Markets
markets
Luke Kawa

Technical indicator delivers first “buy” signal on the S&P 500 in years

When richly valued, high-flying stocks reverse course and play the biggest role in creating stock market distress, it can often be very difficult to pick out a time when the selling might be exhausted. Is a 40x forward price-to-earnings multiple for these types of stocks the bottom? 30x? 25x? Honestly, who knows.

So at times like these, it can be useful to look for technical solutions to technical problems. And one may have just arrived!

The S&P 500’s Relative Strength Index (RSI), a gauge of the magnitude and persistence of price movements, closed in “oversold” territory on Monday and Tuesday (that is, below 30). An RSI “buy” signal is generated when the index crosses back above 30, and, well, that’s what we got:

The S&P 500’s last 14-day RSI buy signal, on a close-to-close basis, was generated on October 30, 2023. Past is certainly not prologue, but the benchmark US stock index ripped 16% higher in the three months that followed.

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Luke Kawa, Nia Warfield
24m
S&P 500’s losing streak extends to three

The longest run in the red for the benchmark US stock index in over a month.

Bears awaken from hibernation at the zoo in Thale
markets
Luke Kawa

Retail traders are dumping Bloom Energy after near 300% rally, says JPMorgan

Retail traders are swarming for the exits in fuel cell company Bloom Energy, causing what was once a near 300% year-to-date rally to sour.

JPMorgan strategists led by Arun Jain flagged that Bloom’s net imbalance — the balance of buying versus selling among retail traders — was exceptionally negative as of 11 a.m. ET, even worse than during its double-digit drop on Wednesday.

JPM retail BE

The fuel cell company, which counts Oracle among its customers, eclipsed a market cap in excess of $20 billion earlier this week despite generating less than $2 billion in sales over the past year.

Wall Street began to sound some alarm bells about the extent of Bloom’s run this week, with Jefferies downgrading its rating for the stock to “underperform” from “hold” on Wednesday while Bank of America analysts wrote, “We are still not buying into BE’s AI hype.”

Italian Hemp Growers Struggle With Anti-drug Laws

Investors are growing bullish on weed stocks. But why?

We spoke to ATB Capital Markets analyst Frederico Gomes about why institutional investors are growing bullish on cannabis.

J. Edward Moreno4h
markets
Matt Phillips

Duolingo rises as executives talk up China opportunity

Duolingo posted a solid gain Thursday, the latest in a series of relatively light-on-news moves in the stock this month as it has regained some attention among options-trading retail investors.

There was a story in China’s official China Daily where executives laid out their plans for the language-learning app’s push into the People’s Republic, which has been a focus of Wall Street analysts on recent post-earnings conference calls.

China, where the company began doing business in 2018, is Duolingo’s fastest-growing market for its language-learning app. It’s also the largest source of test takers for its Duolingo English Test proficiency exam business, a recent focus for management spotlighted in its recent Duocon product announcements.

It’s hard to say if the China Daily story is the reason for today’s upswing in the stock, but given the necessities of working within a country controlled by the Chinese Communist Party, a relatively favorable story appearing in its international propaganda organ suggests a relatively healthy working relationship is developing there.

Duolingo to expand local team, products

Duolingo to expand local team, products

China, where the company began doing business in 2018, is Duolingo’s fastest-growing market for its language-learning app. It’s also the largest source of test takers for its Duolingo English Test proficiency exam business, a recent focus for management spotlighted in its recent Duocon product announcements.

It’s hard to say if the China Daily story is the reason for today’s upswing in the stock, but given the necessities of working within a country controlled by the Chinese Communist Party, a relatively favorable story appearing in its international propaganda organ suggests a relatively healthy working relationship is developing there.

markets
Matt Phillips

Oklo dives after insider sale

Oklo dove Thursday after an SEC filing showed company director Michael Klein sold some $6.7 million in stock in transactions that, importantly, were not part of a pre-set insider sales plan.

Wall Street analysts forecast that the nuclear power startup will make losses for years to come. But the company’s ties to OpenAI CEO Sam Altman, who served as Oklo’s chairman until April, have helped make the stock a favorite of retail traders and a popular momentum play.

Even after today’s stumble, it’s up more than 400% this year and nearly 1,300% over the past 12 months.

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