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 ~2547.64 on June 15, 2021. However, in the latter part of the week, all its earlier gains were erased and on June 17, 2021, the index settled at 2525.25 with a week till date (WTD) loss of ~0.72 percent. Other major indices such as S&P 500 and NASDAQ Composite showed mixed movement during the week. On June 17, 2021, the S&P 500 settled at 4221.86 with a WTD loss of ~0.60 percent, while NASDAQ Composite Index settled at 14161.35 with WTD a gain of ~0.65 percent.

Indices witnessed negative movement after the Federal Open Market Committee in the US signalled the possibility of two interest rate hikes in 2023. The increase in the US weekly Unemployment Claims coupled with the decrease in monthly Retail Sales and Core Retail Sales data (released by the US Census Bureau) further supported the downside direction. As per the data released by the US Bureau of Labor Statistics, US weekly unemployment claims increased to 412,000 from 376,000 in the prior week and acted as the catalyst for a downward 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 NextEra Energy Partners LP (NYSE: NEP) and Zuora Inc (NYSE: ZUO) for the next 2-4 weeks duration:

NextEra Energy Partners LP 

NextEra Energy Partners LP (NYSE: NEP) is a US-based renewable energy company. The company owns and operates clean energy projects such as solar, wind power, and natural gas pipeline projects in North America. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart) 

NEP's price broke a symmetrical triangle pattern on the upside on June 08, 2021 and has since then been trading above the breakout level, indicating an upward direction for the stock. The breakout is supported by the sharp rise in volumes, thereby higher market participation supporting the upside movement. Now the next major resistance level appears at USD 88.30, and prices may test that level in the short-term (2-4 weeks). A further breakout above USD 88.30 backed by volumes may extend buying in the stock till the next resistance level USD 95. 

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~56.73 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 with a positive crossover, further providing support for the upward movement.

Financial Summary:

Summary of the Key Financial Metrics for the past four years for NextEra Energy Partners LP is as follows:

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, we can conclude that NextEra Energy Partners LP 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:

Zuora Inc

Zuora Inc (NYSE: ZUO) is a cloud-based software organization. The company provides software solutions for businesses to manage and launch their subscription-based services. The company’s products include Zuora Billing which is designed to automate the recurring bills, collections, quoting, and subscription metrics. Noted below are the key price Indicators for the stock: 

Price Action Analysis (on the Weekly Chart)

ZUO's prices are sustaining above an upward sloping trend line for more than a year, indicating an upside direction for the stock. Prices recently started to move upside after consolidating for more than a month and for the short-term (2-4 weeks), we may expect continuity of the upward trend. Now the next major resistance level appears at USD 21.35, and prices may test this level in the coming sessions.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~58.80 levels and indicating a positive trend for the stock. The weekly volumes are showing an increasing trend and seems supportive of the upside movement. The CMP is above the 21-period and 50-period SMA with a positive crossover, further providing support for an upward direction.

Financial Summary: 

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

General Recommendation:

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