Stock Price Today (February 2): Dow Jones Future Rally, GME Retreats From Record Gain

The stock market showed strong gains in afternoon trading Monday, after a rough week. After slumping 3.3% last week, the Dow Jones Industrial Average was up 1.1%. But the big leader was the Nasdaq 100, which jumped 2.7%. Top gainers in the Dow Jones today included Microsoft (MSFT), which jumped 4%. Nasdaq 100 winners included Google-parent Alphabet (GOOGL), which reports earnings Tuesday after the close along with fellow FANG stock (AMZN).

Alphabet is still in the 5% buy zone after reclaiming the 1,843.93 buy point. Amazon has been holding above its 50-day moving average after jumping back above the line on Jan. 20, according to Investors' Business Daily.

Dow Jones Futures rally as Biden, Republicans 'hopeful' for stimulus deal

After the close Monday, Dow Jones futures and S&P 500 futures rallied 0.35% apiece vs. fair value. Nasdaq 100 futures were up 0.6% vs. fair value. Remember that trading in Dow Jones futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session. Late Monday, President Biden met with a group of 10 Republican senators at the White House to discuss a bipartisan stimulus deal. After the meeting, Sen. Susan Collins said she was "hopeful" about a potential stimulus deal; however, concrete progress was not detailed.

Among the Dow Jones leaders, Apple (AAPL) rallied 1.6%, while Microsoft (MSFT) rose 3.3%. Apple stock remains below its recent buy point, while Microsoft is now just out of buy range.

Tesla (TSLA) recovered from Friday's 5% sell-off, racing 5.8% higher Monday. Among the Chinese EV leaders, Nio (NIO) fell further below its buy point, while Xpeng Motors (XPEV) remains far from its old highs. Both reported strong January sales. Li Auto (LI) is expected to report January sales in the near future.

Among top stocks in or near buy zones, AdaptHealth (AHCO) broke out past a new buy point and is in the buy range, while PayPal (PYPL) continued to rebound from its key 50-day support level. Meanwhile, ServiceNow (NOW) is just under its own buy point.

Apple, Microsoft, PayPal, and Tesla are IBD Leaderboard stocks. AdaptHealth was Monday's IBD Stock Of The Day, while ServiceNow was featured in this week's Stocks Near A Buy Zone.

Friday's Big Picture commented, "The major stock indexes experienced a sharp sell-off Friday, ending the week on a down note. Top growth stocks were hit hard and the Nasdaq fell through a key support level, resulting in a stock market downgrade."

Due to the recent weakness, it would be a great time to play some defense. Weakness can snowball, so it's usually best to get off margin to avoid outsize losses. Meanwhile, you can reduce some exposure by cutting positions that show a loss after recently breaking out. 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 rebound.

Stock Price Today (February 2): Dow Jones Future Rally, GME Retreats From Record Gain
Photo: Investors

Stock Price Today - Chinese EV Leaders: Li Auto, Nio, Xpeng Motors

Li Auto is expected to announce its January sales in the coming days. Li Auto stock is trading below its 50-day line, about 33% off its 52-week high. Early Monday, Nio and Xpeng Motors reported strong January sales numbers.

In January, Nio grew sales 352% to 7,225 electric vehicles. Nio stock reversed from early gains to edge lower Monday. Shares are below their 57.30 buy point in a cup base. Meanwhile, Xpeng Motors grew sales 470% to 6,015 electric vehicles. Xpeng stock rallied 2.3% Monday.

ETF Action

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) outperformed with a 3% gain. Top gainers in the IBD 50 index of leading growth stocks included chip-equipment firms Applied Materials (AMAT) and ASML (ASML), along with Generac (GNRC) and Trade Desk (TTD).

The Innovator IBD Breakout Opportunities ETF (BOUT) picked up 3.2%. Top holdings include MarineMax (HZO), Varonis Systems (VRNS), Etsy (ETSY), Crocs (CROX), and Leaderboard stock Pinduoduo (PDD). Pinduoduo is tracked in the same industry group as Alibaba (BABA), which reports earnings Tuesday before the open.

