Latest massive sell-off could lead to rally to new highs, Oppenheimer says

A key market indicator could predict a comeback, according to Oppenheimer’s Ari Wald.

After a “high intensity low” on December 3 – which Wald described as a point where most stocks fall and the Cboe volatility index peaks – the selling pressure appears to be easing, the official said of the technical analysis of the company at CNBC. Monday.

“On top of that, we’re encouraged that the put-call ratio – it’s an option-based sentiment indicator – shows the most pessimism in the ratio since November 2020,” said Wald.

“It argues that there is counter-current firepower and I think it sets new heights for the New Year,” Wald said.

However, the quality of the rally is important, Wald said, adding that he would be concerned if the S&P 500 highs were “undermined” by less than 60% of NYSE stocks trading above their 200-day moving averages. .

“We have historically found this to be a good upper signal from the market,” he said. “I haven’t seen it yet, however.”

Another trader saw an opportunity in the sudden market downturn.

“There are many… reasonably priced valuations because a lot of the market movement comes from high-end growth stocks,” said Michael Bapis of Rockefeller Capital Management in the same interview.

This “knee-jerk reaction” to the omicron risks of Covid and the uncertainty surrounding Federal Reserve policy has “normalized” the valuations of stocks in tech, banking, energy and healthcare, said Bapis, Managing Director of Vios Advisors.

“Assuming omicron continues its momentum and the Fed doesn’t do anything drastic with rates, we would definitely view this as a buying opportunity,” Bapis said. “Frankly, the markets moved up so quickly that a pullback was going to happen anyway.”

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