Dow Jones Dives As GameStop Stock Explodes; Apple Stock Falls From Buy Zone

The Dow Jones Industrial Average was fighting for key support amid a broad stock market pullback. Meanwhile, short squeeze stocks GameStop (GME) and AMC (AMC) exploded higher. Apple (AAPL) fell from a buy zone, while Intel (INTC) and McDonald’s (MCD) were among the best blue chip performers.

Among EV stocks, Tesla (TSLA) was continuing to give up ground, even as Chinese rival Nio (NIO) moved to the top of a buy zone. General Motors (GM) also moved higher. It was a tough day for breakouts, but Oppenheimer (OPY) managed to pass a buy point.


Meanwhile, the cumulative number of confirmed coronavirus cases in the U.S. is approaching the 26.5 million mark, according to the Worldometer data tracker. The total of virus-related deaths is nearing 450,000.

Nasdaq, S&P 500 Lose Ground

The Nasdaq was the best performing major index, but was still down around 1.1%. Biogen (BIIB) was the best performer, gaining almost 9%. The biggest laggard was Charter Communications (CHTR), falling more than 6%.

The S&P 500 was down around 1.3%. As well as Biogen, Skyworks Solutions (SWKS) was a standout, turning in a gain of almost 8%. ResMed (RMD) and insurance stock Lincoln National (LNC) were the worst performers, surrendering almost 7% each.

Volume was lower than the same time Thursday. It plunged around 35% on the Nasdaq and tumbled by more than 27% on the NYSE. CAN SLIM investors prefer volume to be lower on a down day.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 30197.52 -405.84 -1.33
S&P 500 (0S&P5) 3737.65 -49.73 -1.31
Nasdaq (0NDQC ) 13174.79 -162.37 -1.22
Russell 2000 (IWM) 208.63 -0.09 -0.04
IBD 50 (FFTY) 43.70 -0.38 -0.86
Last Update: 11:50 AM ET 1/29/2021

It was a tough day for sectors, with most losing ground. Health and utilities were the only ones in positive territory.

Small caps managed to stand out from the crowd by posting gains. Nevertheless, the Russell 2000 reversed slightly lower.

Growth stocks were battered lower by the rampaging bears, with the Innovator IBD 50 ETF (FFTY) slipping around 0.5%. On the IBD 50, Ligand Pharmaceuticals (LGND) was the biggest laggard, down more than 5%. LGND stock remains extended from a cup base breakout. 

Apple Stock Struggles As Dow Jones Flounders

The Dow Jones Industrial Average was the worst performing index as it fell around 1.3%. The index is now testing its 50-day moving average. If it can successfully pull clear, it will be a bullish indicator.

Apple stock lost ground on a buy zone as it fell away from a cup-base buy point of 138.08. It has been managing to hold above a loss-taking zone however. The stock has a very strong Composite Rating of 94.

Intel was the index’s best performer Friday, rising about 1%. Nearest challenger McDonald’s only gained around 0.3%.

The biggest laggard was Johnson & Johnson (JNJ), with the conglomerate slipping almost 4%.

GameStop Stock, AMC Stock Explode

GameStop’s wild ride continued as retail investors once again sent the stock rocketing. It was up by almost 80%, but at its Friday peak rose by 114%.

It has been swinging wildly due to coordinated trading by retail investors using the WallStreetBets Reddit chat room. They were aiming to squeeze out short sellers who had shorted more than 100% of the stock’s float. Robinhood, Interactive Brokers and WeBull Financial have come under heavy criticism for blocking traders from buying the stock Thursday.

GME stock has seen its Relative Strength Rating soar to a perfect 99 amid the unnaturally powerful moves.

However, its dire EPS Rating of 7 out of 99 should set alarm bells ringing for investors.

Star investor Michael Burry, whose story was featured in “The Big Short,” previously took to Twitter to warn about the stock.

“What is going on now — there should be legal and regulatory repercussions,” he said in a now-deleted tweet. “This is unnatural, insane, and dangerous.”

Another stock targeted by retail investors is cinema chain AMC. It saw its share price soar more than 60%. At its Friday peak it was up 85%.

Tesla Stock Slips As Nio Stock Rises

IBD Leaderboard stock Tesla continued to slip following its earnings miss Wednesday. It was down around 2%. It had been trading tightly, but is falling lower.

Tesla stock still has a best-possible IBD Composite Rating of 99. Its stellar stock market performance is key. While it is giving up gains, it still is up more than 16% so far in 2021.

Meanwhile Chinese rival Nio posted a gain of almost 1%, but gave up some early gains. It has now risen back to the top of a buy zone. It broke out from a 57.30 buy point in a cup base two weeks ago.

Auto giant General Motors also rose, gaining around 0.4%. GM stock is pulling away after sinking close to a previous buy zone.

Nevertheless it has ceded some ground after reaching a profit-taking zone last week. It is down almost 8% this week.

GM stock got a boost after the company revealed plans to offer electric vehicles exclusively by 2035. It is part of a wider plan to make the Detroit automaker carbon neutral by 2040.

This Stock Breaks Out

Brokerage stock Oppenheimer managed to stage a breakout. It passed a flat-base buy point of 33.65, MarketSmith analysis shows.

A positive indicator for the breakout is that its RS line reached a new high. In addition, it pulled away from its 50-day line.

Oppenheimer stock has a strong Composite Rating of 95, out of 99. Earnings are a key strength, with its EPS Rating coming in at a rare perfect 99.

Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.


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