Here's your stock Investing Action Plan: what you need to know as an investor as the stock market enters the final week of 2021. A three-day slide through Monday placed the market's young uptrend under pressure. A quick, three-day recovery sent the Nasdaq back above key support, while continuing the volatile saw-toothed action that has defined December. Earnings news will be scant in the coming week. Housing markets will receive some data input. Markets may see some impact from new coronavirus news, and from year-end legislative contests in Washington.
Stock Market Long-Term Leaders Setting Up
A week of rollicking stock market action has left a number of IBD Long-Term Leaders finding support at their 50-day lines. That is often a good place to buy them, but the stocks are also moving toward traditional buy points. They include Pool Corp. (POOL), West Pharmaceutical Services (WST), Fortinet (FTNT), Microsoft (MSFT) and Google parent Alphabet (GOOGL).
All five share a bullish trait: Their relative strength lines are near highs following long uptrends.
Pool Corp. has pulled back nicely to its 50-day line over the past few weeks. Investors could buy it off the 50-day line or at a new flat base developing with a 528.36 buy point.
West Pharmaceutical is closing in on a 458.09 cup-with-handle base after rebounding from its 50-day. Security software developer Fortinet has bounced from its 50-day line and cleared some short-term resistance as it nears a 335.45 flat base.
Google stock is carving a new flat base with a 3,019.43 buy point. But it's actionable as it rebounds from the 50-day line above 2,925.17. That's a prior buy point, and also about the level of a short, downward-sloping trend line.
Dow Jones stock Microsoft also has retaken its 50-day. It could have a slightly early entry if it breaks a short trend line. The stock is now working on a new flat base with a 349.77 buy point.
Econ Radar: Unemployment, Housing Data
Initial claims for jobless benefits, out Thursday at 8:30 a.m. ET, merit close attention as the stock market braces for a potential omicron-related economic slowdown. Claims through Dec. 18 had yet to show any ill impact. But spiraling cases and the imposition of mask and vaccine requirements in some localities over the past week could start show up in the new data.
Housing data will be a secondary focus. Pending home sales for November, released Wednesday at 10 a.m., will give a timely indication of housing strength, since they're based on the number of homes coming under contract, which occurs a month or two before sales typically close.
On Tuesday at 9 a.m., release of both the FHFA Home Price Index and S&P Case-Shiller home price indexes for October may provide more clarity on whether annual home price appreciation — 18.5% and 19.5% according to the two different gauges — has begun to decelerate. Collectively, the housing market gauges could work either to reinforce or weaken investor optimism following the past week's strong GDP and consumer confidence readings.
Breaking Down The Gobal Stock Market Holidays
U.S. stock market launched its holiday season, starting a three-day Christmas weekend on Friday. Exchanges will remain open on Friday, Dec. 31, heading into the New Year. The week between the two is generally, but not always, a low-volume, low drama week of trade. Overseas, the Frankfurt Stock Exchange will close for holidays on both year-end Fridays. The Euronext stock exchange in Paris will run half day sessions on both Fridays, but will otherwise be open.
The London Stock Exchange will close early on Friday, Dec. 24 and will remain dark through Tuesday. It will start the New Year's weekend with a half-day session on Friday, Dec. 31, and restarting Tuesday, Jan. 4.
Cloud Computing Shift To The Metaverse Makes These Tech Stocks 'Sexy' Again
In China, the exchange in Hong Kong closes for four days beginning Dec. 24, but remains open for the New Year holiday. Shanghai's stock exchange remains open, except for a New Year's holiday on Jan. 3. The Tokyo Stock Exchange in Japan closes for a four-day holiday beginning Dec. 31, and reopening on Tues. Jan. 4.
Omicron Hits Home For Christmas
While the coming week is traditionally a quiet one, the spreading new wave of coronavirus has the potential to upend the stock market's intra-holiday peace. Holiday events attempting to restart after last year's interruptions are being canceled at a rising pace from New York to Los Angeles and abroad. Those shutdowns threaten volatility in many travel, energy, restaurant and retail sectors. Test and vaccine-related biotechs and medical products vendors, and lockdown beneficiaries like Zoom Video and Home Depot could veer up or down.
Time The Market With IBD's ETF Market Strategy
A few holiday events canceled in recent days include, in New York, the Radio City Rockettes canceled their Christmas Spectacular as well as their entire 2021 season. Broadway's "Hamilton" and "Aladdin" canceled shows through Christmas, but were set to reopen Sunday and Monday. N.Y. City Mayor-elect Eric Adams canceled his inauguration ceremony. Organizers scaled back plans for Times Square on New Year's Eve, with capacity reduced and masks now required. In Houston, Rice University has postponed two men's basketball games. The NHL shut down from Wednesday through Christmas Day on Saturday. In Los Angeles, performances of "A Christmas Carol" at L.A.'s Ahmanson Theater are canceled. And the city's first major New Year's Eve event, scheduled at Grand Park with a special, in-person celebration of 5,000 first responders, scaled back to a virtual event.
Top Industries Race To Close Out 2021
Heading into the stock market's final week of the year, department stores hold the strongest year-to-date advance among industries tracked by IBD. Dillard's (DDS) heads the group, up 297% with an assist from the mem-trading crowd. Macy's (M) rallied 121%. Coal miners and U.S. domestic oil producers took the second and third slots, as rebounding energy prices received added lift from a global energy supply bottlenecks. Warrior Met Coal (HCC) and CNX Resources (CNX) are currently among the best looking coal miners.
U.S. oil producer stocks hold six of the 20 most powerful gains among S&P 500 stocks this year. GameStop (GME) the proto-mem stock, led the S&P 500 with a 8739% advance. Microsoft and Home Depot (HD) are fighting tooth and nail for the top Dow industrials slot, up about 48% each. EV maker Lucid (LCID) leads the Nasdaq, up 293% for the year. Vaccine maker Moderna (MRNA) is next in line with a 136% gain.
YOU MAY ALSO LIKE:
Top Growth Stocks To Buy And Watch
Learn How To Time The Market With IBD's ETF Market Strategy
Find The Best Long-Term Investments With IBD Long-Term Leaders
MarketSmith: Research, Charts, Data And Coaching All In One Place
How To Research Growth Stocks: Why This IBD Tool Simplifies The Search For Top Stocks
