US Markets Round-Up

This week, the Russell 3000 index, an important benchmark of the US stock market across various market capitalizations, started on a positive note; however, post that entered the correction phase. The index made a low of 2575.30 during the week and settled at 2605.67 with a week-to-date (WTD) loss of ~1.42 percent on April 07, 2022. Other major indices such as S&P 500 and NASDAQ Composite also showed negative movement for the week. On April 07, 2022, the S&P 500 index settled at 4500.21 with a WTD loss of ~1.00 percent while the NASDAQ Composite Index settled at 13897.30 with a WTD loss of ~2.55 percent.

The market remained in negative territory despite the release of positive economic data during the week such as ISM Services PMI and US initial jobless claims. As per the US Department of Labor, the weekly initial jobless claims numbers declined to 166,000 from 171,000 (revised level) in the prior week.

Having understood the US market performance over the week, taking cues from major global news, and based on our technical analysis of the Russell 3000 index for the upcoming week, now let us have a look at the two NYSE/ NASDAQ listed stock picks from the technical standpoint. Noted below are our recommendations based on generic insights, entry price, target prices, and stop-loss for Charles River Laboratories International, Inc. (NYSE: CRL) and BWX Technologies, Inc. (NYSE: BWXT) for the next 2-4 weeks duration:

Charles River Laboratories International, Inc. 

Charles River Laboratories International, Inc. (NYSE: CRL) is a medical research company that provides models required for the research and development of new drugs, devices, and therapies. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Daily Chart) 

CRL has recently broken a descending channel formation on the upside and is trading above the breakout level, indicating the possibility of an upward trend reversal. The stock has also broken a crucial resistance level of USD 300, further supporting a positive bias. Now the next major resistance level for the stock appears at USD 350.00 and prices may test this level in the short-term (2-4 weeks). A further movement above USD 350.00 may extend buying in the stock.

Technical Indicators Analysis (On the daily chart)

On the daily chart, RSI (14-period) shows a reading of 59.21 level, 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 Charles River Laboratories International, Inc. is looking technically well-placed on the chart, and we have a ‘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.

BWX Technologies, Inc

BWX Technologies, Inc. (NYSE: BWXT) is an aerospace & defense company that manufactures & sells nuclear components and provides services. Noted below are the key price Indicators for the stock: 

Price Action Analysis (on the Daily Chart)

BWXT has recently given the breakout from a Bullish Pennant (bullish continuation) pattern and is trading above the breakout level, indicating the possibility of further upside. Now the next major resistance level for the stock appears at USD 62.60 and prices may test this level in the short-term (2-4 weeks). A further movement above USD 62.60 backed by volumes may extend buying in the stock.

Technical Indicators Analysis (On the Daily Chart)

On the daily chart, RSI (14-period) shows a reading of 61.93, indicating a positive momentum build-up. 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 BWX Technologies, 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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