Weekly Commentary - November 24, 2023

Hello readers,

Welcome back !!!

Weekly update:

The market is continuing to march forward fueled by the recent rally. Falling Treasury yields, strong earnings by many "Big Cap" companies and expectations of a good holiday seasons for economy are the key catalysts. Inflation seems to be easing in general and broader market breadth seem to be improving as shown by Nasdaq Equal Weight Fund (QQEW) and the Russell 2000 index. In other words, leadership is not just limited to the magnificent seven stocks which have dominated S&P 500 this year so far. This is also shown by the fact that advancers outperformed decliners by 3-to-1 on New York Stock Exchange and over 2-to-1 on the Nasdaq. No guarantees, but we are reasons to believe that this rally has legs and still has room to go.

During the shortened trading week due to Thanksgiving, The Nasdaq Composite rose by 0.9% while S&P 500 lifted 1% for the week. Major indexes are set to challenge their recent summer highs and close the year at highest levels during the year. Nasdaq Composite is up by 37% for the year while S&P 500 is up 19% for the year. The Russell 2000 popped up 0.7% for the week but it is still under its 200 day Moving average. A sign that small stocks need to do a lot more work to catch up with the other major indexes.

Recent Performance:

Performance of some of the stocks mentioned in last two weeks is as follows:

Stock 5 Days Perf 1 Month Perf

MSFT 2.05% 14.19%

NVO 4% 8.13%

NVDA -3.09% 9.42%

TW 2.08% 14.24%

TNK 2.16% 14.26%

META 0.95% 8.22%

INSW 1.27% 1.09%

GE 3.89% 5.59%

ROST 1.76% 0.37%

COST 2.46% 7.16%

CVX 0.3% -7.5%

Prominent Stocks:

MSFT: Barron's Steven Seas notes that Microsoft is undervalued even at these new high price levels because its current price does not reflect the impact of AI (Artificial Intelligence) on its future growth. We continue to prefer this bellwether stock for continuous dominance in software industry.

NOV: Novo Nordisk broke out on Friday continuous its recent rise and confirming our bias towards being a long-term leader. As stated earlier it has promising pipeline of medicines like "Ozempic" and "Wegovy" in its arsenal.

NVDA: Nividia seems to be under some pressure amid bad news on China front and US export curbs on semiconductors. However, it is very close to its 20 days MA and could test its 50 days MA which is further below around $450. These levels could provide a solid support and stock could make reversal.

Actionable Stocks:

With holidays season around the corner, several stocks are showing on our screens or setting up buy ranges as per the 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 of the stocks worthwhile to mention are:

MSFT: As stated above.

NVO: Novo Nordisk. As discussed above, remains our favorite due to strong a product line.

NVDA: Nvidia is still actionable (please see the discussion above for more details).

DRS: Leonardo DRS Inc is a defense stock supplier which broke out from a long base last month. If the stock moves back above 19.5 (currently 18.81) then it could make another jump to its recent highs at 20.95.

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