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 high of 2662.36 on February 02, 2022. The index witnessed some correction in the previous session and settled at 2594.10 with a week-to-date (WTD) gain of ~1.06 percent on February 03, 2022. Other major indices such as S&P 500 and NASDAQ Composite also showed upside movement for the week. On February 03, 2022, the S&P 500 index settled at 4477.44 with a WTD gain of ~1.03 percent, while NASDAQ Composite Index settled at 13878.818 with a WTD gain of ~0.79 percent.

The market sentiments were supported by positive economic data releases during the week such as JOLTS job openings and initial jobless claims. As per the U.S. Bureau of Labor Statistics, the US weekly initial jobless claims numbers decreased to 238,000 from 261,000 (revised level) in the prior week. However, a decrease in ISM Services PMI numbers limited the upside gains in 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, the two NYSE/ NASDAQ listed stocks worth noticing from the technical standpoint. Noted below are the recommendations based on generic insights, entry price, target prices, and stop-loss for Cleveland-Cliffs Inc (NYSE: CLF) and Revolve Group Inc (NYSE: RVLV) for the next 2-4 weeks duration:

Cleveland-Cliffs Inc 

Cleveland-Cliffs Inc (NYSE: CLF) is a metals & mining company that produces flat-rolled steel and manufactures iron ore pellets in North America. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart) 

CLF has been sustaining above an upward sloping trend line for the almost past two years and recently gained traction after touching the support of the same trend line, depicting some buying emerging from those levels. The recent upside movement in the stock is backed by volumes as well, further supporting a positive bias. From here, the next major resistance level for the stock appears at USD 21.75 and prices may test this level in the short-term (2-4 weeks). A further movement above USD 21.75 may extend buying in the stock.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI (14-period) is recovering from the lower levels and trading at 44.68 levels, indicating a positive trend for the stock. The volumes also seem supportive of the upside movement. However, the trend-following indicators 21-period SMA and 50-period SMA are above the CMP and may act as the resistance levels.

Financial Summary

Summary of the Key Financial Metrics for the past four years for Cleveland-Cliffs Inc is as follows:

General Recommendation

As per the above-mentioned price action and technical indicators analysis, we can conclude that Cleveland-Cliffs Inc is looking technically well-placed on the chart, and we recommend a ‘Buy’ rating on the stock. Investment decision should be made considering the risk and reward ratio as per the financial constraints and liquidity preferences. 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:

Revolve Group Inc

Revolve Group Inc (NYSE: RVLV) is an online fashion retailer that operates through two segments: Revolve and Forward. Noted below are the key price Indicators for the stock: 

Price Action Analysis (on the Weekly Chart)

RVLV has been keeping above the upward slopping trendline and the recent dip was bought into, indicating further strength in the stock price leading to the North. Now the next major resistance level for the stock appears at USD 58.00 and prices may test this level in the short-term (2-4 weeks). A further movement above USD 58.00 may extend buying in the stock.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI (14-period) is recovering from the lower levels and trading at 40.83 levels, indicating a positive trend for the stock. The volumes also seem supportive of the upside movement. However, the trend-following indicators 21-period SMA and 50-period SMA are above the CMP and may act as the resistance levels.

Financial Summary 

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

General Recommendation

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