US Markets Round-Up

This week, the Russell 3000 index, an important benchmark of the US stock market across market capitalizations, started on a negative note; however, all its earlier losses were erased in the latter part of the week and the index settled at 2641.96 with a week till date (WTD) gain of ~1.34 percent on October 14, 2021. Other major indices such as S&P 500 and NASDAQ Composite also showed recovery from the lower levels. On October 14, 2021, the S&P 500 index settled at 4438.26 with a WTD gain of ~1.07 percent, while NASDAQ Composite Index settled at 14823.429 with a WTD gain of ~1.67 percent.

In the initial part of the week, market sentiments were mainly impacted by the rise in inflation numbers. As per the US Bureau of Labor Statistics, Consumer Price Index (CPI) increased 0.4% in September (on a seasonally adjusted basis) as compared to an increase of 0.3% in August. However, in the latter part of the week, markets rebounded after the release of the US weekly initial jobless claims figure which declined to 293,000 from 329,000 (revised level) in the prior week and registered the lowest level since March 14, 2020. 

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 WEX Inc (NYSE: WEX) and Griffon Corporation (NYSE: GFF) for the next 2-4 weeks duration:

WEX Inc 

WEX Inc (NYSE: WEX) is a technology service provider in the financials space. Its operating segments include fleet solutions, health and employee benefit solutions, and travel & corporate solutions. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart) 

WEX has started to recover from the lower levels after the positive divergence on the RSI (14-period) and has recently broken a downward sloping trend line on the upside, indicating the possibility of an upside direction hereon. Now the next major resistance level for the stock appears at USD 220 and prices may test this level in the short-term (2-4 weeks). A further breakout above USD 220, backed by volumes, may extend buying in the stock.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI (14-period) is trading at ~52.00 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, further supporting the up-move; however, the 50-period SMA is above the CMP, and may act as a resistance level for the stock.

Financial Summary

Summary of the Key Financial Metrics for the past four years for WEX Inc is as follows:

General Recommendation

As per the above-mentioned price action and technical indicators analysis, we can conclude that WEX 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:

Griffon Corporation 

Griffon Corporation (NYSE: GFF) is a holding company that deals in diversified segments such as consumer and professional products, defence electronics & home and building products. Noted below are the key price Indicators for the stock:

Price Action Analysis (on the Weekly Chart) 

GFF's price is sustaining above a downward sloping trend line breakout for the past 3 weeks with a positive bias, indicating the possibility of continuation of the uptrend. Now the next resistance level for the stock appears at USD 30.00 and it may test this level in the coming sessions. A further breakout above USD 30.00, backed by volumes, may extend buying in the stock.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI (14-period) is trading at ~58.30 levels, indicating a positive trend for the stock. The weekly volumes also seem supportive of the upside movement. The CMP is above the 50-period SMA and 21-period SMA, further supporting an up move.

Financial Summary 

Summary of the Key Financial Metrics for the past four years for Griffon Corporation is as follows: 

General Recommendation

As per the above-mentioned price action and technical indicators analysis, we can conclude that Griffon Corporation 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: