The Dow Jones Industrial Average tumbled 400 points Friday, as the price of Bitcoin surged after Tesla CEO Elon Musk updated his Twitter bio. GME stock rocketed as much as 113% after Robinhood eased buying restrictions.
Apple, Microsoft, PayPal and Tesla are IBD Leaderboard stocks.
Dow Jones Today
On Friday, the Dow Jones Industrial Average traded down 1.5%, the S&P 500 fell 1.4%. The tech-heavy Nasdaq composite lost 1.25% in midday trade.
U.S. Stock Market Today Overview
Last Update: 10:40 AM ET 1/29/2021
Stock Market Rally Finds Support
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, toward the end of January, the Dow Jones Industrial Average, Nasdaq and S&P 500 are finding support at key support levels during the recent pullback.
Thursday’s Big Picture commented, “The Nasdaq rebounded from its 21-day line, which has been a support level for the Nasdaq since the index’s follow-through day in early November. The Dow 30 found much-needed support at its 50-day moving average.”
Investors should continue to use the stock market’s strength to buy breakouts. Be patient and wait for powerful breakouts instead of chasing extended stocks. If the new breakouts work, then add more exposure. But if breakouts start to fail, then you can back away.
In particular, focus on stocks with strong relative strength. Find them 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: IBD Long-Term Leaders
Stocks to watch include IBD Long-Term Leaders, companies with stable earnings growth and price performance. Veeva Systems (VEEV) is the latest addition to the list, as it tries to break out past an early entry at 292.90, while the conventional buy point remains at 314.09.
Elsewhere in the IBD Long-Term Leaders, Thermo Fisher Scientific (TMO) is trying to break out above a 519.10 buy point in a cup with handle.
The price of Bitcoin soared about 15% early Friday to $37,200, according to Coindesk, after Tesla CEO Elon Musk updated his Twitter bio to “#bitcoin.” The price of Bitcoin topped out Friday at $38,020, about $3,900 shy of its all-time high of $41,940.
The Grayscale Bitcoin Trust ETF surged about 12% Friday morning, as it continues to rebound from the 50-day support level.
Dow Jones Earnings: Visa
Dow Jones stock Visa reported strong fiscal-Q1 results late Thursday. The company reported EPS of $1.42 on revenue of $5.69 billion.
Shares of the payment processor moved down 0.2%, as they look to rebound from their long-term 200-day line. A December breakout above a 217.75 buy point in a flat base failed when the stock fell more than 7% below the entry, according to IBD MarketSmith chart analysis.
Stocks To Watch: Palo Alto, PayPal, ServiceNow
According to Leaderboard commentary, “PayPal is trading below a new alternate entry (244.35) and making its first test of the 10-week moving average in 2021.”
ServiceNow is approaching a 566.84 buy point in a flat base, according to IBD MarketSmith chart analysis. Shares skidded nearly 3% early Friday.
According to IBD Stock Checkup, NOW stock shows a strong 96 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.
GME Stock Short Squeeze
The GME stock short squeeze continued Friday morning, as shares skyrocketed more than 113%, recovering from Thursday’s 44% plunge. Shares trimmed gains to about 73% in morning trade. Meanwhile, AMC stock soared 65%, but is still far from Wednesday’s peak price of 20.36.
Late Thursday, Robinhood amended its ban on purchases, saying in its blog, “Starting tomorrow, we plan to allow limited buys of these securities. We’ll continue to monitor the situation and may make adjustments as needed.”
IBD Leaderboard stock Tesla threatened to extend a two-day losing streak, dropping 1.5% Friday morning. Shares are about 7% off their all-time high.
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 on Monday.
On Monday, Tesla stock hit a record high at 900.40. Shares are about 80% above a 466 buy point in a cup with handle amid Friday’s action.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple fell over 3% Friday to drop further below its 138.89 buy point in a cup with handle. Shares gave up the entry amid Thursday’s 3.5% fall.
Meanwhile, Microsoft dropped over 1.5% Friday morning, on pace to snap an eight-day win streak.
Shares of the software giant broke out past a 228.22 buy point in recent sessions. The stock is in the 5% buy zone that goes up to 239.63.
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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