US Markets Round-Up

This week, the Russell 3000 index, an important benchmark of the US stock market, encompassing all market capitalizations, started on a marginally negative note and ended the week on a positive stance. The index made a high of 2630.38 during the week and settled at 2626.91 with a week-to-date (WTD) gain of 1.10 percent on March 24, 2022. Other major indices such as S&P 500 and NASDAQ Composite also showed positive movement throughout the week. On March 24, 2022, the S&P 500 index settled at 4520.16 with a WTD gain of ~1.28 percent, while NASDAQ Composite Index settled at 14191.839 with a WTD gain of ~2.15 percent.

As per the US Department of Labor, the US initial jobless claims numbers declined to 187,000 for the week ending March 19, 2022, which is the lowest reading since September 06, 1969, which acted as a strong catalyst for the index. The improved numbers for the Flash US Manufacturing PMI and Flash US Services Business Activity Index further acted as important pivotal points for the markets to catch the ongoing rally.

Having understood the US market performance over the week, following the global macros, and based on our technical analysis of the Russell 3000, the two stocks: Carpenter Technology Corporation (NYSE: CRS) and SkyWater Technology, Inc. (NASDAQ: SKYT) from the NSYE and NASDAQ listed spaces, fits the parameters from the technical standpoint. Noted below are our recommendations based on generic insights, entry price, target prices, and stop-loss for CRS and SKYT for the next 2-4 weeks duration:

Carpenter Technology Corporation

Carpenter Technology Corporation (NYSE: CRS) is a manufacturer, fabricator, and distributor of specialty metals. The key price indicators for the stock are:

Price Action Analysis (on the Weekly Chart)

CRS has broken a crucial resistance level of USD 40.07 as of March 22, 2022, and currently sustaining above the breakout level, indicating the probability of further upside movement, given the pattern formation. The recent uptick in the stock is backed by the volumes as well, further supporting a positive bias. The next major resistance level for the stock appears at USD 49.00 and prices may test this level in the short-term (2-4 weeks). A further movement above USD 49.00 may extend buying in the stock.  

Technical Indicators Analysis (On the Weekly Chart)

On the daily chart, RSI (14-period) is showing a reading of 63.20, indicating a positive momentum build-up. The volumes also seem supportive of the upside movement. Prices are trading above the trend-following indicators 21-period SMA and 50-period SMA, further supporting an up-move.

General Recommendation

As per the above-mentioned price action and technical indicators analysis, we can conclude that Carpenter Technology Corporation is looking technically well-placed on the chart, and we have a ‘Speculative Buy’ rating on the stock. Investment decisions should be made depending on an investors’ appetite for upside potential, risks, and any previous holdings. This recommendation is purely based on technical analysis, and fundamental analysis has not been considered in this report. The summary of our recommendation is as follows:

Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

SkyWater Technology, Inc.

SkyWater Technology, Inc. (NASDAQ: SKYT) is an independent technology company that deals in semiconductor development and manufacturing services. Noted below are the key price Indicators for the stock:

Price Action Analysis (on the Daily Chart)

SKYT has started to move upside after forming a positive divergence with the RSI (14-period) on the lower level, indicating the possibility of an upside trend reversal. It has also broken a downward sloping trendline acting as resistance on March 17, 2022, and since then has been trading above the breakout level, further supporting a positive bias. The next major resistance level for the stock appears at USD 13.50 and prices may test this level in the short-term (2-4 weeks). A further movement above USD 13.50 may extend buying in the stock.  

Technical Indicators Analysis (On the Daily Chart)

On the daily chart, RSI (14-period) is showing a reading of 59.67, indicating a positive momentum forming at these levels. Prices are trading above the trend-following indicators 21-period SMA and 50-period SMA, further supporting an up-move.

General Recommendation

As per the above-mentioned price action and technical indicators analysis, we can conclude SkyWater Technology, Inc.is looking technically well-placed on the chart, and we have a ‘Speculative Buy’ rating on the stock. Investment decision should be made depending on an investors’ appetite for upside potential, risks, and any previous holdings. This recommendation is purely based on technical analysis, and fundamental analysis has not been considered in this report. The summary of our recommendation is as follows:

Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

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