Dow Jones Futures: Market Risks Rise With 5 Stocks In Buy Zones

Dow Jones futures were little changed Sunday evening, along with S&P 500 futures and Nasdaq futures.

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The stock market rally continued to advance this past week, with the S&P 500 moving above 5,000 for the first time. The Nasdaq composite powered higher, briefly topping 16,000 and nearing all-time highs.

Several huge AI-related earnings gaps took place, including Arm Holdings (ARM), Palantir Technologies (PLTR) and Cloudflare (NET). Those reports also buoyed other AI- and cloud-focused chip and software stocks.

UiPath (PATH), a big Cathie Wood AI play, surged Friday, flashing buy signals. Samsara (IOT), another AI stock, also is in a buy area. SPS Commerce (SPSC) broke out, while Intra-Cellular Therapies (ITCI) and Shift4Payments (FOUR) are actionable.

But with the market rally looking extended, investors should be cautious about new buys.

Earnings season remains in force. Arista Networks (ANET), Cadence Design Systems (CDNS) and Medpace Holdings (MEDP) report Monday night, while Shopify (SHOP) and Datadog (DDOG) are due early Tuesday.

Arm stock and Shopify are on IBD Leaderboard. Cadence Design stock is on the IBD Long-Term Leaders list. Arm, Arista, Samsara, Cloudflare, Datadog and Intra-Cellular are on the IBD 50. Arista, Shopify, Datadog and Cadence Design are on the IBD Big Cap 20.

Other News

Diamondback Energy (FANG) is near a deal to buy rival Endeavor Energy, according to multiple reports Sunday. That would create another Permian shale giant.

Tesla (TSLA) cut prices on two Model Y variants by $1,000 through February, the EV giant announced Saturday.

Dow Jones Futures Today

Dow Jones futures were steady vs. fair value. S&P 500 futures and Nasdaq 100 futures lost a fraction.

The 10-year Treasury dipped to 4.18%.

Crude oil futures edged lower.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

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Stock Market Rally

The stock market rally had another solid week, with AI and other tech names leading the way.

The Dow Jones Industrial Average just gained a fraction in last week’s stock market trading. The S&P 500 index rose 1.4%, moving above 5,000. The Nasdaq composite popped 2.3%, briefly topping 16,000 level.

The small-cap Russell 2000 rebounded 2.4% in a big outside week after testing key levels. It closed above the key 2,000 level for the first time this year.

With Nasdaq and Russell 2000 picking up steam late in the week, more stocks flashed buy signals. Some were huge earnings gap-ups such as Palantir, but not all.

Still, the number of buying opportunities remains fairly modest, while many of the big leaders are greatly extended.

It’s definitely an AI-led rally. Not only are AI plays enjoying big gains, but tech titans are planning heavy spending to push ahead on artificial intelligence. That bodes well for AI chip and software plays, and those stocks reflect that.

Market leadership is broader than AI and tech, with housing, construction and industrial stocks faring well, as well as many travel, financial and health care names.

However, the Nasdaq is now 6.8% above its 50-day moving average. The tech-heavy composite could get more extended, but the risks of a pullback would continue to increase. Many AI leaders are becoming extremely extended.

The 10-year Treasury yield leapt 16 basis points to 4.19%.

U.S. crude oil futures jumped 6.3% to $76.84 a barrel last week.

Tesla Cuts Model Y Prices For A Limited Time — At Least For Now

ETFs

Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) rallied 2.9%, with PLTR, UiPath, SPS Commerce and Samsara in IGV. The VanEck Vectors Semiconductor ETF (SMH) surged 6.6%.

The SPDR S&P Metals & Mining ETF (XME) fell 2% last week. The Global X U.S. Infrastructure Development ETF (PAVE) popped 2.1%. U.S. Global Jets (JETS) ascended 2.9%. SPDR S&P Homebuilders (XHB) stepped up 2.7%. The Energy Select SPDR ETF (XLE) edged down 0.25%, and the Health Care Select Sector SPDR Fund (XLV) climbed 1.4%. The Industrial Select Sector SPDR Fund (XLI) rose 1.2%.

The Financial Select SPDR ETF (XLF) edged up 0.3%, and the SPDR S&P Regional Banking ETF (KRE) fell 1%.

Reflecting stocks with more speculative stories, the ARK Innovation ETF (ARKK) jumped 6.3% last week. ARK Genomics (ARKG) tacked on 4.3%. UiPath stock is a top-five holding across Cathie Wood’s ARK Invest.

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Stocks In Buy Zones

Samsara stock leapt 9.5% for the week to 35.47, rebounding from the 50-day line on Thursday and topping a 35.13 short-term high on Friday. IOT has a 36.91 official buy point, according to MarketSmith analysis.

SPS Commerce jumped 14.8% to 211.08 on Friday, racing past a 198.35 flat-base buy point. At this point, SPSC stock is extended, but investors can look for a pullback into the buy zone or perhaps a shelf or tight pattern. Late…