US Markets Round-Up

This week, the Russell 3000 index, an important benchmark of the US stock market across market capitalizations, started on a slightly positive note; however, it settled at 2282.41 with a week-to-date (WTD) loss of ~1.42 percent on November 17, 2022. Other major indices such as S&P 500 and NASDAQ Composite, also witnessed a bearish movement for the week. On November 17, 2022, the S&P 500 index settled at ~3946.55 with a WTD loss of ~1.16 percent, while the NASDAQ Composite Index settled at 11144.96 with a WTD loss of ~1.58 percent.

The market sentiments turned bearish due to the release of negative economic data during the week, such Manufacturing Business Outlook Survey and Producer Price Index. However, improved Retail Sales and Unemployment Insurance Weekly Claims numbers limited the losses. 

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 NYSE-listed stocks to pick from the technical standpoint. Noted below recommendations are based on the entry price, target prices, and stop-loss for Gap, Inc. (NYSE: GPS) and Boot Barn Holdings, Inc. (NYSE: BOOT) for the next 2-4 weeks duration: 

Gap, Inc.

Gap, Inc. (NYSE: GPS) is an apparel retail company that deals under the Old Navy, Gap, Banana Republic, and Athleta brands. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Daily Chart)

GPS' prices recently broke the neckline of a double bottom (bullish reversal) pattern by an upside and are consolidating above the same, indicating the possibility of an upside movement hereon. The pattern breakout is accompanied by the increased volume, further supporting a positive bias. Now the next major resistance level for the stock appears at USD 14.50, and prices may test this level in the short-term (2-4 weeks). A further movement above USD 14.50 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 showing a reading of 65.40. 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, Gap, 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:

Boot Barn Holdings, Inc.

Boot Barn Holdings, Inc. (NYSE: BOOT) is a lifestyle retailer that deals in footwear, apparel, and accessories in the United States. Noted below are the key price indicators for the stock:

Price Action Analysis (on the daily Chart)

BOOT's prices broke a downward sloping trendline by an upside and are sustaining above the breakout level for the past couple of sessions, indicating the possibility of further upside move hereon. Now the next major resistance level for the stock appears at USD 70.50, and prices may test this level in the short-term (2-4 weeks). A further movement above USD 70.50 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 above the midpoint and shows a reading of 54.71. The volumes also seem supportive of the next upside movement. The prices are trading above the trend-following indicators 21-period SMA and 50-period SMA, which may act as dynamic support zones in the near term.

General Recommendation

As per the above-mentioned price action and technical indicators analysis, Boot Barn Holdings, 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:

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: