April 21, 2022, 11:58 am EDT
Watch Out Attempted Rally
The attempted rally led by Tesla (TSLA) +7% strong earnings may need to be examed and watched out for its development. It is questionable if this rally is sustainable for an uptrend or simply a short-lived pop. There is one way to check the quality of this rally by looking into the leaders today including sectors, industries, and stocks.
- Airlines: AAL, DAL, UAL, LUV
- Railroad: CSX, NSC
- Material: NUE, DOW
- Consumer Staples: MO, PM, MNST
- Auto Manufacturers: TSLA
The airline industry took a gap-up breakout so this area could emerge in the future. Mask mandate ruling has changed to optional a few days ago by the US government. Indeed, it is possible that more travel and vacations are coming for the summertime after being restricted for more than two years under tight regulations.
Other than that we do not see other emerging leaders on the offensive side. Even TSLA is still under sideways movement with today’s gain.
Therefore, we are suspicious of the quality of this attempted rally. Based on the moving average lines (20,50,200), here is the current bias for the major indexes:
- Dow Jones: Bullish
- S&P 500: Neutral
- Nasdaq: Bearish
Let’s stay cautious and keep watching.