US Technical Analysis Report

Two NASDAQ-Listed Stocks Trading in a Positive Zone as Russell 3000 Tick Higher – TERN, NDLS

Oct 14, 2022 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; however, it gained later. The index made a high of 2136.351 during the week and settled at 2127.598 with a week-to-date (WTD) gain of ~0.71 percent on October 13, 2022. Other major indices, such as S&P 500 and NASDAQ Composite witnessed a mixed movement for the week. On October 13, 2022, the S&P 500 index settled at 3669.89 with a WTD gain of ~0.83 percent, while the NASDAQ Composite Index settled at 10649.152 with a WTD loss of ~0.03 percent.

The Producer Price Index (PPI) data released during the week supported the indices. Notably, the core CPI rose 0.6% for a second month, according to data released by the US Labor Department. The CPI also climbed 0.4% in September compared to August. 

Having understood the US market performance over the week, taking cues from major global news, and based on technical analysis of the Russell 3000 index for the upcoming week, now let’s have a look at the two NASDAQ listed stocks to pick from the technical standpoint. Noted below recommendations are based on the entry price, target prices, and stop-loss for Terns Pharmaceuticals, Inc. (NASDAQ: TERN) and Noodles & Company (NASDAQ: NDLS) for the next 2-4 weeks duration: 

Terns Pharmaceuticals, Inc.

Terns Pharmaceuticals, Inc. (NASDAQ: TERN) is a clinical-stage biopharmaceutical company that develops drugs and therapies to treat liver diseases. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart)

TERN’s prices recently broke the neckline of a rounding bottom pattern (bullish reversal) by an upside and are trading above the breakout level, indicating the possibility of further upside movement. The trendline breakout is supported by increased volumes, supporting a positive bias. Now the next major resistance level for the stock appears at USD 8.20, and prices may test this level in the short-term (2-4 weeks). A further movement above USD 8.20 may extend buying in the stock.


Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, the leading indicator RSI (14-period) is moving in a positive zone and shows a reading of 68.51. The volumes seem supportive of the next upside movement. The prices are trading above the trend-following indicators 21-period and 50-period SMA, which may act as the support levels in the near term.

General Recommendation

As per the above-mentioned price action and technical indicators analysis, Terns Pharmaceuticals, Inc. is looking technically well-placed on the chart, and a ‘Speculative Buy’ recommendation has been given on the stock. Investment decision should be made depending on an individual’s 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 recommendation is as follows:

Noodles & Company

Noodles & Company (NASDAQ: NDLS) is a restaurant concept company that offers international and American noodles dishes. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Daily Chart)

NDLS' prices witnessed the breakout of a symmetrical triangle pattern on the charts and are sustaining above the breakout level for the past couple of sessions, indicating the possibility of an upside reversal hereon. The pattern breakout is supported by a sharp increase in the volumes, further supporting a positive bias. Now the next major resistance level for the stock appears at USD 6.15, and prices may test this level in the short-term (2-4 weeks). A further movement above USD 6.15 may extend buying in the stock.

Technical Indicators Analysis (On the Daily Chart)

On the daily chart, the leading indicator RSI (14-period) is moving in a positive zone and shows a reading of 61.71. The volumes also seem supportive of the next upside movement. The prices are trading above the trend-following indicators 21-period and 50-period SMA, further supporting a positive bias.

General Recommendation

As per the above-mentioned price action and technical indicators analysis, Noodles & Company is looking technically well-placed on the chart, and a ‘Speculative Buy’ recommendation has been given on the stock. Investment decision should be made depending on an individual’s 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 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:

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