Stock Price Today (February 2): Dow Jones Future Rally, GME Retreats From Record Gain
Photo: Investors

Tesla stock gets a price-target hike

IBD Leaderboard stock Tesla snapped a three-day losing streak Monday, racing nearly 6% higher. Ahead of the stock market open, Piper Sandler upped its Tesla stock price target from 515 to 1,200.

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's stock hit a record high at 900.40. Shares are about 80% above a 466 buy point in a cup with handle amid Monday's action.

Stock Price Today (February 2): Dow Jones Future Rally, GME Retreats From Record Gain
Photo: Investors

Stock Market Movers

Among the day's movers, ZoomInfo (ZI) joined Leaderboard in the morning when it broke out over the 50 levels. Shares were up 4% to 49.90.

Thermo Fisher Scientific (TMO) topped a cup-with-handle buy point of 519.10 after reporting strong earnings before the open. But the stock was off session highs and below the buy point in late trading

Chinese electric car maker and MarketSmith Growth 250 name Nio (NIO) reversed lower despite news that January deliveries surged 352% from the year-ago period. Nio is trading near its 21-day exponential moving average and just below a prior 57.30 entry.

The iShares Expanded Tech Sector Software ETF (IGV) added 2.4% to 357. IGV is holding support at the 50-day moving average as it forms a flat base with a 366.13 buy point. The buy point was derived by adding 10 cents to IGV's Dec. 23 intraday high. In other ETF news, the iShares Silver Trust (SLV) soared out of a 25-week consolidation, rising 7% to 26.82. But the ETF was off session highs after topping its all-time high of 27.39. Other big gainers in the silver space included First Majestic Silver (AG), up 18%, and Pan American Silver (PAAS), up 11%.

Stock Price Today (February 2): Dow Jones Future Rally, GME Retreats From Record Gain
Photo: Market Watch

GameStop stock retreats from record gains after more than half of short positions eliminated

The GME stock short squeeze faltered Monday, as shares plunged nearly 31% to give back a large portion of Friday's 67% surge. GameStop (GME) stock slipped as much as 23% before paring some losses in extended trade Monday.

Robinhood continues to limit purchases in short-squeeze targets, like GameStop and AMC Entertainment (AMC). Robinhood customers could only buy one share of GameStop early in the short squeeze, and five options contracts. However, Robinhood raised that to 20 shares on Monday, CNBC reported.

Last week, GameStop’s stock soared 400% in an extremely volatile trading week where retail investor loyalists of the stock assembled via the Reddit WallStreetBets thread to clash with institutional short-sellers on Wall Street. The number of GameStop shares shorted fell by 35.2 million over last week, leaving 27.1 million short positions remaining, or a drop of 56%, according to S3 data. Shorts have lost about $13 billion in 2021 alone on GameStop even after gaining about $2 billion Monday, Dusaniwsky said when the stock was down 22% during Monday’s session.

Meanwhile, the stock most likely to be said in the same breath as GameStop, AMC Entertainment Holdings Inc. AMC, +0.30%, had traded up as much as 30% Monday but closed up 0.3% at $13.30 as one analyst downgraded the stock to a sell rating and cut their price target to $1. After hours, the stock was down another 13%. A new addition to the Reddit treatment was the iShares Silver Trust SLV, +7.08%, which had gained as much as 12% Monday, finished up 8% at $26.98.

On the other hand, shares of other-heavily shorted stocks like GameStop were logging sizable losses Monday. Stocks like Naked Brand Group Ltd. NAKD, -13.94%, Bed Bath & Beyond Inc. BBBY, -14.35%, National Beverage Corp. FIZZ, -13.17%, SunPower Corp. SPWR, -9.85%, and Macerich Co. MAC, -10.76% closed down 10% or more Monday.

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