Popular Traded US Stocks on POEMS in October 2021 November 22, 2021
The following lists some of the more popular stocks – not in any order of ranking – traded by POEMS customers in the month of October.
At a glance:
- Three indices hit record highs despite previous month’s low.
- Disappointing labour market report caused a brief dip.
- Volatility Index (VIX) closed below 2021 average.
- Companies are still affected by supply chain issues.
The three US major indices – Dow Jones, S&P 500 and Nasdaq Composite bounced back from September’s sell-off and reached an all-time high.
| NASDAQ | DOW JONES | S&P 500 | |
| Month Open | 14,723.60 | 34,030.17 | 4,31716 | Month Close | 15,878.00 | 35,819.57 | 4605.39 | Monthly return | 7.82% | 5.26% | 6.67% |
October was not a rosy month. There was a brief sell-off following the release of a weak US labour market report in September, which resulted in an all-time low in the number of jobs created since January 2021. After the slide, October was propelled by the earnings season where companies in general reported strong earnings.
The Chicago Board Options Exchange’s CBOE Volatility Index – or VIX closed at 15.98 points which is well below the 2021 average of 19.71. This strongly suggests a low level of fear amongst market participants, reflecting a positive outlook.
Microsoft Corporation (NASDAQ: MSFT).
MSFT recently de-throned Apple (AAPL), taking over its title as the world’s most valuable company with a market capitalisation of US$2.49 trillion . MSFT’s share gained 17.73%, from US$282.12 to US$331.62 this month . The latest reported EPS of US$2.27 and revenue of US$45.32 billion beats estimates of US$2.07 and US$43.97 billion respectively. Some of MSFT’s segments had a great year on year growth, namely, the Intelligent Cloud segment that was up 31% and Azure; MSFT’s cloud service, was up 50%. With regards to the next quarter’s revenue, MSFT is calling for a revenue of minimally US$50.15 billion, which is higher than the consensus estimate of US48.92 billion.
Technical analysis.
Status: Bullish momentum
Support: US$305.86
Resistance: US$332.20
Immediate resistance must be broken for more upside
Visa Inc (NYSE: V)
Visa’s revenue of US$6.6 billion beat earnings expectations of US$6.5 billion for the latest quarter . The gain is indicative of a spending rebound globally as travel restrictions relax. Despite the great earnings release, Visa dipped for the month as the outlook was not encouraging . The management expects revenue growth for the next quarter to be as high as 19%; half of what analysts are predicting. For October 2021, Visa opened at US$224.17 and closed at US$211.77, which is a 5.53% drop.
Technical analysis.
Status: Neutral
Support: US$206.18
Resistance: US$219.00
Range-bound
Snap Inc (NYSE: SNAP)
The release of SNAP’s earnings for this quarter was not up to investors’ expectations. Its reported revenue of US$1.07 billion is lower than the forecasted amount of US$1.10 billion . SNAP’s missing revenue estimates show that Apple’s change in privacy indeed impacted SNAP more than expected. The revenue was also affected by supply chain interruptions and labour shortages that resulted in advertisers cutting back on advertising. Currently, there are 306 million global users and SNAP expects daily active users to be around 316 to 318 million for the next quarter. SNAP fell 30.95%, from an open of US$74.82 to the closing of the month at US$52.58.
Technical analysis.
Status: Neutral
Support: US$49.93
Resistance: US$62.30
Range-bound
Coca-Cola Co (NYSE:KO)
KO beat earnings forecasted during this season . The reported EPS of US$0.65 and revenue of US$10.04 billion beat estimates of US$0.58 and US$9.75 billion respectively. They performed better than expected, likely owing to the increase in spending on advertising and reopening of economies, enabling an increased amount of spending. KO is expecting an EPS growth of 15% to 17% for the full year of 2021. Its share price grew 6.8% this month, from US$52.78 to US$56.37.
