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US Technical Analysis Report

Russell 3000 Traded Lower, 2 Stocks with an Upside Potential– QGEN, CXP

Aug 20, 2021

US Markets Round-Up

This week, the Russell 3000 index, an important benchmark of the US stock market across market capitalizations, started on a flat note and thereafter traded with a negative bias for the entire week. It made a low of 2584.75 during the week and settled at 2601.55 with a week till date (WTD) loss of ~1.77 percent on Aug 19, 2021. Other major indices such as S&P 500 and NASDAQ Composite also showed negative movement for the week.On Aug 19, 2021, the S&P 500 index settled at 4405.80 with a WTD loss of ~1.39 percent, while NASDAQ Composite Index settled at 14541.79 with a WTD loss of ~1.90 percent.

The market reacted negatively after the indication by FOMC to start reducing asset purchases before the end of the year in the latest meeting minutes. The officials emphasized that there is no relationship between tapering and interest rate hikes. However, a decline in the US weekly unemployment claims to 348,000 from 377,000 (revised level) in the prior week restricted further downside movement in the indices.  

Having understood the US market performance over the week, taking cues from major global news, and based on our technical analysis of the Russell 3000 index for the upcoming week, now let us have a look at the two NYSE/ NASDAQ listed stock picks from the technical standpoint. Noted below are our recommendations based on generic insights, entry price, target prices, and stop-loss for Qiagen NV (NYSE: QGEN) and Columbia Property Trust Inc (NYSE: CXP) for the next 2-4 weeks duration:

Qiagen NV 

Qiagen NV (NYSE: QGEN) is a holding company engaged in the transformation of biological samples into molecular insights. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart) 

QGEN's prices are sustaining above a downward sloping trend line for the past 1 month, indicating an upward direction for the stock. Prices are also getting support from the 50-period SMA on the weekly chart, further suggesting an upward trend. Now the next major resistance level for the stock appears at USD 60.00 and prices may test the level in the short-term (2-4 weeks). A further breakout above USD 60.00 backed by volumes may extend buying in the stock.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~56.27 levels and is indicating a positive trend for the stock. The weekly volumes also seem supportive of an upside movement. The CMP is above the 50-period SMA and 21-Period SMA, further providing support for an upward direction.

Financial Summary:

Summary of the Key Financial Metrics for the past four years for Qiagen NV is as follows:

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, we can conclude that Qiagen NV is looking technically well-placed on the chart, and we have a ‘Buy’ rating on the stock. Investment decision should be made depending on an investors’ appetite on 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 our recommendation is as follows:

Columbia Property Trust Inc

Columbia Property Trust Inc. (NYSE: CXP) is a real estate investment trust (REIT) that deals in commercial real estate properties. Noted below are the key price Indicators for the stock:

Price Action Analysis (on the Weekly Chart)

CXP's price has witnessed a correction from the higher levels for the past 2 months and has recently started to move up after forming a Piercing Line (bullish reversal) candlestick pattern on the weekly chart, indicating an upside direction for the stock. The stock has also taken support at the downward sloping trend line, further indicating a positive stance. Now the next resistance level for the stock appears at USD 19.50 and this may get tested in the coming sessions. A further breakout above USD 19.50 backed by good volumes may extend buying in the stock till USD 20.15 level.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~52.91 levels and is indicating a positive trend for the stock. The weekly volumes also seem supportive of an upside movement. The CMP is above the 50-period SMA, providing support for the up move; however, the 21-period SMA acts as a resistance level for the stock.

Financial Summary: 

Summary of the Key Financial Metrics for the past four years for Columbia Property Trust Inc is as follows: 

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, we can conclude that Columbia Property Trust Inc is looking technically well-placed on the chart, and we have a ‘Buy’ rating on the stock. Investment decision should be made depending on an investors’ 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 our recommendation is as follows:

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.

Investment Related Risks: Based on the technical analysis, the risks are defined as per risk-reward ratio (~0.60:1.00), however, returns are generated within 2-4 weeks’ time frame. This may be looked at by Investors with sufficient risk appetite looking for returns within short investment duration. Investment recommendations provided in this report are solely based on technical parameters, and 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, and social and political instability risks etc.

Entry Price: For the given recommendation(s), Entry Price is assumed be at or above a certain level. However, a slight deviation on either side in the ‘Entry Price’ can be considered depending upon the potential expected or indicated.

Note 1: Investors 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?

The Green colour line reflects the 21-period moving average while the red line indicates the 50- period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Risk Reward Ratio: Risk reward ratio is the difference between an entry point to a stop loss and profit level. We suggest ~60% Stop Loss of the Target 1 from the entry point. 

A trailing stop-loss is a modification of stop-loss in case of favourable movement in the price to protect the gains. We suggest Investors to Trail the Stop-Loss as per the aforementioned levels if the stock price achieves more than 60% of the Target 1. Investors should consider exiting from the position as per the Trailing Stop-Loss level if the price starts moving downwards after achieving more than 60% of the Target 1. 

The reference date for all price data, volumes, technical indicators, support, and resistance levels is Aug 19, 2021. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by investors. Technical reports in general chart out metrics that may be assessed by investors before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.


Disclaimer-

Kalkine Equities LLC provides general information about companies and their securities. The information contained in the reports, including any recommendations regarding the value of or transactions in any securities, does not take into account any of your investment objectives, financial situation or needs. Kalkine Equities LLC is not registered as an investment adviser in the U.S. with either the federal or state government. Before you make a decision about whether to invest in any securities, you should take into account your own objectives, financial situation and needs and seek independent financial advice. All information in our reports represents our views as at the date of publication and may change without notice.

Kalkine Media LLC, an affiliate of Kalkine Equities LLC, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.