The Dow Jones Industrial Average hit fresh highs Monday as components Walt Disney (DIS) and Apple (AAPL) outperformed. Tesla (TSLA) fared worst among the Magnificent Seven after it suffered another blow. And famed investor Cathie Wood bought a Bitcoin play despite recent sharp negative action.

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There was also a plethora of breakouts amid the encouraging action. Gartner (IT), Meritage Homes (MTH) and Tempur Sealy (TPX) were among the notable names testing buy points.

Nasdaq Gains, S&P 500 Hits Fresh Heights

The Nasdaq composite was strongest out of the major indexes as it rose 0.4%. Synopsys (SNPS) was among the best performers here as it rose more than 4%. Leaderboard stock Zscaler (ZS) also impressed with a lift of more than 4%.

The benchmark S&P 500 notched another all-time high as it gained 0.3%. Western Digital (WDC) impressed here as it gained nearly 5%.

The S&P 500 sectors were mostly higher. Technology and industrials fared best on the stock market today. Consumer discretionary and utilities lagged and struggled the most.

Small caps outperformed, with the Russell 2000 jumping 1.5%. Growth stocks also gave bears a bloody nose, as the Innovator IBD 50 ETF (FFTY) popped more than 1%.

Dow Jones Today: Apple Stock, Walt Disney Impress

The Dow Jones Industrial Average also hit an all-time high and remained up more than 100 points heading into the close. This translates to a 0.3% gain.

Apple stock was among the top performers as it rose more than 1%. AAPL is back above an old buy point of 192.93 and has retaken its 50-day moving average.

Disney stock was the best performer on the Dow Jones today as it turned in a gain of more than 2%.

Home Depot (HD) lagged as it fell more than 1% following a downgrade from Oppenheimer to perform from outperform.

Cathie Wood Buys This Plunging Bitcoin Play

Bitcoin has been struggling since spot exchange traded funds dealing in cryptocurrency were finally approved. The digital currency was down nearly 4% Monday, falling to just under $40,000 per token.

Recent negative action has not dissuaded ARK Invest Chief Executive Cathie Wood from using it as a buying opportunity though.

In fact, she bought nearly 317,000 of her firm’s ARK 21Shares Bitcoin ETF (ARKB) for the ARK Next Generation Internet ETF (ARKW).

At Friday’s low ARKB had fallen around 23% from its Jan. 11 high of 52.22. It is now down nearly 24% from this level after falling again Monday.

At the same time, Wood sold more than 510,000 of the fund’s shares in the ProShares Bitcoin Strategy ETF (BITO). Wood also jettisoned just over 45,000 shares of Advanced Micro Devices (AMD) from ARKW’s holdings.

The firm’s flagship ARK Innovation ETF (ARKK) fund was also snapping up some stock. The Cathie Wood fund bought nearly 323,000 shares of Recursion Pharmaceuticals (RXRX), nearly 663,000 shares of penny stock Ginkgo Bioworks (DNA) and almost 28,000 shares of Cerus (CERS).

Buying on the dip or snapping up cheap stocks can result in heavy losses though. Investor’s Business Daily recommends buying stocks with strong earnings and price performance. Look for leaders in strong industries that are showing superior earnings growth and sales.

Magnificent Seven: Tesla Stock Lags

The other so-called Magnificent Seven outside of Apple stock were having mixed fortunes.

Tesla stock lost ground on the 200-day moving average as it fell nearly 2%. It is now down nearly 17% so far this month.

TSLA stock was hit after Morgan Stanley analyst Adam Jonas cut his target to 345 from 380. The usually bullish analyst did keep an overweight rating on the shares for now.

Artificial intelligence play Nvidia (NVDA) was among the best performers here, rising nearly 1%. The Leaderboard stock is well extended from its most recent buy point. Google parent Alphabet (GOOGL) made a fractional gain.

Microsoft (MSFT), Meta Platforms (META) and Amazon.com (AMZN) gave up slight ground. MSFT stock is in a buy zone above a flat base with an ideal buy point of 384.30, MarketSmith analysis shows.

Outside Dow Jones: Three Stocks Test Entries

With the stock market uptrend continuing to impress, it is key to keep an eye out for breakouts. There was no shortage on Monday.

Gartner sits just below a buy zone after earlier testing a second-stage weekly chart cup base. The ideal entry point here is 469.58. The relative strength line is making progress again for the market research stock. It holds a stout IBD Composite Rating of 94 out of 99.

Meritage Homes saw its relative strength line hit fresh heights as it cleared a flat base entry of 178.82. It now sits just below this level. Meritage resides in the top 5% of stocks in terms of price performance over the past 12 months. With earnings due in nine days, buying now carries additional risk.

Mattress stock Tempur Sealy is just below its buy point after earlier clearing a flat base entry of 51.68. Both earnings and stock market performance appear to be solid here.

Investors have to be careful about buying breakouts amid earnings season. An approach highlighted by Investor’s Business Daily is to use options as a strategy to reduce risk around earnings. It’s a way to capitalize on the upside potential of a stock’s move around earnings, while reducing the downside risk.

Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.

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