Dow Jones Futures Rise On China Trade News: AMD Nears Buy; Altaba To Liquidate Alibaba Stake; Tesla In Focus

Dow Jones futures turned modestly higher late Tuesday, along with S&P 500 futures and Nasdaq futures, on a report that a China trade deal is close. In late trading, Advanced Micro Devices (AMD) moved toward a buy point on bullish analyst comments, but AMD stock has flaws. Meanwhile, Altaba (AABA) plans to liquidate, selling off its 15% stake in Alibaba (BABA). Altaba stock rose while Alibaba stock fell. Finally, investors were keeping a close eye on Tesla stock. Tesla (TSLA) should release first-quarter delivery and production figures between now and the end of Wednesday.

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Dow Jones Futures Today

Dow Jones futures rose 0.2% vs. fair value, reversing modest losses. S&P 500 futures climbed 0.25%. Nasdaq 100 futures advanced 0.5%. Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

U.S. and Chinese negotiators have resolved most of the sticking points to a trade deal, though some enforcement issues remain, the Financial Times reported Tuesday night. President Donald Trump had said Tuesday afternoon that China trade talks were going well, but investors have heard such comments for several weeks.

Current Stock Market Rally

Tuesday was a mixed stock market session, but the Nasdaq composite rose 0.25%, hitting a 2019 high intraday. The Dow Jones fell 0.3% as Walgreens Boots Alliance (WBA) tumbled 13% on weak earnings and guidance. The S&P 500 index was flat.

Growth stocks largely moved with the market. Among top ETFs, the Innovator IBD 50 ETF (FFTY) edged up 0.4% to 33.91, still in buy range from a cup-with-handle entry at 33.58. The iShares Nasdaq Biotechnology ETF (IBB) rose 0.8% to 112.82, working toward its own handle buy point of 116.35.

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AMD Stock

AMD stock rose 1.7% to 27.21 in extended trading. After the close, Nomura initiated AMD stock with a buy rating and a 33 price target.

In Tuesday’s session, AMD stock rose 1.5%, its fourth straight up day. Shares are closing in on a 28.21 cup-with-handle buy point. However, the consolidation is 53% deep. Bases that are at least 40% deep are less likely to have successful breakouts.

AMD’s relative strength line has trended higher since late October, but is still well off record highs.

Ideally, AMD would form a short flat base or other proper pattern within the larger consolidation. Amazon.com (AMZN) and Wynn Resorts (WYNN) recently cleared such flat bases within deep patterns.

Altaba To Sell Alibaba Stock Stake

Altaba, which holds assets from the former Yahoo, plans to liquidate, notably its 15% stake in Alibaba. The fund expects to distribute $76.62 to $79.22 per Altaba share. That assumes an Alibaba stock price of 177.

Alibaba stock closed Tuesday up 0.5% to 181.74, but fell 1.4% late on the Altaba news. Shares of the Chinese e-commerce giant are working on a 188.18 cup-with-handle base that’s 39% deep.

Altaba stock edged up 0.4% to 74.23 in extended trade after rising 2% or more at one point.

Altaba needs shareholder approval for the Alibaba stock sale and overall liquidation.

Tesla Deliveries Data Due

Tesla stock rose 0.5% late on no news. But the luxury electric vehicle maker’s bulls and bears were keeping a close eye. Tesla deliveries for the first quarter were expected to come in at 77,000 vehicles, including 55,000 Model 3 sedans. Analysts have cut Tesla delivery forecasts in recent weeks.

Tesla stock closed down 1.1% Tuesday to 285.88. Shares are up over the last several sessions but still in a downtrend going back to Dec. 7. Tesla stock’s RS line isn’t far above multiyear lows.

On Thursday, the SEC and Tesla CEO Elon Musk face off in court. The watchdog agency wants Musk held in contempt for violating a late-2018 settlement agreement that he get all his tweets cleared by Tesla.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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The post Dow Jones Futures Rise On China Trade News: AMD Nears Buy; Altaba To Liquidate Alibaba Stake; Tesla In Focus appeared first on Investor's Business Daily.

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