US Technical Analysis Report

Russell 3000 Slumped from Higher Levels, One Stock from the Buy Perspective– BG

Oct 01, 2021 12:00 AM PDT

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 bearish momentum for the entire week. The index made a low of 2559.31 and settled at 2559.72 with a week till date (WTD) loss of ~3.26 percent on September 30, 2021Other major indices such as S&P 500 and NASDAQ Composite also witnessed sharp sell-off during the week. On September 30, 2021, the S&P 500 index settled at 4307.54 with a WTD loss of ~3.32 percent, while NASDAQ Composite Index settled at 14448.581 with a WTD loss of ~3.98 percent.

The market sentiment was impacted by the negative economic data released during the week such as Unemployment claims, Chicago PMI, CB Consumer Confidence, and Core Durable Goods Orders. As per the US Bureau of Labor Statistics, the US weekly unemployment claims increased to 364,000 from 351,000 (revised level) in the prior week and acted as the catalyst for the downward movement. However, as per the third estimate, the GDP in the second quarter of 2021 increased at an annual rate of 6.7 percent, revised upwards by 0.1 percentage point from the second estimate that supported the indices.

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 one NYSE listed stock pick from the technical standpoint. Noted below is our recommendation based on generic insights, entry price, target prices, and stop-loss for Bunge Limited (NYSE: BG) for the next 2-4 weeks duration:

Bunge Limited 

Bunge Limited (NYSE: BG) is a food processing company. It operates in different segments such as milling products, agribusiness, sugar & bioenergy, edible oil products, and fertilizer. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart) 

BG has recently broken a downward sloping trend line on the upside, indicating an upward direction for the stock. Price has also broken the major resistance level of USD 80.42 on the upside, further supporting a positive stance. Now the next major resistance level for the stock appears at USD 92.40 and prices may test this level in the short-term (2-4 weeks). A further breakout above USD 92.40 backed by volumes may extend buying in the stock. 

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~56.46 levels and indicating a positive trend for the stock. The weekly volumes also seem supportive of an upside movement. The CMP is above the 21-period and 50-period SMA, further providing support for the upward direction.

Financial Summary:

Summary of the Key Financial Metrics for the past four years for Bunge Limited is as follows:

General Recommendation:

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

Upcoming Major Global Economic Events

Market events occur on a day-to-day basis depending on the frequency of the data and generally include an update on employment, inflation, GDP, consumer sentiments, etc. Noted below are the upcoming week's major global economic events that could impact the Russell 3000 Index and stocks’ prices.

Investment Related Risks: Based on the technical analysis, the risks are defined as per risk-reward ratio (~0.60:1.00), however, returns are generated within 2-4 weeks’ time frame. This may be looked at by Investors with sufficient risk appetite looking for returns within short investment duration. Investment recommendation provided in this report is solely based on technical parameters, and fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, and social and political instability risks etc.

Entry Price: For the given recommendation(s), Entry Price is assumed be at or above a certain level. However, a slight deviation in the ‘Entry Price’ can be considered depending upon the upside potential expected and taking into consideration the Target 1 and trailing stop-loss levels indicated. For example: - An Investor can consider entering the stock at or above a certain range (3%-5%) from the Entry Levels recommended depending upon the potential upside expected and difference from the Target 1 and Trailing-Stop Loss Levels indicated for the stock.

Note 1: Investors can consider exiting from the stock if the Target Price or Stop loss mentioned as per the technical analysis has been achieved and subject to the factors discussed above. 

Note 2: How to Read the Charts?

The Green colour line reflects the 21-period moving average while the red line indicates the 50- period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Risk Reward Ratio: Risk reward ratio is the difference between an entry point to a stop loss and profit level. We suggest ~60% Stop Loss of the Target 1 from the entry point. 

A trailing stop-loss is a modification of stop-loss in case of favourable movement in the price to protect the gains. We suggest Investors to Trail the Stop-Loss as per the aforementioned levels if the stock price achieves more than 60% of the Target 1. Investors should consider exiting from the position as per the Trailing Stop-Loss level if the price starts moving downwards after achieving more than 60% of the Target 1. 

The reference date for all price data, volumes, technical indicators, support, and resistance levels is September 30, 2021. The reference data in this report has been partly sourced from REFINITIV. 


CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by investors. Technical reports in general chart out metrics that may be assessed by investors before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.


Kalkine Equities LLC provides general information about companies and their securities. The information contained in the reports, including any recommendations regarding the value of or transactions in any securities, does not take into account any of your investment objectives, financial situation or needs. Kalkine Equities LLC is not registered as an investment adviser in the U.S. with either the federal or state government. Before you make a decision about whether to invest in any securities, you should take into account your own objectives, financial situation and needs and seek independent financial advice. All information in our reports represents our views as at the date of publication and may change without notice.

Kalkine Media LLC, an affiliate of Kalkine Equities LLC, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.