus too much in certain sectors.
Rewrite your watchlists. Focus on stocks that are in or near overbought areas, but watch for other names that are being generated. If this pool had legs, many of those would soon be doable.
Read the big picture every day to stay in sync with market trend, leading stocks and sectors.
Please follow Ed Carson on Twitter at @employee For stock market updates and more.
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