Good morning and welcome to our Market Pulse edition!
The US market continues its impressive active sequence which has entered its 3rd week. We continue to be mildly bullish at these levels. Despite the fact that some names are starting to be extended from the moving averages, there are still good opportunities for more continuation. Yesterday, $TSLA announced a new stock split which will most likely take place at the end of the summer. As a result the EV stock will join the likes of $AMZN and $GOOGL as 2022 seems to be the year of stock splits for the biggest US companies by market cap. The news was welcomed by Wall Street and $TSLA is once again above $1100 knocking on the door of its all time high.
The war in Ukraine continues interrupted and there are still plenty of uncertainties with regards to a possible resolution. This week, a new round of negotiations will take place in Istanbul as Mr. Erdogan tries to bring and end to this bloody conflict. As a result of this news, oil prices are starting to fall in anticipation of a possible deal and an end to some of the current restrictions.
Bonds continue to be under pressure as the Treasury yield is comfortably above 2.5%. This is a worrisome level for long term investors. In general, tech and growth stocks tend to underperform under such circumstances.
We believe that the current rally is soon coming to a halt as both the $S&P and $Nasdaq are approaching important resistance levels. We continue to be long several stocks and indices currently but are ready to switch gears once the trend changes. As always, do not try to time the market as this will cost you greatly. The trend is your friend and respect the price action in front of you irrespective of your opinions.
Semiconductor stocks have been weaker yesterday as analysts from Goldman Sachs downgraded the entire sector. From a technical perspective, stocks such as $AMD, $NVDA and $MRVL continue to build bull flags and therefore may offer a new leg higher. From a fundamental perspective, if the semiconductor stocks start to break down, this may signal the end of the recent impressive bull run.
In terms of individual stocks, we are bullish on $AMZN, $GOOGL and $MSFT as they recently broke above important resistance levels and are not as extended as $AAPL. If the market remains constructive, we may witness another push higher before hitting a ceiling.
The crypto sector has been acting better as $Bitcoin managed to get above the important 46K resistance area. The measured move from the channel it has formed in the past 3 months, should take the price to approximately 58K in the coming weeks. As a result, we are bullish on $SQ and $COIN as they may be finally able to get above their recent downtrends.
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