Stock Market Outlook for May 16, 2022
There are still questions over what the next week may deliver, but the technicals are certainly sufficient to take a stab back in risk (stocks).
*** 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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Optiva Inc. (TSE:OPT.TO) Seasonal Chart
iShares India 50 ETF (NASD:INDY) Seasonal Chart
WisdomTree India Earnings Fund (NYSE:EPI) Seasonal Chart
Target Corp. (NYSE:TGT) Seasonal Chart
CECO Environmental Corp. (NASD:CECE) Seasonal Chart
Washington R E I T (NYSE:WRE) Seasonal Chart
Invesco S&P 500 Equal Weight Real Estate ETF (AMEX:EWRE) Seasonal Chart
Silver Bull Resources, Inc. (TSE:SVB.TO) Seasonal Chart
iShares Global REIT ETF (AMEX:REET) Seasonal Chart
Perrigo Co. (NYSE:PRGO) Seasonal Chart
MagnaChip Semiconductor Corp. (NYSE:MX) Seasonal Chart
Vail Resorts, Inc. (NYSE:MTN) Seasonal Chart
The Markets
Stocks snapped back on Friday as the unwind of negative sentiment in the market had traders covering bearish bets. The S&P 500 Index gained 2.39%, opening an upside gap between 3930 and 3960. Momentum indicators are showing early signs of curling higher, recovering from the oversold extreme that was charted in the previous day when the Relative Strength Index (RSI) slipped below 30 intraday. A positive divergence on the MACD histogram has become apparent, providing very early hints of selling exhaustion. While the target of the massive head-and-shoulders topping pattern that has been charted over the past three quarters pointed to a downside target of 3780, the low charted on Thursday at 3858 (~80 points away from the hurdle) may be as good as it gets and the likelihood that we have seen the low for the first half of the year has just increased substantially following Friday’s bounce. The market remains in a seasonally soft period through the next week, followed by strength that is normal surrounding the Memorial day holiday period at month-end, therefore there are still questions over what the next week may deliver, but the technicals are certainly sufficient to take a stab back in risk (stocks).
Today, in our Market Outlook to subscribers, we discuss the following:
- The case for a rebound in the market from present levels and how we are positioning to take advantage
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Sentiment on Friday, as gauged by the put-call ratio, ended close to neutral at 0.99.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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