Stock Trends

Software focus, medical devices are strong and energy problems are piling up

Good morning,

Markets continue to be volatile and yesterday’s CPI print failed to provide a definitive path forward for the broad indexes, even if the close was encouraging.

Luckily, at the individual equity level, there are always opportunities and today’s report will highlight industry-level groups with opportunities on the long and short side.

This week, we’ll review:

• Diverse charts in software

• Relative strength from medical devices

• Problems in the energy sector

• A reversal of fortunes within communications

• Hot List updates

• and more!

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Software focus

Oracle gaps up on earnings. Again…

Oracle popped 11.4% following its Monday evening earnings report. This is obviously bullish action and is becoming a pattern, however, note that the last 2 such spikes have seen the gap filled before the uptrend continued. $145 is support.

Adobe earnings after the close today

Adobe reports earnings after the close today so action on Friday should determine whether the stock fails at $575 again or breaks back through. While not an earnings call, I have a positive bias toward the stock, as the relative trend has turned higher.

Watching potential head and shoulders in Microsoft

Despite a lot of strength in the industry, the largest software stock hasn’t done much, until now. MSFT is up strong the last 2 days, breaking a short-term downtrend. It needs to get up above $432 to help nullify a potential H&S that would be formed with a break of $385.

Palantir to be added to the S&P 500

PLTR is hitting its highest level since February 2021 this week and continues to do everything right technically. However, while valuation is not a catalyst, this is another stock I wouldn’t get married to. Its price-to-sales ratio is back above 30, closing in on its peak valuation from early 2021.

NOW looks great

Another software stock with a lofty valuation, it’s hard to not like ServiceNow. The stock is hitting 52-week highs and has just broken out of a 6-month base sitting on top of a multi-year base. $800 or $700 could be used as stops depending on your risk tolerance.

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Medical devices are strong