Technical analysis:
Status: Bullish momentum
Support: US$54.42
Resistance: US$57.00
Immediate resistance must be broken for more upside
Advanced Micro Devices (NASDAQ: AMD)
AMD opened this month at US$102.60 and gained 17.18% to close at US$120.23. AMD reported stellar third quarter earnings . The reported earnings per share (EPS) of US$0.73 and revenue of US$4.31 billion beat estimates of US$0.67 and US$4.12 billion respectively. With the ability to control its cost, AMD benefited from the increase in demand for electronics and higher chip prices. For the next quarter, AMD is expecting US$4.5 billion in sales which is higher than analyst expectations of US$4.25 billion.
Technical analysis:
Status: Bullish momentum
Support: US$118.34
Resistance: US$135.00
Bullish momentum into psychological level of US$135.00
Ford Motor Company (NYSE: F)
Ford smashed expectations with its latest earnings release . The reported EPS of US$0.51 and revenue of US$33.21 billion beat estimates of US$0.27 and US$32.54 billion respectively. The results are better than expected, likely owing the higher availability of chips as compared to the previous quarter. Ford shared that higher commodity costs could hamper its result for the next quarter, but at the same time, they believe that there is a strong demand for their newer products. Ford’s share opened at US$14.26 and closed at US$17.08 this month, achieving a gain of 19.77%.
Technical analysis:
Status: Bullish momentum
Support: US$17.58
Resistance: US$19.00
Bullish momentum into psychological level of US$20.00
Intel Corporation (NASDAQ: INTC)
INTC opened the month at US$53.65 and closed at US$49.00. The 8.66% fall was caused by the forward guidance of a falling gross margins in the coming years due to the decision to increase investment in research and development . This investment is needed as Intel has been losing market share to its competitors due to underinvesting in the past. Thus, Intel is trying to increase its competitiveness by sacrificing its short-term profitability. However, investments such as foundry plans may take a few years to become fruitful.
Earnings for 3Q21 will be released on 11 November 2021 and the EPS forecast is at -0.0613.
Technical analysis:
Status: Neutral
Support: US$47.90
Resistance: US$52.29
Range-bound
Tesla Inc (NASDAQ:TSLA)
TSLA gained 43.11% and broke the US$1,000 barrier to reach a record high of US$1094.94. The bullish momentum was a result of the announcement that Hertz made for the inclusion of Tesla vehicles into its rental car fleet and the improved earnings reported for the third quarter. TSLA’s revenue rose by 57% year over year and its (earnings per share) EPS of US$1.86 beat estimates of US$1.59 . However, it was noted by CEO Elon Musk that no contract of the deal with Hertz has been inked of late . Its ability to thrive under such challenging environments has strengthened investors’ confidence. Moving forward, TSLA emphasised that their production in Q42021 will depend heavily on the availability of parts.
Technical analysis:
Status: Bullish momentum
Support: US$1046.05
Resistance: US$1200.00
Immediate resistance must be broken for more upside
Twitter Inc (NYSE:TWTR)
TWTR closed in the red this month at US$53.15, a 12.60% drop from their opening of US$60.81. TWTR reported an EPS of US$0.18, which is higher than the expected of US$0.15.The reported revenue amount of US$1.284 billion is lower than the estimated US$1.285 billion . TWTR’s main cause of the lower revenue was highly likely due to the relatively poor outlook. Investors are worried that poor user rate in the US might persist into the future and the impact of Apple’s privacy change might be worse than expected.
Technical analysis:
Status: Neutral
Support: US$52.47
Resistance: US$59.38
Range-bound
Digital World Acquisition Corp (NASDAQ: DWAC)
DWAC is a special-purpose acquisition company (SPAC). It serves to acquire private companies and push for newly acquired ones to be publicly listed. This share was newly listed on 30 September at USD$16.00 and hit a high of US$175.00 before closing at US67.75. This huge swing was caused by the news of DWAC’s merge with Donald Trump’s social network company . Trump’s social network company competes with the other social media giants. The situation is akin to the meme stock era where speculators hop onto the craze to look for quick profit, pumping up the price and dumping them after a certain level. Thus, investing in this stock carries a significantly high risk.
