Is the US market changing its character

It is the behavior of the market that tells the state of the market.

2022 was a terrible year. But things seem to be changing in 2023. Traders are now buying the bad news and today is the perfect day to understand this. The US market fell sharply after a hotter-than-expected inflation report. The consumer price index, which measures a broad basket of common goods and services, rose 0.5% in January, translating to an annual gain of 6.4%. Ideally, the market would have sold off. But here’s the surprising thing – after a brief sell-off, the US market staged a strong comeback. This is highly bullish and is not the first time the market has exhibited this characteristic this year.

Palantir PLTR – The Smell of Profit

The company posted its first-ever profitable quarter on a GAAP basis and the stock is up 15%. There is tremendous momentum and the stock can go much higher. One can buy with a stop loss below 8. See the chart

The market is rewarding companies that are delivering +ve earnings growth. Uber is another example.

This is a trading market and one should be happy to take 20% profit in any trade. This is not the market to ride and hold positions for a long period of time.

Cloudflare NET – AI is the new buzzword

The market has changed. It wants everything from sales growth to profit to new opportunities. Cloudflare offers everything. Cloudflare released fourth-quarter 2022 results on Feb. 9, and it was an impressive show. The revenue was up 42% over the prior-year period to $275 million. Its adjusted net income jumped to $0.06 per share from breakeven in the year-ago quarter. The company seems to be doing all the right things. No wonder the stock is moving higher. The stock is headed towards 80

Global Foundries GFS – Breakout with Earnings

Global Foundries came out with a strong earnings report and it has triggered a breakout on the chart. This makes the stock attractive for more gains. See the chart

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