On Friday the US indices closed mixed with the Dow Jones up +0.56%, and Nasdaq and S&P500 up -2.05% and -0.88% respectively. This is a result of their lower exposure to BigTech, the dangers of inflation on the dollar and US consumer price data their favorite inflation indicator. This week we have as key data releases from the Tech sector that will emerge this week with their quarterly earnings releases, also from the banking sector. This is a stress-test for U.S. equities as interest expectations of cutting inflation have faded. The Magnificent Seven (META / MICROSOFT/ ALPHABET / APPLE / NVIDIA/AMAZON/TESLA) will move the Nasdaq very strongly with their quarterly balance sheets. All of them are experiencing significant cuts in their international operations.
Dow Jones has a five-year average five-year BETA of 0.86, S&P500 has a BETA of 1, and Nasdaq has a Beta of 0.94. Beta is always taken as a benchmark for stocks relative to the market, with S&P500 being the benchmark measure, so a Beta greater than 1, averages higher than the S&P500. In this case we see that Dow is reflecting a lower beta and hence also that its price movement is not as close to the benchmark.
If we look at Dow Jones, its RSI is currently oversold by 64.50%, which indicates that the price could recover to 38,493 points and then continue its fall. On the other hand, the price control zone is at 39,000 points, so this clearly indicates that it will return to that trading area if the results go well. Although the market data is not turning out to be as positive as it should to be able to mark any change of trend in the long term.
Ion Jauregui - AT Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Dow Jones has a five-year average five-year BETA of 0.86, S&P500 has a BETA of 1, and Nasdaq has a Beta of 0.94. Beta is always taken as a benchmark for stocks relative to the market, with S&P500 being the benchmark measure, so a Beta greater than 1, averages higher than the S&P500. In this case we see that Dow is reflecting a lower beta and hence also that its price movement is not as close to the benchmark.
If we look at Dow Jones, its RSI is currently oversold by 64.50%, which indicates that the price could recover to 38,493 points and then continue its fall. On the other hand, the price control zone is at 39,000 points, so this clearly indicates that it will return to that trading area if the results go well. Although the market data is not turning out to be as positive as it should to be able to mark any change of trend in the long term.
Ion Jauregui - AT Analyst
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.