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 remained volatile. The index made a low of 2386.448 during the week and settled at 2435.169 with a week-to-date (WTD) loss of ~0.50 percent on August 25, 2022. Other major indices such as S&P 500 and NASDAQ Composite also witnessed bearish momentum for the week. On August 25, 2022, the S&P 500 index settled at 4199.120 with a WTD loss of ~0.69 percent, while the NASDAQ Composite Index settled at 12639.265 with a WTD loss of ~0.52 percent.

The market remained volatile due release of mixed economic data where positive Services PMI, Pending Home Sales, and Unemployment Insurance Weekly Claims limited the downside movement. As per the US Department of Labor, the weekly Unemployment Insurance Claims numbers decreased to 243,000 from 245,000 (revised level) in the prior week.

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/NYSE listed stocks to pick from the technical standpoint. Noted below recommendations are based on the entry price, target prices, and stop-loss for Kingsoft Cloud Holdings Limited (NASDAQ: KC) and Regis Corporation (NYSE: RGS) for the next 2-4 weeks duration: 

Kingsoft Cloud Holdings Limited

Kingsoft Cloud Holdings Limited (NASDAQ: KC) is a holding company that provides online cloud storage and cloud distribution services. Noted below are the key price indicators for the stock: 

Price Action Analysis (on the Daily Chart) 

KC's prices recently broke a downward sloping trendline by an upside and are sustaining 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, further supporting a positive bias. Now the next major resistance level for the stock appears at USD 4.00, and prices may test this level in the short-term (2-4 weeks). A further movement above USD 4.00 may extend buying in the stock.

Technical Indicators Analysis (On the Daily Chart) 

On the daily chart, the leading indicator RSI (14-period) is moving in a positive zone and showing a reading of 52.52. The volumes seem supportive for the next upside movement. The prices are trading above the trend-following indicator 21-period SMA, which may support the prices; however, the 50-period SMA is moving above the CMP, which may act as a resistance level.

General Recommendation 

As per the above-mentioned price action and technical indicators analysis, Kingsoft Cloud Holdings Limited 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:

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

Regis Corporation

Regis Corporation (NYSE: RGS) is a United States-based hair salon company that franchises, owns, and operates beauty parlours. Noted below are the key price indicators for the stock: 

Price Action Analysis (on the Weekly Chart) 

RGS’ prices broke a downward sloping trendline by an upside and are sustaining above the breakout zone from the past 2 weeks, indicating the possibility of further upside movement. The recent upside movement in the stock is backed by increasing volumes as well, further supporting a positive bias. Now the next major resistance level for the stock appears at USD 1.85 and prices may test this level in the short-term (2-4 weeks). A further movement above USD 1.85 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 above the midpoint and showing a reading of 53.91. The volumes seem supportive for the next upside movement. The prices are trading above the trend-following indicator 21-period SMA, which may support the prices; however, the 50-period SMA is moving above the CMP, which may act as a resistance level.

General Recommendation 

As per the above-mentioned price action and technical indicators analysis, Regis Corporation 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: 

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

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