Weekly Commentary - December 3, 2023

Hello readers,

Weekly and November monthly wrap up:

The Stock Market rally is continuing to surprise bears. In fact not long ago, one of the leading bank analyst predicted that this is a bear market rally on the hand, November has been the market's best month in more than a year. Dow Jones has already hit its 52-week high, while S&P 500 has hit its 2023 high and Nasdaq is not very far away from its 2023 high levels. The broad rally closed out a fifth straight week of gains on Friday. Growing expectations on Wall Street are that because of the slower inflation, Federal Reserve may cut interest rates as soon as early next year . This moved investors into in a buying mood. Here is the performance of major indices during November:

Dow Jones: +8.8%

S&P 500: +8.9%

Nasdaq Com: +10.7%

Russell 2000: +8.8%

It is likely that current momentum will continue and investors are banking on now on Santa to close the year on even a higher note. As mentioned in last week commentary, the bullish period is likely to continue traditionally at least till January 18th after which normally stock market takes a pause before resuming its journey.

Recent Performance:

Following stocks were mentioned during the previous month. Except for a few laggards in Energy sector, most of the stocks are performing well including our AI favorite Microsoft:

Stock 5 Days Perf 1 Month Perf

MSFT -0.77% 8.44%

NVO -4.79% 2.78%

NVDA -2.12% 10.49%

TW -0.5% 4.86%

TNK -2.31% -0.74%

META -3.96% 4.16%

DRS 0.80% -2.77%

GE 2.11% 14.22%

ROST 0.80% 13.93%

COST 0.83% 7.28%

CVX -0.06% 1.63%

In general, it will not be a mistake to say that investors are currently on a "Risk On" mode since more and more money is flowing into the aggressive sectors of market, i.e., Technology, Consumer Discretionary, Industrials and Financials with the exception of Real Estate (which has taken off recently), the defensive sectors in general are lagging the aggressive sectors which is another indication that the bullish rally has legs. Technology it seems has also taken a little pause, which could be temporary considering the overall bullish sentiments.

MSFT: Besides a negative return last week, Microsoft performed very well during the last one month and is strongly favored by best fund managers as the No. 1 AI player (besides NVDA). We continue to maintain our bullish stance on MSFT.

NVDA: Nvidia continue to under-perform the technology sector in general as revaluation and a consolidation period is in play. Nvidia chips are also facing growing competition by other chip makers like Intel and AMD, It is better to wait for a better entry signal for NVDA at this point.

NVO:

Novo Nordisk seems to underperform the broader market last week amid a comparison study with its rival Eli Lilly (LLY) whose weight-loss medicines showed better results against NVO's Ozempic and Wegovy. Let's see how it plays out in the coming week to assess if we need to revisit our bullish stance on NVO.

Actionable Stocks:

With holidays season around the corner, several stocks are showing on our screens or setting up buy ranges as per our TR (Trend recognition) indicator. However, we also need to be very careful in our selection as short-term profit-taking could kick in any time (though another Santa rally is expected near Christmas times). Some stocks worthwhile to mention are:

AAPL: The big Apple is eyeing its all-time high and set to continue its rally. Stocks seems to be actionable at current levels and expected to test its all-time high 197.90 set earlier in July.

MSFT: As discussed above.

AXON: Axon enterprises develops advanced electronic control devices for the law enforcement, military and consumer markets. Stock is actionable at its current levels and is expected to forge ahead. Interested investors may like to take a position at this stage.

NET: Cloudflare is an enterprise computer software partner of Amazon and Microsoft and has broken out of a consolidation. It is showing strong relative strength compared to its peers and is expected to test its previous highs around 130.

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