The stock market is screaming Recession and it looks like the companies have started responding. The number of Americans filing for first-time jobless claims rose to the highest level since early this year, a possible sign that companies might be going slow now. One data does not form a trend but it does indicate the obvious. Yesterday’s selling has shaken everyone. This is the second time the market has sold off violently after making a strong bullish move the previous day. Remember, When the US Fed made the policy announcement, the market rallied vertically with the sell-off on the following day; and then it happened again on Monday and Tuesday this week. Such price action breaks the conviction of dip buyers.
Will dip buyers step in to save Apple as it trades near support?
Buy the dip is not working but will Apple change that? Apple stock has come off a lot from the highs of 180 back to 138 – the level from where the rally started in October. Apple stock is standing at an important line of support. Ideally, Apple should find buying here.
Apple is also trading at 100 week moving average – a key support level. During the 2020 covid sell off, Apple stock found its bottom at 100 week ma. Will history repeat itself? There is extreme negativity and a key blue-chip stock at support. You can decide 🙂
Cisco disappoints on all fronts
I hate when a stock gaps down on earnings because it drives more selling. Cisco stock has done just that. The company not only posted disappointing sales numbers for the last quarter but also issued weak guidance for the current quarter and now expects revenue to fall between 1 and 5.5% instead of earlier guidance of an increase in sales of 6%. This is the last thing the market wants to hear right now. No wonder stock is down big. Now, if you look at the numbers, everything will look good from dividend yield to PE ratio but we have seen what happens when a stock plunges Gap down on bad earnings.
Just FYI…Target is down another 6% today
Lucid LCID gets cash from Saudi Arabia Government
Lucid Motors, the luxury Electric Vehicle maker has sound backing from the Saudi Arabia Govt which seems to be flushed with cash thanks to higher oil prices and is committing more capital to Lucid Motors. Over the last week, there have been some +ve price action movements in EV plays like Rivian. LCID is making a big move but should we buy? I will skip in the current market environment.
This is not a market to recommend anything. I continue to hold United Airlines and Southwestern Energy. AZPN is moving up again.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purposes. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers
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