The Dow Jones Industrial Average briefly fell more than 125 points Tuesday, as the price of Bitcoin set record highs, topping 48,000. GME stock dived another 22% Tuesday midday. Tech titan Nvidia and Dow Jones leader Disney are in buy ranges past new buy points. Baidu soared 8% after announcing an autonomous driving platform in China.
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Among the Dow Jones leaders, Apple (AAPL) was up 0.1%, while Microsoft (MSFT) rose 0.65% in today’s stock market. Disney (DIS) is in buy range after Monday’s breakout move, while Nike (NKE) is approaching a new buy point after last week’s bullish move.
Tesla (TSLA) threatened to give back Monday’s gains, falling over 1% in morning trade. Tesla stock is near a new high. Baidu (BIDU) soared 8% to new highs after announcing an autonomous driving platform in China. The platform will provide AI-driven city transportation services in Guangzhou.
Dropbox (DBX) and Nvidia (NVDA) are among the top stocks in or near buy zones in Tuesday’s stock market action.
Apple, Microsoft and Tesla are IBD Leaderboard stocks. Nvidia was the IBD Stock Of The Day, while Dropbox was Monday’s IBD 50 Stocks To Watch pick. Meanwhile, Nike was featured in this week’s Stocks Near A Buy Zone.
Dow Jones Today
On Tuesday, the Dow Jones Industrial Average traded down 0.1%, while the S&P 500 moved down 0.1%. The tech-heavy Nasdaq composite rallied 0.2% in midday trade.
U.S. Stock Market Today Overview |
||||
|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 31305.71 | -80.05 | -0.26 |
| S&P 500 | (0S&P5) | 3907.84 | -7.75 | -0.20 |
| Nasdaq | (0NDQC ) | 14016.73 | +29.09 | +0.21 |
| Russell 2000 | (IWM) | 227.24 | -0.07 | -0.03 |
| IBD 50 | (FFTY) | 47.92 | +0.20 | +0.42 |
Last Update: 11:10 AM ET 2/9/2021 |
||||
Among exchange traded funds, Innovator IBD 50 (FFTY) traded up 0.4% Tuesday. Nasdaq 100 tracker Invesco QQQ Trust ETF (QQQ) rose 0.1%. Meanwhile, the SPDR S&P 500 ETF (SPY) moved down 0.2%.
Is The Stock Market Rally Overheating?
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 start of February has the Dow Jones Industrial Average, Nasdaq and S&P 500 hitting record highs. But is the stock market rally overheating?
Monday’s Big Picture warned, “Investors who’ve been buying on breakouts can enjoy the fruits of their trades, but have to ask themselves if the stock market is overextended. The Nasdaq and S&P 500 are close to piercing trends lines touching index highs stretching back to November. As the Big Picture has repeatedly noted, the Nasdaq’s gap with its 50-day moving average is dangerously high.”
It continued, “If the stock market will topple, one of the first signs will be erosion in the leading stocks. So far, those premium stocks are holding up well. The IBD 50 rose 1.4% and is near new highs.”
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 Disney, Dropbox and 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.
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Bitcoin Price
The price of Bitcoin added to Monday’s big gains, rising nearly 5% Tuesday morning. The price of Bitcoin reached as high as $48,200 before paring gains to about $46,500 in morning trade Tuesday, according to Coindesk.
The Grayscale Bitcoin Trust (GBTC) advanced another 4% Tuesday, as it continues to rebound from its 50-day moving average line.
Dow Jones Stocks: Disney, Nike
Dow Jones stock Disney broke out Monday and is in buy range past a 183.50 buy point in a flat base, according to IBD MarketSmith chart analysis. The 5% buy area goes up to 192.68. Disney stock slipped 0.5% Tuesday, but is still about 2% above the entry.
Disney will report earnings after the close Thursday.
Elsewhere in the Dow 30, Nike is tracing a new flat base with a 148.05 buy point. The stock fell 0.3% Tuesday.
Nike shares bullishly regained their 50-day moving average line in recent sessions.
Stocks To Watch: Dropbox, Nvidia
Monday’s IBD 50 Stocks To Watch pick, Dropbox, is trying to break out above a 25.26 buy point in a cup base. Shares briefly topped the buy point Monday before closing below it. The stock rose 0.7% Tuesday morning.
According to IBD Stock Checkup, Dropbox stock boasts a 98 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.
IBD Leaderboard stock Nvidia is tracing a flat base with a 587.76 buy point. Shares are just 3% away from the entry amid Tuesday’s 0.5% fall. Shares are in buy range above an early entry at 560.07. Investors could start with a small position at this alternative buy point and add more shares at the conventional entry.
According to Leaderboard commentary, “Nvidia cleared an alternative entry from its January highs. The stock continues to work on a flat or saucer base. Nvidia was cut to a quarter position Jan. 27 but is back to a half with today’s move.”
GME Stock Update
GME stock crumbled another 22% Tuesday midday. GameStop (GME) shares are about 90% off their Jan. 28 high of 483.
Among other short-squeeze targets, AMC Entertainment (AMC) stock slid over 13% in morning trade, and remains about 74% off its recent high.
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Tesla Stock
Tesla stock threatened to give back Monday’s 1.3% gain, falling more than 1% Tuesday morning. Shares are just 4% away from all-time highs.
The Jan. 8 IBD Stock Of The Day column signaled that Tesla was flashing several signs of a climax top amid a sharply vertical run over the past few weeks. But so far the stock is showing tremendous resilience after hitting record highs last week.
On Jan. 25, Tesla stock hit a record high at 900.40. Shares are about 83% % above a 466 buy point in a cup with handle amid Monday’s action.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple moved up 0.1% Tuesday, and remains below its 138.89 buy point in a cup with handle. Shares gave up the entry on Jan. 28.
Meanwhile, Microsoft rose 0.65% Tuesday morning, on pace to add to a two-day win streak. 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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