When you're into conventional or online stock trading, you'd want to listen to the advice of stock market experts since their analysis could help you plan your strategy in a wise manner, in line with the market conditions.
According to HSBC, the US market could continue to head in a bullish direction. We know it is true that the average year-end target held by Wall Street for the S&P 500 is only 2% higher than the last week where it closed, but HSBC technical strategists believe that the stocks could move higher.
FANG Stocks and Industrials Could Rise
It is expected that the FANG stocks made up of Facebook, Amazon, Netflix, and Alphabet, and the industrials are the major S&P 500 components that could break out. The industrial sector has the momentum running higher thanks to a positive cyclical trend indicator. This is an indication that the moving average 200-day slope indicates positive momentum and could signal a move further or higher. So far, this sector is around 5% up this year as the broader S&P 500 is up only under 3%.
The FANG stocks have become stronger though they had a slow start to the year, which can be taken as indicative of a potential melt up in US stocks, with these four FANG stocks having breached the resistance line. HSBC's bullish view may not exactly be in agreement with investor behavior and recent market action, particularly when considering that the safe haven utility stocks are gathering behind last week's depressing jobs report. There have also been billions in inflows for low-volatility ETFs, which indicate that the current environment is leading investors to play defense.
Other Points to Note
Investors who are worried about US growth slowing thanks to the poor jobs data could avoid industrial stocks that are cyclically sensitive. Wall Street still believes that, overall, equities could end the year in the position they are today. Bloomberg data reveals that the highest S&P 500 estimate is 2,325 from an expert of Fundstrat Global Advisors, which is 11% higher that position at which S&P closed on Friday, June 3, 2016.
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