US Markets Round-Up

This week, the Russell 3000 index, an important benchmark of the US stock market across market capitalizations, started on a marginally negative note; however, settled at 2415.69 with a week-to-date (WTD) gain of ~0.47 percent on June 02, 2022. Other major indices such as S&P 500 and NASDAQ Composite also witnessed positive movement during the week. On June 02, 2022, the S&P 500 index settled at 4176.82 with a WTD gain of ~0.45 percent, and the NASDAQ Composite Index settled at 12316.89 with a WTD gain of ~1.53 percent.

As per the U.S. Department of Labor, the initial jobless claims numbers declined to 200,000 from 211,000 (revised level) in the prior week and supported the positive movement.

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 ResMed, Inc. (NYSE: RMD) and Aehr Test Systems (NASDAQ: AEHR) for the next 2-4 weeks duration:

ResMed, Inc. 

ResMed, Inc. (NYSE: RMD) is a health technology company that provides solutions to digital health and cloud-connected medical devices. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart)

RMD’s prices are sustaining above the horizontal trendline and continuously taking support from the same. The prices recently started to move upside after taking the support from the same level, further supporting a positive bias. Now the next major resistance level for the stock appears at USD 245 and prices may test this level in the short-term (2-4 weeks). A further movement above USD 245 may extend buying in the stock.  

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, the leading indicator RSI (14-period) started to recover from the lower levels and is showing a reading of 42.61. However, prices are trading below the trend-following indicator 21-period SMA and 50-period SMA, which may act as a resistance level for the stock.

General Recommendation

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

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.

Aehr Test Systems

Aehr Test Systems (NASDAQ: AEHR) is an electronic technology company which engaged in the designing, manufacturing, and marketing of the semiconductor industry. Noted below are the key price Indicators for the stock:

Price Action Analysis (on the Weekly Chart)

AEHR’s price witnessed a breakout of the falling trendline and since then are sustaining above the breakout level, indicating positive bias coming into the price action. Now the next major resistance level for the stock appears at USD 11 and prices may test this level in the short-term (2-4 weeks). A further movement above USD 11 backed by volumes may extend buying in the stock.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, the leading indicator RSI (14-period) started to recover from the lower levels and is showing a reading of 47.50. However, prices are trading below the trend-following indicator 21-period SMA and 50-period SMA, which may act as a resistance level for the stock.

General Recommendation

As per the above-mentioned price action and technical indicators analysis, we can conclude Aehr Test Systems 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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