US Markets Round-Up

This week, the Russell 3000 index, an important benchmark of the US stock market across market capitalizations, started on a positive note and continued the momentum for most of the week. The index made a high of 2764.37 during the week and settled at 2735.66 with a week-to-date (WTD) gain of ~2.84 percent on December 09, 2021. Other major indices such as S&P 500 and NASDAQ Composite also showed bullish movement for the week. On December 09, 2021, the S&P 500 index settled at 4667.45 with a WTD gain of ~2.84 percent, while NASDAQ Composite Index settled at 15517.37 with a WTD gain of ~2.86 percent.

Market sentiments were boosted by a further decline in US weekly initial jobless claims numbers. As per the US Department of Labor, weekly initial jobless claims numbers decreased to 184,000 and registered the lowest level since September 06, 1969.

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 Stanley Black & Decker Inc (NYSE: SWK) and Ternium S.A. (NYSE: TX) for the next 2-4 weeks duration:

Stanley Black & Decker Inc 

Stanley Black & Decker Inc (NYSE: SWK) is a global machinery company that operates in three segments; Tools & Storage, Security, and Industrial.  Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart) 

SWK has been sustaining above a downward sloping trend line breakout level for the past 1 month, indicating the possibility of a positive movement in the stock. The recent upside movement in the stock is backed by increasing volumes, further supporting a positive bias. Now the next major resistance level for the stock appears at USD 225 and prices may test this level in the short-term (2-4 weeks). A further movement above USD 225 may extend buying in the stock.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart RSI (14-period) is trading at 51.72 levels, indicating a positive trend for the stock. The weekly volumes also seem supportive of the upside movement. The CMP is above the 21-period SMA and 50-period SMA, further supporting an up move.

Financial Summary

Summary of the Key Financial Metrics for the past four years for Stanley Black & Decker Inc is as follows:

General Recommendation

As per the above-mentioned price action and technical indicators analysis, we can conclude that Stanley Black & Decker Inc is looking technically well-placed on the chart, and we have a ‘Buy’ rating on the stock. Investment decision should be made depending on an investors’ appetite on 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:

Ternium S.A.

Ternium S.A. (NYSE: TX) is a steel-producing company that deals in finished and semi-finished steel products and iron ore. Noted below are the key price Indicators for the stock: 

Price Action Analysis (on the Weekly Chart)

TX has recently broken a descending channel formation on the upside and is trading around the breakout level, indicating the possibility of an upward trend hereon. The recent upside movement in the stock is backed by a gradual increase in the volumes, further supporting a positive bias.  Now the next crucial resistance level for the stock appears at USD 50.00 and it may test this level in the short-term (2-4 weeks). A further movement above USD 50.50 may extend buying in the stock.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI (14-period) is trading at 50.36 levels, indicating a positive trend for the stock. The weekly volumes also seem supportive of the upside movement. The CMP is above the trend following indicator 50-period SMA, further supporting an up move.

Financial Summary 

Summary of the Key Financial Metrics for the past four years for Ternium S.A. is as follows: 

General Recommendation

As per the above-mentioned price action and technical indicators analysis, we can conclude that Ternium S.A. is looking technically well-placed on the chart, and we have a ‘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: