US Markets Round-Up

This week, the Russell 3000 index, an important benchmark of the US stock market across market capitalizations, started on a flat note and traded sideways for most of the week. The index settled at 2785.05 with a marginal week till date (WTD) gain of ~0.13 percent on November 18, 2021. Other major indices such as S&P 500 and NASDAQ Composite also showed slightly upside movement for the week. On November 18, 2021, the S&P 500 index settled at 4704.45 with a WTD gain of ~0.46 percent, while NASDAQ Composite Index settled at 15993.71 with a WTD gain of ~0.84 percent.

As per the U.S. Census Bureau, the advance estimates of U.S. retail and food services sales for October 2021 were $638.2 billion, an increase of 1.7% from the previous month and supported the indices. A further decline in US weekly initial jobless claims numbers to 268,000 from 269,000 (revised level) in the prior week helped the indices to retain at higher levels.

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 Q2 Holdings Inc (NYSE: QTWO) and Quanex Building Products Corporation (NYSE: NX) for the next 2-4 weeks duration:

Q2 Holdings Inc 

Q2 Holdings Inc (NYSE: QTWO) is a software company engaged in providing secure cloud-based digital solutions. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart) 

QTWO has started to move upward after the breakout of a falling wedge pattern on the upside, 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 105 and prices may test this 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 47.25, indicating a positive trend for the stock. The weekly volumes also seem supportive of the upside movement. However, the CMP is below the 21-period SMA and 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 Q2 Holdings Inc is as follows:

General Recommendation

As per the above-mentioned price action and technical indicators analysis, we can conclude that Q2 Holdings 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:

Quanex Building Products Corporation

Quanex Building Products Corporation (NYSE: NX) is a building products manufacturing company for the original equipment manufacturers (OEM). Noted below are the key price Indicators for the stock:

Price Action Analysis (on the Weekly Chart)

NX has broken a descending channel formation on the upside on November 03, 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 27.00 and it may test this level in the short-term (2-4 weeks). A further movement above USD 27.00, 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 50.46 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 21-period SMA, further supporting an up move.

Financial Summary 

Summary of the Key Financial Metrics for the past four years for Quanex Building Products Corporation is as follows: 

General Recommendation

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