Dow Jones futures rose modestly Monday morning, along with S&P 500 futures and Nasdaq futures, as China trade talks resumed. Last week the current stock market rally hit a wall but didn’t fall. Despite technical resistance and negative headlines, the major averages eked out weekly gains while top stocks outperformed. Shopify stock, Lululemon stock, Trade Desk stock, Five Below stock and Qualys stock are closed Friday just below buy points, with Shopify (SHOP) signaling a possible move above that entry. Shopify and Qualys (QLYS) report earnings this week.
Trade Desk (TTD), Five Below (FIVE) and Qualys stock boast best-possible IBD Composite Ratings of 99. Lululemon Athletica (LULU) has a 97 Composite Rating. Shopify stock has a good-but-not-great 85 Composite Rating, but Shopify earnings estimates are impressive.
Lululemon stock, Five Below stock and Trade Desk are all on the IBD 50 stock list.
Dow Jones Futures Today
Dow Jones futures climbed 0.25% vs. fair value. S&P 500 futures advanced 0.25%. Nasdaq 100 futures rose 0.4%. Remember that Dow futures and other overnight action don’t necessarily translate in actual trading in the next regular session.
Current Stock Market Rally
The current stock market rally hit a speed bump last week, but didn’t actually stop. The S&P 500 index and Nasdaq composite fell back from the 200-day line, retreating Wednesday and Thursday. But with a late Friday rally, the S&P 500 index, Nasdaq and Dow Jones edged higher for the week.
Even better for the current stock market rally, top stocks outperformed. The Innovator IBD 50 ETF (FFTY) rose 1.35% on Friday, matching a three-month closing high.
The stock market fell Thursday on China trade and global growth concerns. Lower-level China trade talks have resumed, with higher-level negotiations in Beijing later this week. While the current stock market rally held up well last week, if negotiations break down, expect a nasty Wall Street reaction. China trade deal progress could fuel the market rally and top stocks.
Separately, congressional talks on border security have broken down with government funding set to run out again on Friday.
Lululemon Stock Technical Analysis
Lululemon stock is in a cup-with-handle base with a 152.91 buy point. Shares are 2% below that entry. The relative strength line, which tracks a stock’s performance vs. the S&P 500, is just below a recent all-time high.
Lululemon stock is on the IBD Leaderboard watch list.
Shopify Stock Flirts With Buy Point
Shopify stock closed Friday at 175.94 just below a 176.70 buy point in a consolidation starting in July. Shares topped that entry Tuesday and Friday, but didn’t close above that level. Shopify rose 1.2% to 178 before Monday’s stock market open, signaling another move above that buy point.
The RS line is at highs.
Shopify stock was Wednesday’s IBD Stock of the Day. It’s also on Leaderboard’s watch list.
Shopify sets up e-commerce sites for small businesses. It turned profitable in the latter half of 2017, and Shopify earnings per share fell 20% to 4 cents in Q3 2018.
Q4 Shopify earnings are due Tuesday night. Analysts expect Shopify earnings to rise 33% to 20 cents a share, with revenue rising 47% to $327.9 million. Even better, Wall Street expects Shopify earnings to rise 150%, 450% and 275% in the next three quarters.
Trade Desk Stock Seeks To Reclaim Buy Point
Trade Desk stock is 2% below a 149.10 double-bottom entry. Shares of the online advertising platform provider broke out last Monday. But Trade Desk retreated with the stock market rally. At Thursday’s intraday low, shares were 7% below the buy point, so investors would have been justified in selling. But Trade Desk stock rebounded, closing Friday at 146.14.
Qualys Stock Runs
The Computer Software-Security group is rated No. 9 out of IBD’s 197 industries. CyberArk (CYBR) is slightly extended from a buy point, with earnings due Thursday. Palo Alto Networks (PANW) and Fortinet (FTNT) are building the right side of bases.
Qualys earnings are due Tuesday night. Analysts expect 25% Qualys earnings per share growth, slowing from the prior three quarters’ 80%, 50% and 58%. Worse, Wall Street sees Qualys earnings growing 17%, 15% and 0% in the next three quarters. But, Qualys earnings have topped views by 9% to 23% in each of the last four quarters.
Five Below Stock
Five Below stock is less than 1% below a 127.70 buy point in a cup-with-handle base. The RS line is at record highs.
Top Stocks Need Market Rally
Lululemon stock, Shopify stock, Trade Desk stock, Qualys stock and Five Below stock could clear buy points soon. But if the current stock market rally falters, top stocks likely will too.
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