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Netflix Paces IBD 50 As Young Uptrend Faces Test

Stock futures edged higher ahead of Thursday’s open, as Netflix (NFLX), Caterpillar (CAT) and Boeing (BA) hammered out early gains and the market’s young uptrend faced a critical test.

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Stock futures for the Dow Jones industrial average and the S&P 500 advanced 0.5%, with Caterpillar and Boeing leading the advance among blue chips. Nasdaq stock futures rose 0.6%, as Apple (AAPL) swung up 0.8% and Netflix ran ahead of the four FANG stock tech leaders in premarket trading.

Growth investors will be watching to see whether the market can extend the bullish shift marked on Tuesday. The Dow industrials ended Wednesday up 1.1% for the week. The S&P 500 held a 1.5% gain, while the Nasdaq had leapt 2.2%. All three indexes remain below their 50-day moving averages – a level that will provide the young uptrend with a test of resistance.

Markets angled higher after an early tweet from President Trump softened his stance on when a missile strike against Syria might occur. The White House has been mustering ally support for a retaliatory response following two reported chemical weapons attacks by Syria’s state military that killed civilians in the Syrian city of Douma on Saturday. Trump’s tweet on Thursday threw some chaff on front of his earlier message, made via Twitter on Wednesday, warning Russia to “get ready,” because U.S. missiles “will be coming.”

Crude oil price gains paused early Thursday. West Texas Intermediate held just below $67 a barrel and up nearly 8% so far for the week. Analysts cite rising conflict in both Syria and Yemen for part of the gains, against a backdrop of improving international demand. Energy-related industry groups posted six of the 10 largest gains among IBD’s industry groups on Wednesday.

Overseas trading was mixed. In Europe, leading indexes traded generally higher near midday. Frankfurt’s DAX paced the region, up 0.5%. Asian stock markets posted a losing session, with markets across China and Japan closing with mild declines.

Stock Futures: Defense Names, IPOs Advance; Netflix In Buy Range

The market’s improved status puts growth investors back in a buying mode. Several leading defense names, including Northrop Grumman (NOC) and Raytheon (RTN), neared buy points on Wednesday as the U.S. moved toward possible military action against Syria. Stock futures for both companies gained 0.7% in premarket trading.

At the same time, Dropbox (DBX), Spotify (SPOT) and a few other large tech IPOs had shaped IPO bases.  Both names climbed 0.8% ahead of the open.

On the Dow, Caterpillar and Boeing were the early  leaders — up more than 1% apiece. Boeing shares are looking to retake support at their 10-week moving average and start up the right side of a six-week cup base. Potential buy point is at 371.70. Caterpillar is rising off a test of support at its 40-week line, within a deeper consolidation.

Netflix led the FANG group, up 1.8%. The stock, an IBD 50 and IBD Leaderboard name, gained volume Wednesday as it rebounded from its 10-week moving average. This put shares briefly in a buy range. The premarket move suggested the stock would open beyond the buy range’s 304.50 limit. Netflix reports its first-quarter results on Monday.

Just behind Netflix on the IBD 50 list of leading growth stocks, Micron Technology (MU) popped 1.6% in premarket trading.  The stock is pulled back from a mid-March high, retesting a 49.99 buy point, as well as support at its 10-week moving average.

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