My Weekly Stock Debrief (June 21 - 24)
Dear subscribers,
Welcome to My Weekly Stock’s debrief for week #25 of 2022 (June 21 - 24), our weekly newsletter reviewing the stock market performance.
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1. Market Performance
The equity markets were up for the week, with the SP500 gaining 6.5%, the Dow Jones 5.4%, and the NASDAQ 7.5%. After hitting deeply oversold conditions and declining in 10 of the past 11 weeks, the SP500 was due for a bounce.
And while we may see further upside short term, we are not in a position to know if the indexes have finally found a bottom or if last week was just a bear market rally. The markets are still facing hurdles with record-high inflation and recession risks. In that context, economic and inflation reports, earnings results and guidance will be critical in the coming weeks.
2. SP500 Sector Performance
10 out of the 11 SP500 sectors closed the week higher. Consumer Cyclical and Healthcare led this week and finished up 8%. Energy lagged again and declined 3%.
Only 1 sector is positive year-to-date. Energy remains the indisputable winner of 2022 with a 29% gain. Communication Services and Consumer Cyclical are the worst performers in 2022.
3. SP500 Heatmap
92% of the SP500 was up last week. Cruise stocks were the best performers this week after Carnival (CCL) after the company published quarterly reports showing significant improvement in revenue, occupancy, and booking volumes.
Meanwhile, Energy stocks continued to lag due to concerns about the demand outlook..
4. SP500 Breadth
Momentum and breadth improved but remains bearish for the SP500. Almost eight stocks out of ten are trading below their respective 200 and 50-day moving average.
The number of new 52-week lows was still sizeable this week, and only 3 stocks made a new high.
5. SP500 Daily Chart
Technical indicators are improving; however, the SP500 is still trading below its 20, 50, and 200-day moving average.
RSI is currently at 48 and rising after touching the oversold zone the previous week, and we could have a cross-up on the MACD, signaling further upside ahead.
The index will face important tests in the coming weeks, with the 20-day and 50-day moving average just above. A reclaim of these trend lines could confirm that a low has been struck, and this week’s gain is not a mere bear market rally.
6. Market Sentiment
Fear & Greed Index
CNN's Fear & Greed Index tracks seven sentiment indicators and is published daily.
On Friday, the indicator closed at the “Fear” level (28), a 14-point improvement vs. the previous week. The VIX was down and closed at 27, still implying a high level of market uncertainty.
AAII Investor Sentiment Survey
The American Association of Individual Investors surveys each week its members on the direction of the stock market for the next six months. The results are published weekly on Wednesdays.
The last AAII survey reported that 59% of the respondents had a bearish market outlook, almost to the same level of the low end of April.
7. Our Earnings Chart of the Week
FedEx (FDX) is reporting earnings next week. The 1-day stock performance post-earnings were positive in 8 of the past 12 quarters, for a daily return of +2.7% and an average move of +/- 6% on the earnings day.
8. Our Favorite Analysis of the Week
While Energy is the only green sector in 2022, the sector lost half of its 2022 gains in the past 2 weeks.
9. The Week Ahead
Next week, few earnings releases are expected as the earnings season comes to an end, with Nike (NKE), Micron (MU) and General Mills (GIS) reporting quarterly results.
https://www.financegreater.com/earnings-calendar
Next week, more inflation reports are expected with CPI update forthe Eurozone and the release of the PCE Price Index on Thursday, the FED’s preferred measure for inflation.
10. My Weekly Stock Pick
This week, our stock pick was IBM, and the stock closed up 4.5% (Monday open to Friday close). In 2022, My Weekly Stock’s picks are up 10% cumulatively (no leverage, buy and hold five days), and our options trading is up 151%.
Access our performance tracking here.
We will trade a stock in the Technology sector for the week ahead. Our stock pick will be released on Sunday, and in the meantime, you can learn more about our trading approach in the article below:
Read more about our trading approach here.
And remember to subscribe to My Weekly Stock to receive our stock picks, trading plan, and buy/sell alerts directly in your mailbox.
That’s all for My Weekly Stock’s debrief for week #25 of 2022 (June 21 - 24).
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Have a lovely trading week,
My Weekly Stock
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