Stock Market Outlook for August 25, 2022
Durable goods orders showed a significant plunge in July, but there are still segments in the manufacturing economy to be invested in.
*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities. As always, the use of technical and fundamental analysis is encouraged in order to fine tune entry and exit points to average seasonal trends.
Stocks Entering Period of Seasonal Strength Today:
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Costco Wholesale Corp. (NASD:COST) Seasonal Chart
DuPont de Nemours, Inc. (NYSE:DD) Seasonal Chart
DaVita Inc. (NYSE:DVA) Seasonal Chart
ATN International, Inc. (NASD:ATNI) Seasonal Chart
Daktronics, Inc. (NASD:DAKT) Seasonal Chart
Dr. Reddy’s Laboratories Ltd (NYSE:RDY) Seasonal Chart
Gorman-Rupp Co. (NYSE:GRC) Seasonal Chart
The Markets
Stocks ticked higher on Wednesday, providing a bit of a reprieve to the selling pressures that were realized to start the week. The S&P 500 Index closed higher by just less than three-tenths of one percent, once again taking a swing at horizontal resistance near 4170. The relative strength index (RSI) is back hovering around its middle line after falling from significantly overbought levels recorded through the middle of the month and progress is being made to flip the script away from the bearish path that dominated through the first half of the year. Typically, following an overbought rally, the market does not immediately revert back to a bearish path without some catalyst to bring upon an abrupt shift. Still, further consolidation of the strength that has been realized since the lows of the market in June is seen as likely before a rising intermediate trend is solidified, ideally around the now rising 50-day moving average at 3981. Gap resistance between 4195 and 4218 is seen as the near-term cap. This is the most volatile time of the year for stocks, so we are always on the lookout for shenanigans in this low volume summer trade, but there is still sufficient evidence to suggest that the June bottom was the low for this year and that the intermediate trend of stocks has shifted.
Today, in our Market Outlook to subscribers, we discuss the following:
- Opportunity in Japanese equities
- US Durable Goods Orders
- Weekly Petroleum Status and the state of demand
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Sentiment on Wednesday, as gauged by the put-call ratio, ended slightly bullish at 0.91.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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