Dow Jones Fades Ahead Of Powell Testimony; Ferrari Overtakes Tesla As Leader; Apple Pops

Before testimony by Fed Chair Jerome Powell, Dow Jones Industrial Average lost its gains. Ferrari (RACE), a Ferrari-owned company, swept past Tesla (TSLA), to claim the top spot. Leaderboard stock MercadoLibre was a top blue-chip while Apple (AAPL), tested a new buy point.

There were several breakouts amid early bullish action, but the moves faded. Hubbell (HUBB), Deckers Outdoor (DECK) and Trane Technologies (TT) all tested entries.

The market now gets ready for crunch Congressional testimony from Powell Tuesday and Wednesday. The 10-year Treasury yield reversed higher, rising just over 1 basis point to 3.98%.

Stocks opened higher despite San Francisco Fed President Mary Daly saying that "further policy tightening, maintained for a longer time, will probably be necessary" at Princeton University Saturday. She is currently not a voting member of the Federal Open Market Committee.

Traders seem to be betting on two or three more quarter-point rate hikes in this round. A meaningful stock rally or a painful drawdown could lie ahead, depending largely on the Fed's goals.

Nasdaq Reverses As Small Caps Plunge

The Nasdaq fell and an attempt to rally in the last minute failed. It ended 0.1% lower. Dexcom (DXCM), which is a leader in continuous glucose monitoring devices for diabetics, was a notable mover and plunged 7.9%.

The S&P 500 managed to dig its claws in for a gain of 0.1%. Lumen Technologies (LUMN) did well here, rising 4.1%. But the stock is trading for just 3.30 a share, which means it is not worthy of consideration for CAN SLIM investors.

The S&P 500 sectors finished the day mixed. Technology and communication services fared best while materials and consumer discretionary lagged.

Small caps were pummeled by the bears, with the Russell 2000 falling 1.5%. Growth stocks saw gains for the day melt away, with the Innovator IBD 50 ETF (FFTY) closing down fractionally.

Dow Jones Today: Apple Stock Pops Amid Bullish Call

The Dow Jones Industrial Average briefly fell in late trading, before closing with a modest gain of 0.1%.

Apple stock was the top performer, rising 1.9% The 200-day moving mean is no longer being met by the stock.

After Goldman Sachs initiated it to buy with a 199 target, AAPL's comeback continued. Analyst Michael Ng stated that gross profit growth will be driven by the company's services business over the next five-years.

Merck (MRK), however, was today's Dow Jones performer. The Dow Jones rose 3.9% after the data was released on an experimental cholesterol pill.

Dow Inc. (DOW), Intel (INTC) and Boeing (BA) were among the worst laggards on the index. DOW fell 2.1%, INTC dipped 1.6% and BA fell 1.5%.

Leaderboard Stock Moves Above Entry

MercadoLibre also had a productive day with 2.4% growth. It reached a 1,250.58 purchase point. It held above this level, despite a late pullback.

On a weekly chart this qualifies as a flat base. On a daily chart it is more of a handle. Perhaps it is best described as a base-on-base formation.

MELI's bullish actions saw it awarded today's IBD50 Stocks to Watch selection. MercadoLibre, the largest ecommerce company in Latin America, is the most important. It continues to grow despite Amazon.com's (AMZN) competition.

The retail stock has been making progress since posting strong earnings last month. Exposure to MELI was increased on Leaderboard to take advantage of the bullish move.

Tesla Stock Loses RACE Amid Ferrari Pick

Ferrari may have lost out in the first F1 Grand Prix of the year on Sunday but it won in perhaps an even more important category.

The stock has been named the top U.S. auto industry stock pick, ahead of Tesla stock, according to Morgan Stanley (MS).

Analyst Adam Jonas said the Italian luxury sports car firm has overtaken the EV giant amid a "relatively bearish view on auto fundamentals."

Jonas says Ferrari has the longest order wait, the best earnings visibility and highest pricing power "of any company we cover".

Jonas is rating RACE stock as outperform with a 310 target. Ferrari stock ended the day down 0.4%. Nevertheless, it is trading near a 270.45 cup-with-handle entry, MarketSmith analysis shows.

Tesla stock fell 2%, losing ground on the 200-day line. TSLA is up more than 79% so far in 2023.

Outside Dow Jones: 3 Stocks Test Buy Points

It is important to track breakouts, as the market is now in an uptrend. Hubbell briefly crossed the cup-with-handle entry threshold of 256.53, but it reversed lower. The session ended 0.1% lower.

The electrical equipment play made the move in low volume. Overall performance is strong, with its IBD Composite Rating coming in at 93 out of 99.

Deckers Outdoor closed just above the flat-base buy point at 433.41 on its weekly charts, registering a 1.1% gain. A bullish sign is the rising relative strength line. Both earnings and price performance are very strong.

Trane Technologies tested a flat-base entry of 194.76 but reversed below this level. It finished the session down 1.1%.

The RS line is also at fresh highs. Big Money has been a net buyer of TT of late, with the stock's Accumulation/Distribution Rating coming in at B+.