The Dow Jones Industrial Average fell more than 150 points early Wednesday before erasing losses, as GME stock looked to rebound from two straight days of huge losses amid the ongoing short squeeze. Tesla stock is eyeing record highs, while Apple is again approaching a buy point. Tech giants Alphabet and Amazon moved on earnings, while Spotify dived 8% Wednesday morning.
Among the Dow Jones leaders, Apple was down 0.7%, while Microsoft rallied 1.4% in today's stock market. Nike is approaching a new buy point after a bullish move Tuesday.
Tesla threatened to snap a win streak Wednesday with a 2% fall. Tesla stock is near a new high, but easing after two straight days of strong gains.
FANG stocks Amazon.com and Alphabet were sharply mixed after reporting strong earnings results late Tuesday. Spotify tumbled on earnings results, while PayPal will report after the stock market close.
Among top stocks in or near buy zones, Palo Alto Networks and ServiceNow are in buy range after Tuesday's breakouts.
Short-squeeze target GameStop rebounded as much as 26% before paring gains, while AMC Entertainment leapt as much as 13.7% at the open before cutting gains.
Apple, Microsoft, PayPal and Tesla are IBD Leaderboard stocks. ServiceNow was featured in this week's Stocks Near A Buy Zone.
Dow Jones Today
On Wednesday, the Dow Jones Industrial Average traded flat, while the S&P 500 moved up 0.2%. The tech-heavy Nasdaq composite also rallied 0.2% in midday trade.
Among exchange traded funds, Innovator IBD 50 traded up 0.3% Wednesday. Nasdaq 100 tracker Invesco QQQ Trust ETF rose less than 0.1%. Meanwhile, the SPDR S&P 500 ETF moved up 0.1%.
Stock Market Pulls Back, 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, the start of February has the Dow Jones Industrial Average, Nasdaq and S&P 500 finding support near key levels during the current pullback.
Tuesday's Big Picture offered more optimism after two straight days of big stock market gains, "After rebounding for two days, the stock market finds itself on better footing, and investors can breathe a little easier."
Due to the recent strength, investors can shift back to an offense stance, with an understanding that there are still good reasons for caution. Look for stocks that are breaking out above new buy points, like Palo Alto Networks and ServiceNow.
Focus on stocks that showed strong relative strength during last week's sell-off. They could be some of the market's leaders if the indexes are able to continue their rebounds.
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Dow Jones Stocks: Nike
Dow Jones stock Nike is tracing a new flat base with a 148.05 buy point, according to IBD MarketSmith chart analysis. The stock moved down 0.6% Wednesday.
Shares of the retailer recently reclaimed their 50-day moving average line, and are about 6% off their 52-week high.
Amazon: CEO Bezos Steps Down
Late Tuesday, Amazon earnings and sales easily beat the Street's estimates. Meanwhile, CEO Jeff Bezos will hand off his role as chief executive to Andy Jassy, the CEO of its cloud computing unit, in the third quarter of 2021.
Amazon stock reversed 0.2% lower in morning trade, as it approaches a 3,496.34 buy point in a consolidation pattern.
Alphabet Earnings
FANG stock leader Alphabet reported fourth-quarter earnings and revenue Tuesday that crushed estimates as its core search advertising business rebounded amid the coronavirus pandemic.
Shares jumped nearly 7% Wednesday morning and are extended beyond the 5% buy zone past a 1,843.93 buy point in a flat base.
Spotify Earnings
Spotify stock tumbled 8% early Wednesday after the company beat Wall Street's targets for subscribers and total users in the fourth quarter. But its earnings and outlook disappointed.
Shares of the streaming music and podcast service are testing their 50-day support level.
PayPal Earnings
IBD Leaderboard stock PayPal will report earnings after the close Wednesday. The payment processor is expected to earn $1.00 a share on revenue of $6.08 billion. Shares moved up 0.5% in morning trade.
PayPal stock has been rebounding from its 50-day moving average line since testing that level on Jan. 27.
Stocks To Watch: Palo Alto, ServiceNow
Cybersecurity leader Palo Alto Networks is in the 5% buy area past a 375.10 buy point in a flat base. The 5% buy zone goes up to 393.86. Shares rallied 0.1% early Wednesday.
ServiceNow is in the 5% buy zone above a 566.84 buy point in a flat base, according to IBD MarketSmith chart analysis, following Tuesday's breakout move. Shares moved down 1% Wednesday morning.
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.
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GME Stock Short Squeeze
The GME stock short squeeze looked to regain its momentum Wednesday morning, as shares rallied as much as 26%. GME stock slashed gains to about 12% in morning trade. Through Tuesday's close, GME stock had crashed 72% this week.
Among other short-squeeze targets, AMC stock cut gains to 10% in morning trade, and remains about 60% off its recent high.
Tesla Stock
IBD Leaderboard stock Tesla looked to give back a portion of Tuesday's 3.9% advance, falling about 2% Wednesday morning. Shares are just 2% away from all-time highs.
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 last week.
On Jan. 25, Tesla stock hit a record high at 900.40. Shares are about 87% above a 466 buy point in a cup with handle amid Wednesday's action.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple moved down 0.7%, and remains below its 138.89 buy point in a cup with handle. Shares gave up the entry during last week's sharp weakness.
Meanwhile, Microsoft advanced 1.4% Wednesday morning, rebounding from Tuesday's 0.1% fall.
Shares of the software giant broke out past a 228.22 buy point in recent sessions. The stock is extended past 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.
