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 and continued the negative momentum for the entire week. The index settled at 2688.85 with a week-to-date (WTD) loss of ~0.77 percent on December 02, 2021. Other major indices such as S&P 500 and NASDAQ Composite also showed downside movement for the week. On December 02, 2021, the S&P 500 index settled at 4577.10 with a WTD loss of ~0.38 percent, while NASDAQ Composite Index settled at 15381.32 with a WTD decline of ~0.71 percent.

The US market reacted negatively due to concerns of the first US omicron case, and Federal Reserve Chairman Jerome Powell hints winding down monthly asset purchases more quickly than planned. According to the weekly data published by the US Department of Labor, the seasonally adjusted US Initial jobless claims data increased by 28,000 to 222,000 for the week ending November 27, 2021, against the initial claims at 194,000 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 listed stock picks from the technical standpoint. Noted below are our recommendations based on generic insights, entry price, target prices, and stop-loss for PulteGroup Inc (NYSE: PHM) and Stoneridge Inc (NYSE: SRI) for the next 2-4 weeks duration:

PulteGroup Inc 

PulteGroup Inc (NYSE: PHM) is a home builder company. The company is engaged in Homebuilding and Financial Services. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart) 

PHM broke a falling wedge pattern on the upside on November 09, 2021, and since then has been trading above the breakout level, indicating an upward trend for the stock. The recent upside movement in the stock is backed by increasing volumes, further supporting a positive bias. Now the next crucial resistance level for the stock appears at USD 59.84, and it may test this level in the short-term (2-4 weeks). A further movement above USD 59.84, 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 53.75 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 indicators 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 PulteGroup Inc is as follows:

General Recommendation

As per the above-mentioned price action and technical indicators analysis, we can conclude that PulteGroup Inc is looking technically well-placed on the chart. Therefore, we have a 'Buy' rating on the stock. Investment decisions should be made depending on an investor's 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:

Stoneridge Inc

Stoneridge Inc (NYSE: SRI) is a designer and manufacturer of engineered electrical and electronic components. Noted below are the key price Indicators for the stock: 

Price Action Analysis (on the Weekly Chart)

On the weekly chart, SRI stock prices are sustaining above the rising trendline and continuously taking support of the same. After taking the support of the trendline, the price has witnessed an upside rebound. Now, the next resistance level appears to be at USD 26.80, and the stock may test that level in the short term (2-4 weeks).

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI (14-period) is recovering from lower levels and currently trading at 46.86, indicating a positive trend for the stock. The weekly volumes also seem supportive of the upside movement. However, the CMP is below the 50-period SMA that may act as the resistance levels for the stock.

Financial Summary 

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

General Recommendation

As per the above-mentioned price action and technical indicators analysis, we can conclude that Stoneridge Inc is looking technically well-placed on the chart. Therefore, we have a 'Speculative Buy' rating on the stock. Investment decisions should be made depending on an investor's 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: