The Dow Jones Industrial Average briefly rallied 125 points Monday, as the stock market rally looked to kick off 2022 on a positive note. Tesla stock surged 10% on blowout deliveries. Chinese EV leaders Li Auto, Nio and Xpeng Motors also reported strong deliveries over the weekend.
XAmong the Dow Jones leaders, Apple (AAPL) rose 1.7% Monday, while Microsoft (MSFT) moved down 0.4% in today's stock market. Also among the Dow 30, Home Depot (HD) continues to rebound from support, while Nike (NKE) aimed to retake a key level.
Electric-vehicle leader Tesla (TSLA) traded up 10% Monday. Its rival, Rivian (RIVN), was down over 2%. Lucid Group (LCID) climbed around 2%. And Chinese EV leaders Li Auto (LI), Nio (NIO) and Xpeng Motors (XPEV) were sharply mixed Monday morning after their December sales reports over the weekend.
Among Monday's top stocks to buy and watch, Applied Materials (AMAT), Datadog (DDOG), Fortinet (FTNT), Huntsman (HUN) and Icon (ICLR) are in or near new buy zones.
Icon, Microsoft and Tesla are IBD Leaderboard stocks. Datadog is an IPO Leader. Fortinet was featured in last week's Stocks Near A Buy Zone column. Applied Materials is an IBD SwingTrader stocks. Huntsman was Wednesday's IBD Stock Of The Day.
Dow Jones Today
After the stock market open Monday, the Dow Jones Industrial Average rose 0.15%, while S&P 500 moved up 0.2%. The Nasdaq rose 0.4% in morning trade.
Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) gained 0.1% Monday, while the SPDR S&P 500 ETF (SPY) traded up 0.1%. Chip stocks were strong performers Monday morning, and the iShares Semiconductor ETF (SOXX) rose 1%. Chip giant Taiwan Semiconductor (TSM) rose about 4% Monday.
Elsewhere, the 10-year Treasury yield ticked up to near 1.59% Monday morning, following a fall to near 1.51% Friday.
Benchmarks in Frankfurt and Paris rose more than 1% near midday in light, post-holiday trade. Markets in London, Tokyo and Shanghai remained closed on holiday.
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Stock Market Rally
The stock market closed out 2021 with mild, weak action on Friday. That extended the tech-heavy Nasdaq composite's losing streak to four sessions. The Dow Jones Industrial Average and S&P 500 fell for a second straight day.
Despite the weakness, the market outlook remains in a "confirmed uptrend." This gives investors a green light to buy top-rated growth stocks breaking out past correct buy points.
Friday's The Big Picture commented: "Investors should show prudence going into the new year, but there is reason for optimism. History shows that when the S&P 500 gains 20% or more in a calendar year it averages a gain of 7.7% the next, according to Dow Jones market data. In addition, the median return in the following year is a gain of 10.2%."
For daily stock market commentary, check out IBD's The Big Picture.
IBD's 2022 Stock Market Forecast
Dow Jones Stocks To Watch: Home Depot, Nike
Home Depot stock advanced 1.2% Friday, nearing a record high. Home Depot was the No.1 Dow Jones performer in 2021, up 56.2% for the year. (The No. 2 Dow Jones stock was Microsoft with a 51.2% advance.) HD shares were up 0.1% Monday.
Dow Jones retail leader Nike is tracing a new flat base that has a buy point at 179.20, according to IBD MarketSmith chart analysis. Shares fell further below their 50-day line during Friday's 0.5% decline, as they fight to decisively move above that resistance. Nike shares gained 0.4% Monday.
Four Top Growth Stocks To Watch In The Current Stock Market Rally
Stocks To Buy And Watch: Applied Materials, Datadog, Fortinet
IBD SwingTrader stock Applied Materials retreated back below a 159.10 buy point in a flat base during Friday's 0.4% loss. The initial breakout occurred in weak volume, but remains in play. Look for a volume increase of at least 40% if and when the stock retakes its buy point. The 5% buy area runs up to 167.06. Applied shares were up 1.1% Monday.
IPO Leader Datadog is approaching a cup base's 199.78 buy point. Meanwhile, resistance around the 186 price level could provide an early entry for aggressive investors. Shares lost 0.5% Friday, as they pull back to their key 50-day moving average. DDOG shares gained 1% Monday.
Cybersecurity leader Fortinet remains in the 5% buy area above a 355.45 buy point in a consolidation despite Friday's 0.1% loss. The buy area tops out at 373.22. Bullishly, the stock's relative strength line hit a new high on the breakout day, confirming the stock as a market leader. The RS line measures a stock's price performance vs. the S&P 500. Fortinet shares were up 0.3% Monday.
IBD Leaderboard stock Icon is still in buy range past a 301.82 buy point in a consolidation, according to IBD MarketSmith chart analysis, in the wake of the Dec. 22 breakout move. The 5% buy area runs to 316.91. Per Leaderboard commentary, Icon also cleared resistance around 290, which served as an early entry. The stock was up 0.3% early Monday.
Wednesday's IBD Stock Of The Day, Huntsman, remains in buy range past a 34.57 flat-base entry following Friday's 0.35% gain. The 5% buy range goes up to 36.30. HUN stock shows an 89 out of a perfect 99 IBD Composite Rating, according to the IBD Stock Checkup. Huntsman stock rose 1.4% Monday.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
EV Stocks: Li Auto, Nio, Xpeng, Lucid Motors, Rivian
Over the weekend, Chinese EV leaders Li Auto, Nio and Xpeng Motors reported their December deliveries.
Li Auto delivered 14,087 Li One hybrid SUVs in December, up 130% year over year. Q4 deliveries reached 35,221, above its 30,000-32,000 target and Q3's 25,116. The stock dropped nearly 1% Monday.
LI stock continues to work on a new base, after triggering the 7%-8% loss-cutting sell rule below a cup-with-handle base's 34.93 buy point in early December. Shares surged above their 50-day moving average last week, which is bullish price action as the stock looks to build the right side of a new base.
Nio delivered 10,489 vehicles, up 49.7% year over year, but down slightly from November's 10,878. NIO stock rose about 2% Monday. Shares closed Friday about 53% off their 52-week high and sharply below their 50- and 200-day moving averages.
Xpeng deliveries surged 181% to 16,000 vehicles last month, a new record after November's 15,613. Shares moved down over 2% Monday.
XPEV stock activated a round-trip sell signal from a 48.08 buy point during early December's sharp sell-off. Xpeng shares surpassed resistance around the key 50-day moving average Thursday, jumping 10%. There is no valid buy point yet, but Thursday's action was a step in the right direction.
Among U.S.-based EV stocks, Lucid Motors shares climbed around 2% Monday, looking to recover from Friday's 1.8% decline. LCID stock remains extended past a 28.49 buy point in a cup-with-handle base, but huge gains have faded. Shares are setting up for another try to retake the 50-day line, which would be a positive for the stock's consolidation.
Recent initial public offering Rivian was down over 2% Monday, on pace to add to Friday's 0.3% gain. RIVN shares closed Friday about 42% off their post-IPO highs. Continue to wait for an IPO base to form before considering a purchase. Recent sharp losses are a significant setback in the stock's basing process and there is no new buy point in sight.
Five Best Dow Jones Stocks To Watch Now
Tesla Stock
Tesla stock surged 10% Monday, looking to snap a four-day losing streak. On Sunday, Tesla deliveries totaled 308,600 deliveries in Q4. That included 296,850 Model 3 and Y vehicles and 11,750 Model S and X luxury EVs. For the full year, Tesla said annual vehicle deliveries surged 97% in 2021, delivering 936,172 vehicles.
Early Monday, Tesla shares rose above 1,119.10 buy point. The buy point is based on a combination of factors — the stock is rebounding from 50-day support and cutting back above a downward sloping trendline. The 10% buy area will top out at 1,162.46.
There is also an alternative buy point, based on a short handle, at 1,119.10. That buy zone extends to 1,175,06.
Shares traded as high as 1,243.49 on Nov. 4, but the stock ended Friday about 15% off its 52-week high.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple stock ended Friday down 0.35%, but remains about 16% above a 153.27 buy point out of a cup-with-handle base, according to IBD MarketSmith chart analysis, and close to the 20%-25% profit-taking level. AAPL shares rose 1.7% Monday.
Software leader Microsoft decisively regained its 50-day line in recent weeks, as the top Dow Jones stock approaches a flat base's 349.77 buy point with an early entry at 343.89. Shares moved down 0.4% Monday, adding to Friday's 0.6% decline.
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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