Stock Market Outlook for April 5, 2022
Industries in the technology sector are breaking above former levels of resistance around their 50-day moving averages, which has us reconsidering our underweight allocation to the sector for the month of April.
*** 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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Twilio Inc. (NYSE:TWLO) Seasonal Chart
Cohen & Steers REIT and Preferred and Income Fund, Inc. (NYSE:RNP) Seasonal Chart
Paycom Software, Inc. (NYSE:PAYC) Seasonal Chart
Enbridge, Inc. (NYSE:ENB) Seasonal Chart
KAR Auction Services Inc. (NYSE:KAR) Seasonal Chart
Live Nation Entertainment, Inc. (NYSE:LYV) Seasonal Chart
Black Diamond Group Ltd. (TSE:BDI.TO) Seasonal Chart
The Markets
Stocks clawed their way higher on Monday as strength in the technology sector piqued investors interest to buy some of the names that had been beaten down during the stampede away from growth during the first quarter. The S&P 500 Index gained just over eight-tenths of one percent, continuing to hold support around major moving averages, along with the horizontal level of significance at 4530. Gradually, this has become a market that is more willing to respect levels of support and break levels of resistance, which is the opposite scenario of what was observed through the first two and a half months of the year. Momentum indicators, while rolling over in recent days, remain on a positive trajectory having broken trends of lower-lows and lower-highs that had been seen between the middle of November and the middle of March. Our call has been that ramped up equity exposure is appropriate between the middle of March and the middle of April to take advantage of the mean reversion rally through quarter-end and the start of quarter inflows through the first half of April. We see no reason to retrench from our elevated risk exposure yet, but as we near the middle of April and close in on our timeframe of when the next downfall in equities is likely, we will heavily scrutinize our exposure and be willing to become more conservative, as appropriate. We are still in this trading environment and adjusting risk exposure in the portfolio has been highly effective to stay ahead of the market during the first few months of the year.
Today, in our Market Outlook to subscribers, we discuss the following:
- Industries in the technology sector retaking levels above previous resistance around their 50-day moving averages
- Notable changes in this week’s chart books: Find out what has been upgraded to Accumulate this week
- US Factory Orders
- Copper
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Sentiment on Monday, as gauged by the put-call ratio, ended bullish at 0.82.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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