May 2024 Monthly Recap and Weekly Commentary

Hello folks,

It was a nice turnaround for the stock market in May after a somewhat turbulent April. The S&P 500 climbed 5.4% for the month, while the Nasdaq 100 surged even higher with a 6.9% gain. Both indexes even reached record highs by mid-May, fueling investor optimism.

However, the rally wasn't without its nervous moments. During last two weeks, concerns about persistent inflation and chances that FED will not decrease interest rates this year, a potential economic slowdown, and higher stock valuations caused the market to pull back especially on Thursday.

On Friday, initially Markets slumped but later turned higher and during last 30 minutes rebounded close to previous highs (except for S&P 500). Despite the positive momentum, some analysts sounded cautionary notes, highlighting lingering economic headwinds that could impact future market performance.

We, therefore, need to be nimble and careful while making our selection and take away some profits off the table to avoid losses due to sharp pullbacks. Nvidia is a prime example, it is at its highest levels and has surprised most investors and traders. It is likely to continue its upward trajectory and its 10 to 1 stock split on 10th June will further entice retail traders, however, it is currently extended and will likely provide better entry points after a pullback.

Actionable Stocks:

Long-Term View: These stocks were highlighted for long-term holdings in our last commentary:

MSFT:

Although Microsoft has pulled back mildly, but long-term it is still a buy at current levels. Microsoft is enjoying current wave of AI along with Nvidia and is likely to continue its trend in the long run.

NVDA:

See our notes above on Nvidia

AAPL:

Mentioned last week as a long-term buy, Apple has cleared the 187 trendline and testing 193 level. The worldwide Developers' conference is scheduled for June 10th and it will be a closely watched event as Apple is likely to give its future ambitions in AI space, an area where it lagged recently with other big names like Microsoft, META, Nvidia and Google. Although it has underperformed the broader market this year, but many analysts see a 15% growth after announcements of new and upgraded products and services in the conference.

Medium and Short Term Picks:

For these stocks we suggest that profits should be taken at 15-20% levels from the buying price or at least 25-50% of the position should be taken off the table to ensure profitable trades. For the rest of the holding, a further assessment will be required at that time to assess future potential.

NVO:

Our favorite Pharma sector pick was highlighted first in November. Since then, during last 6 months it increased from a low of 94.05 to current level of 135 which is a 40% increase approximately. Since last 3-4 months, stock has been in a consolidation and now set up a cup with handle base. It is likely to continue its trend in near future amid Top and bottom lines growth (Sales and Earning). Suggested Stop Loss: 135.28.

TW:

Founded nearly three decades ago, Tradeweb Markets is an operator of electronic marketplaces for the trading of products across the rates, credits, money markets and equities classes. It is currently coming out of a flat base and actionable at current price levels as company seems poised to grow its market share of US treasury. As per guys in Motley Fool, this a no-brainer growth stock. Suggested Stop Loss : 100.

SPG

Interested in a dividend income player? Simon Property Group (SPG) is a REIT with a dividend yield of 5.29% and has formed a base during recent consolidation. It is likely to breakout from current level of 151. Suggested stop loss: 139.25.

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Happy Trading and best regards,

Disclaimer:

The information provided here is for educational / learning purposes only and should not be taken as purchase or sell recommendations. Trading / Investing in Stocks and derivatives is highly risky and could result in a substantial or complete loss of invested capital.

Employees and Owners of MJ Software LLC are not registered Financial Advisors with FINRA or SEC and for any financial advice please consult a registered financial advisor.