US Markets Round-Up

This week, the Russell 3000 index, an important benchmark of the US stock market across various market capitalizations, started on a negative note and continued in the same direction. The index made a low of 2,222.89 during the week and settled at 2,264.05 with a week-to-date (WTD) loss of ~4.89% on May 12, 2022. Other major indices such as S&P 500 and NASDAQ Composite also showed sharp bearish movement throughout the week. On May 12, 2022, the S&P 500 index settled at 3,930.08 with a WTD loss of ~4.69% and the NASDAQ Composite Index settled at 11,370.962 with a WTD loss of ~6.37%.

The ongoing geopolitical scenario coupled, with the fear of rising interest rate risks, and the increase in the initial jobless claims number to 203,000 from 202,000 (revised level) in the prior week acted as the catalysts for the negative sentiments. Notably, as per the latest release from the US Bureau of Labour Statistics, the Consumer Price Index (CPI) declined to 8.3% in April 2022 compared to 8.5% in March 2022.

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 PJT Partners Inc. (NYSE: PJT) and Clearwater Paper Corporation (NYSE: CLW) for the next 2-4 weeks duration:

PJT Partners Inc. 

PJT Partners Inc. (NYSE: PJT) is an advisory-focused investment bank. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Daily Chart)

PJT has broken a downward sloping trend line towards the upside on April 19, 2022, and since then has been trading above the breakout level, indicating the possibility of further upside movement. The recent upside movement in the stock is backed by increasing volumes as well, supporting a positive bias. Now the next major resistance level for the stock appears at USD 80.00 and prices may test this level in the short-term (2-4 weeks). A further movement above USD 80.00 may extend buying in the stock. 

Technical Indicators Analysis (On the Daily Chart)

On the daily chart, the leading indicator RSI (14-period) is showing a reading of 66.25, indicating a positive momentum build-up at the current levels. Prices are trading above the trend-following indicator 21-period SMA and 50-period SMA, further supporting an up-move.

General Recommendation

As per the above-mentioned price action and technical indicators analysis, we can conclude that PJT Partners Inc. is looking technically well-placed on the chart, and we have a ‘Speculative Buy’ rating on the stock. Investment decisions should be made depending on an investor’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 our recommendation is as follows:

Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Clearwater Paper Corporation

Clearwater Paper Corporation (NYSE: CLW) is a paper products company that manufactures and supplies bleached paperboard and consumer and parent roll tissue. Noted below are the key price Indicators for the stock: 

Price Action Analysis (on the Daily Chart)

CLW has broken a crucial resistance level of USD 30.79 on April 29, 2022, and since then has been sustaining above the breakout level, indicating the possibility of an upside movement hereon. Now the next major resistance level for the stock appears at USD 38.90 and prices may test this level in the short-term (2-4 weeks). A further movement above USD 38.90 backed by volumes may extend buying in the stock.

Technical Indicators Analysis (On the Daily Chart)

On the daily chart, the leading indicator RSI (14-period) is showing a reading of 64.94, indicating a positive momentum build-up at the current levels. Prices are trading above the trend-following indicator 21-period SMA and 50-period SMA, further supporting an up-move.

General Recommendation

As per the above-mentioned price action and technical indicators analysis, we can conclude Clearwater Paper Corporation is looking technically well-placed on the chart, and we have a ‘Speculative Buy’ rating on the stock. Investment decisions should be made depending on an investor’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 our recommendation is as follows:

Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

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