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 made a new lifetime high of 2559.25 on June 24, 2021. The index closed at 2556.84 on June 24, 2021, with a decent week till date (WTD) gain of ~2.59 percent. Other major indices such as S&P 500 and NASDAQ Composite also showed bullish movement during the week. On June 24, 2021, the S&P 500 index settled at 4266.49 with a WTD gain of ~2.40 percent, while NASDAQ Composite Index settled at 14369.71 with a WTD a gain of ~2.42 percent.

A decrease in US weekly Unemployment Claims coupled with the record-high Flash Manufacturing PMI boosted the market sentiments. As per the data released by the US Bureau of Labor Statistics, US weekly unemployment claims decreased to 411,000 from 418,000 (revised level) in the prior week and acted as the catalyst for an upward direction. As per the data released by IHS Markit, the Flash U.S. Manufacturing PMI Index reached 62.6 in June compared to 62.1 in May and recorded series high. However, a decrease in Flash U.S. Services Business Activity Index at 64.8 in June compared to 70.4 in May limited the gains.

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 Albireo Pharma Inc (NASDAQ: ALBO) and Arlo Technologies Inc (NYSE: ARLO) for the next 2-4 weeks duration:

Albireo Pharma Inc 

Albireo Pharma Inc (NASDAQ: ALBO) is a specialty bio-pharmaceutical company engaged in the development and commercialization of bile acid modulators. These modulators are used in the treatment of gastrointestinal (GI) and orphan pediatric liver diseases. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart) 

ALBO's price reversed from the lower levels after forming a Doji candlestick on the weekly chart. Prices broke a descending channel formation by an upside on June 14, 2021, and since then have been trading above the breakout level, supporting a positive stance.  Now the next major resistance level appears at USD 43.45, and prices may test that level in the short-term (2-4 weeks). A further breakout above USD 43.45 backed by volumes may extend buying in the stock till the next resistance level USD 45.55.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~56.67 levels and indicating a positive trend for the stock. The weekly volumes are showing an increasing trend and seems supportive of an upside movement. The CMP is above the 21-period and 50-period SMA, further providing support for an upward direction.

Financial Summary:

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

General Recommendation:

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

Arlo Technologies Inc

Arlo Technologies Inc (NYSE: ARLO) is in the business of home automation system and wireless surveillance cameras. Its cloud-based platform provides insight, visibility, and connectivity to people. Noted below are the key price Indicators for the stock:

Price Action Analysis (on the Weekly Chart)

ARLO's prices are sustaining above an upward sloping trend line for more than a year, indicating overall an upside trend for the stock. Price has also broken above the downward sloping trendline by an upside on May 26, 2021, and since then have been trading above the breakout, further supporting a positive direction. Now the next major resistance level appears at USD 8.85, and prices may test the level in the coming sessions.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~55.40 levels and indicating a positive trend for the stock. The weekly volumes are showing an increasing trend and seems supportive of an upside movement. The CMP is above the 21-period and 50-period SMA, further providing support for an upward direction.

Financial Summary: 

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

General Recommendation:

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