Bitcoin, Tesla in focus after first civil agreement gives a mixed stock market

Dow Jones futures were little changed before Tuesday’s open after the Dow Jones Industrial Average rose 194 points on Monday. Bitcoin fell more than 3% after cryptoexchange Binance and its CEO Changpeng “CZ” Zhao were sued by the Commodity and Futures Trade Commission (CFTC). Meanwhile, Tesla shares rose on Wall Street’s record forecasts for the EV giant’s first-quarter deliveries.

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The CFTC sued Binance, alleging that the world’s largest cryptocurrency exchange violated US rules that require futures and other derivatives to be traded on regulated platforms.

The price of Bitcoin fell about 3.3% on Monday, trading around $27,000 in late-day trading. Bitcoin to crash in 2023, up more than 65% so far this year, according to Coindesk. Cryptocurrency exchange Coin base (COIN) fell nearly 8%, ending right at the 50-day line.

The stock market today

The stock market had an early rise the following Monday First Citizens BancShares (FCNCA) purchased large portions of FDIC-controlled Silicon Valley Bank. First Republic Bank (FRC) jumped almost 12% on hopes of a solution to the banking crisis.

First Citizens shares surged 53% Monday, with the SPDR S&P Regional Bank ETF ( KRE ) climbing 0.9%. Among the major US banks, JPMorgan Chase (JPM) and Citigroup (C) rose 2.9% and 3.9% respectively.

But the major stock indexes finished mixed, with the Dow Jones Industrial Average rising 0.6%. The S&P 500 rose 0.2%, while the technology-heavy Nasdaq composite fell 0.5%.

Electric vehicle giant Tesla (TSLA) traded up 0.7% on Monday. Among Dow Jones stocks, apple ( AAPL ) fell 1.2% and Microsoft (MSFT) fell 1.5% in today’s stock market action.

Adjust technology (ALGN), IBD SwingTrader stock Meta platforms (META) and IBD Leaderboard Palo Alto Networks (PANW) – as well as Dow Jones stocks Cisco Systems (CSCO) and Nike (NKE) — is among the best stocks to watch in the ongoing stock market correction.

Palo Alto is an IBD Leaderboard stock. Cisco was featured in this week’s Stocks Near a Buy Zone column. And Meta is an IBD SwingTrader stock. Palo Alto, Align, Microsoft and Meta were all recent IBD Stock Of The Day subjects.

3 top growth stocks to buy and watch nowrent stock market correction

Dow Jones Futures Today: Oil prices, Treasury yields

Ahead of Tuesday’s opening bell, Dow Jones futures, S&P 500 futures and Nasdaq 100 futures were little changed relative to fair value in overnight trading. Keep in mind that overnight action in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular trading session.

The 10-year US Treasury yield rose to 3.52% on Monday, recovering from last week’s losses. Oil prices rose more than 5% on Monday, with West Texas Intermediate futures trading at $73 a barrel.

IBD’s latest newsletter, MarketDiem, brings you actionable ideas for stocks, options and crypto straight to your inbox.

What to do in the ongoing stock market correction

Now is an important time to read IBD’s The Big Picture column with the stock market trending still in a “market in correction” amid volatile action in recent weeks.

With the market in correction, investors should mostly, if not completely, be on the sidelines until a follow-up day triggers another uptrend. Now is a good time to build a robust watchlist of stocks in leading groups.

(Check out IBD stock lists like the IBD 50 and Stocks Near a Buy Zone for more stock ideas.)

Five Dow Jones stocks to watch now

Dow Jones stocks to watch: Cisco Systems, Nike

Cisco Systems is quickly approaching the flat base buy point at 51.84, according to IBD MarketSmith pattern recognition. Bullishly, the stock’s relative strength line reached a new high last week, a sign of excess returns in the stock market. CSCO shares rose 0.1 percent on Monday.

Nike shares continue to track a flat base that has a buy point at 131.41 amid the stock’s recent decline. The stock is trying to regain its 50-day line, which is a key level to watch. The NKE share fell 2.4 percent on Monday.

Top stocks to watch: Align, Meta, Palo Alto

Align Technology continues to track a consolidation that has multiple buy points: an early entry at 357.10 and a conventional entry at 368.97. ALGN stock is looking for support around its 50-day moving average. If the stock breaks this level, further weakness is expected.

Back story: The company makes clear teeth straightening systems called Invisalign. UBS analyst Kevin Caliendo says investors have recently regained confidence in Align stock, which is up 50% this year. December-ended quarterly results from Align and its competitors, management comments, US economic data and a recent increase in demand for Invisalign cases support this view, he said in a note to clients.

Back story: Like its social media rivals, Meta is struggling due to a sharp reduction in ad revenue as clients reel over macroeconomic concerns, recession fears and higher interest rates. This comes as it spends billions of dollars in a risky effort to build the “metaverse,” a virtual reality world that has yet to catch on.

IBD Leaderboard stock Palo Alto Networks continues to trade above and below its 192.94 buy point out of a cup with handles amid Monday’s 0.5% gain. The buy range will run up to 202.59 if the stock retraces its entry.

Back story: Through acquisitions, Palo Alto Networks has expanded into endpoint security and vulnerability management. Endpoint tools detect malware on laptops, mobile phones and other devices that access corporate networks.

Join IBD experts as they analyze leading stocks in the current stock market correction on IBD Live

Tesla shares

Tesla shares rose 0.7% on Monday, as it continues to see some support around its 50-day moving average. Shares closed Monday about 50% off their 52-week high.

Tesla’s first-quarter deliveries, due in early April, are expected to set another record, prompting analysts to say Monday that if the global electric car giant beats estimates, Tesla shares could take a hit. But Wall Street predicts that Tesla’s 2023 earnings per share will shrink compared to 2022.

As Tesla prepares to release delivery and production data for the first quarter of 2023 in early April, Barclays analyst Dan Levy wrote on Monday that he expects a “modest” delivery pace. Wall Street expects around 430,000 Tesla deliveries.

“Concerns have built on the pace of deliveries amid weakened demand signals. However, we think comments on the pace of production likely imply some upside, which we assume will be ~430k units in the quarter,” Levy wrote.

On Tuesday, weekly China EV insurance registration data could be a key gauge of Tesla demand in the world’s biggest EV market, which is in the middle of a huge price war started by Tesla.

Dow Jones Leaders: Apple, Microsoft

Among the Dow Jones stocks, Apple shares fell 1.2% on Monday, ending a two-day winning streak. Shares remain near recent highs.

Microsoft shares are again trying to break out above a flat-base buy point at 276.86, but closed back below the entry during Monday’s 1.5% loss. The stock is just below the 5% buy range which goes up to 290.70.

Microsoft shares recently rose after the company announced it is adding artificial intelligence tools to its popular Office productivity applications. It follows the company’s investment in AI startup OpenAI, the firm behind the busy ChatGPT application.

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