US Markets Round-Up

This week, the Russell 3000 index, an important benchmark of the US stock market across market capitalizations, started on a negative note and continued the momentum. The index made a low of 2148.087 during the week and settled at 2185.440 with a week-to-date (WTD) loss of ~3.00 percent on July 14, 2022. Other major indices such as S&P 500 and NASDAQ Composite also witnessed bearish momentum for the week. On July 14, 2022, the S&P 500 index settled at 3790.38 with a WTD loss of ~2.80 percent, and the NASDAQ Composite Index settled at 11251.185 with a WTD loss of ~3.30 percent.

As per the U.S. Department of Labor, the US Unemployment Insurance Weekly Claims increased to 244,000 from 235,000 (unrevised level) in the prior week and supported the bearish movement. However, improved Consumer Price Index (CPI) and Producer Price Index (PPI) numbers limited the losses.

Having understood the US market performance over the week, taking cues from major global news, and based on technical analysis of the Russell 3000 index for the upcoming week, now let us have a look at the one NYSE/ NASDAQ listed stock pick from the technical standpoint. Noted below is the recommendation based on generic insights, entry price, target prices, and stop-loss for Bitfarms Ltd (NASDAQ: BITF) for the next 2-4 weeks duration: 

Bitfarms Ltd. 

Bitfarms Ltd. is a global Bitcoin self-mining company based in Canada mainly engaged in cryptocurrency mining and operates in North America. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Daily Chart)

BITF’s prices started to move upside after forming a positive divergence with RSI (14-period) at the lower levels and recently broke a downward sloping trend line by an upside, indicating the possibility of further upside movement hereon. Now the next major resistance level for the stock appears at USD 1.40 and prices may test this level in the short-term (2-4 weeks).  

Technical Indicators Analysis (On the Daily Chart)

On the daily chart, the leading indicator RSI (14-period) is recovering from lower levels and showing a reading of 38.61. The volumes seem supportive for an upside movement. However, the prices are trading below the trend-following indicator 21-period SMA and 50-period SMA, which may act as the resistance levels for the stock.

General Recommendation

As per the above-mentioned price action and technical indicators analysis, Bitfarms Ltd. is looking technically well-placed on the chart, and a ‘Speculative Buy’ recommendation has been given on the stock. Investment decision should be made depending on an individual’s appetite for upside potential, risks, and any previous holdings. This recommendation is purely based on technical analysis, and fundamental analysis has not been considered in this report. The summary of recommendation is as follows:

Markets are trading in a highly volatile zone currently due to certain macro-economic and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Upcoming Major Global Economic Events

Market events occur on a day-to-day basis depending on the frequency of the data and generally include an update on employment, inflation, GDP, consumer sentiments, etc. Noted below are the upcoming week's major global economic events that could impact the Russell 3000 Index and stocks’ prices:

Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.

Note 1: Individuals can consider exiting from the stock if the Target Price or Stop loss mentioned as per the technical analysis has been achieved and subject to the factors discussed above. 

Note 2: How to Read the Charts?