Dow Jones Futures Fall In Resilient Market Rally; Tesla Stock Falls On

Dow Jones futures fell modestly Monday morning, along with S&P 500 futures and Nasdaq futures. Crude oil prices rose as OPEC+ kept current crude oil production quotas. Tesla (TSLA) fell amid reports a big China production cut.

The stock market rally showed strength and resilience last week. The major indexes soared Wednesday in a bullish reaction to Fed chief Jerome Powell’s speech, with the S&P 500 retaking its 200-day moving average. On Friday, the S&P 500 tested and held that key level for a second straight session, despite a hot jobs report.

Investors could be increasing exposure incrementally, but the 200-day line is still in play. Don’t get too aggressive until there’s a decisive clearing of that long-term level.

OPEC+ Meeting

OPEC and key allies such as Russia agreed to leave oil production targets intact, after OPEC+ cut quotas by two million barrels per day at the October meeting. On Friday, European Union leaders set a $60 a barrel price cap on Russian crude, followed by other Group of Seven nations and Australia. The aim is to punish Moscow for the Ukraine war without cutting off Russian oil.

A few weeks ago, some OPEC+ members had mulled increasing production to offset a possible Russian production hit, and with U.S. Strategic Petroleum Reserve releases likely to slow or stop soon. But crude oil prices tumbled over the past month, amid China demand concerns. But they rose last week as Beijing is finally easing Covid curbs.

Early Monday, crude oil futures rose nearly 3%. Natural gas prices tumbled 7%.

Tesla Production Cut

Tesla (TSLA) sold a record 100,291 China-made electric vehicles in November, according to data released by the company. Many of those vehicles are being exported. But Tesla will cut Shanghai plant production by up to 20% as soon as this week, according to widespread reports. China demand has struggled to keep up with soaring output, even with late October price cut and various other incentives. Tesla, which had talked of building up European inventory to end the “delivery wave,” has not exported from Shanghai to Europe in the past few weeks.

Tesla stock fell 3%.

Dow Jones Futures Today

Dow Jones futures lost 0.5% vs. fair value. S&P 500 futures sank 0.5% and Nasdaq 100 futures fell 0.4%. Tesla stock is weighing on S&P 500 and Nasdaq 100 futures.

Hong Kong’s Hang Seng jumped 4.5% Monday, extending a recent rebound, as China starts to reopen its economy and ease Covid restrictions. The Chinese yuan rose past 7 yuan vs. the dollar for the first time since September.

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

Stocks To Watch

Dow Jones giant Boeing (BA), lithium giant SQM (SQM), Dexcom (DXCM), Cheniere Energy (LNG) and the Invesco Solar ETF (TAN) are all near buy points. Boeing, Dexcom, SQM stock and the TAN ETF — which includes First Solar (FSLR), Enphase Energy (ENPH) and many other top names — are actionable now. LNG stock has a new flat base.

Chip giants Taiwan Semiconductor (TSM) and Nvidia (NVDA) have rallied strongly over the past several weeks, closing in on their 200-day moving averages. Taiwan Semi and Nvidia stock back above the 200-day lines wouldn’t offer buying opportunities, but would be a positive sign for techs and the overall market rally. Chips almost always participate in last market uptrends, given their market heft and their key role in so many industries.

Meanwhile, EV chip play Allegro Microsystems (ALGM) is poised to break out Monday. ALGM stock and CubeSmart will join the S&P MidCap 400, S&P Dow Jones Indices announced late Friday.

Enphase and DXCM stock are on IBD Leaderboard. BA stock is on SwingTrader. ENPH stock is on the IBD 50. The TAN ETF was Friday’s IBD Stock Of The Day.

The video embedded in the article discussed the market action over the past week and analyzed Dexcom, LNG stock and the TAN ETF.

Earnings season is finally easing, while the economic calendar is less intense in the coming week.

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Stock Market Rally

The stock market rally had a strong week. The indexes’ gains were modest-to-solid but found support and broke above key resistance.

The Dow Jones Industrial Average edged up 0.2% in last week’s stock market trading. The S&P 500 index climbed 1.1%. The Nasdaq composite jumped 2.1%. The small-cap Russell 2000 1.3%.

The 10-year Treasury…