A follow-through day on Jan. 31 marked the start of an uptrend in the stock market indexes. Now Tesla, Nvidia and Microsoft have come off the lows they hit in January.
In a sign the nascent uptrend remains a work in progress, particularly for tech stocks, the Nasdaq trades well below its 200-day moving average. Plus, TSLA, MSFT and NVDA currently trade between their 200-day and 50-day lines.
Meanwhile, each of these growth stocks also earns a spot on IBD Leaderboard. They're joined by CF Industries, Cheniere Energy, and Vertex Pharmaceuticals.
See Who Joins TSLA, NVDA And MSFT On IBD Leaderboard
Trendlines, Moving Averages Key As Tesla, Nvidia, Others Find Their Footing
Cheniere Energy, the largest producer of liquefied natural gas (LNG) in the U.S., has reclaimed a 113.50 buy point in a flat base. But in the current volatile environment, trendlines — as opposed to more conventional entries — come into particular focus for some investors.
Even Cheniere entered the Leaders list when it broke above a trendline on Jan. 5. CF Industries is nicely above a trendline entry — an aggressive buy point.
A stock's action around key moving averages helps investors gauge both support and resistance as Tesla, Nvidia, Microsoft and others try to set up new moves.
A bullish earnings report lifted Microsoft back above its 200-day line, but it remains below its still-downtrending 50-day benchmark.
A positive report from industry peer Advanced Micro Devices gave Nvidia a boost last week. With quarterly earnings due Feb. 16, Nvidia is trying to retake its 21-day line on its way to reclaiming its 50-day moving average.
Tesla fell sharply after releasing Q4 numbers but rebounded off its 200-day line on Jan. 28 and has continued to climb. Tesla remains below its 21-day and 50-day benchmarks.
In addition to trendlines and moving averages, keep an eye on the relative strength line. The RS line provides crucial clues on how a stock stacks up against the overall market, as represented by the S&P 500. As the market tries to build momentum for the new uptrend, a rising relative strength line in names like Tesla, Nvidia and Microsoft would point to rising market leadership.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