Technical analysis:
Status: Neutral
Support: US41.64
Resistance: US$69.65
Range-bound
Bloomberg analysts’ recommendations
The table below shows the consensus ratings and average ratings of all analysts updated on Bloomberg in the last 12 months. Consensus ratings have been computed by standardising analysts’ ratings from a scale of 1 (Strong Sell) to 5 (Strong Buy). The table also shows a number of analysts’ recommendations to buy, hold or sell the stocks, as well as their average target prices.
| Security | Consensus Rating | BUY | HOLD | SELL | 12 Mth Target Price (US$) |
| Microsoft Corporation (NASDAQ: MSFT) | 4.78 | 40 (88.90%) | 5 (11.11%) | 0 | 360.75 |
| Visa Inc (NYSE: V) | 4.72 | 35 (87.5%) | 5 (12.5%) | 0 | 275.56 |
| Snap Inc (NYSE:SNAP) | 4.63 | 34 (82.9%) | 7 (17.1%) | 0 | 75.67 |
| Coca-Cola Co (NYSE: KO) | 4.36 | 19 (67.9%) | 9 (32.1%) | 0 | 62.35 |
| Advanced Micro Devices (NASDAQ: AMD) | 4.00 | 26 (57.8%) | 16 (35.6%) | 3 (6.7%) | 131.49 |
| Ford Motor Company(NYSE: F) | 3.91 | 13 (56.5%) | 7 (30.4%) | 3 (13.0%) | 17.66 |
| Intel Corporation (NASDAQ: INTC) | 3.39 | 17 (37.0%) | 21 (45.7%) | 8 (17.4%) | 56.24 |
| Tesla INC (NASDAQ: TSLA) | 3.39 | 21 (47.7%) | 11 (25.0%) | 12 (27.3%) | – |
| Twitter Inc (NYSE: TWTR) | 3.23 | 10 (25.6%) | 24 (61.5%) | 5 (12.8%) | 68.94 |
| Digital World Acquisition Corp (NASDAQ: DWAC) | – | – | – | – | – |
To round up
Apart from the lacklustre labour report, October has been a rather spectacular month. The three indices were able to make up for the loss in September thanks to the support of strong earnings. A common issue that most companies pointed to as a challenge is the disruption supply chains. Disruptions in supply chain have caused difficulties on many fronts, resulting in the slower production lines in many companies.
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Reference:
- [1] “”Yields rise, stocks waver after U.S. jobs data | Reuters.” 8 Oct. 2021, https://www.reuters.com/business/global-markets-wrapup-3-pix-2021-10-08/ Accessed 3 Nov. 2021.
- [2] “Move over Apple, Microsoft now the world’s most valuable company.” 30 Oct. 2021, https://www.reuters.com/technology/apple-set-hand-crown-worlds-most-valuable-company-microsoft-2021-10-29/Accessed 30 Oct. 2021.
- [3] “Microsoft beats revenue expectations, reporting 22% growth – CNBC.” 27 Oct. 2021, https://www.cnbc.com/2021/10/26/microsoft-msft-earnings-q1-2022.html Accessed 30 Oct. 2021.
- [4] “Visa tops earnings expectations, but stock dips after outlook.” 27 Oct. 2021, https://www.marketwatch.com/story/visa-tops-earnings-expectations-boosts-dividend-11635280796 Accessed 30 Oct. 2021.
- [5] “Why Visa Stock Just Dropped 4.5% | The Motley Fool.” , https://www.fool.com/investing/2021/10/27/why-visa-stock-just-dropped-45/ Accessed 30 Oct. 2021.
- [6] “Snap plummets 22% after missing on revenue expectations – CNBC.” 21 Oct. 2021,” 30 Sept. 2021, https://www.cnbc.com/2021/10/21/snap-earnings-q3-2021.html Accessed 30 Oct. 2021.
- [7] “Coca-Cola (KO) Q3 2021 earnings beat – CNBC.” 27 Oct. 2021, https://www.cnbc.com/2021/10/27/coca-cola-ko-q3-2021-earnings.html Accessed 30 Oct. 2021.
- [8] “AMD earnings Q3 2021 – CNBC.” 27 Oct. 2021, https://www.cnbc.com/2021/10/26/amd-earnings-q3-2021.html Accessed 30 Oct. 2021.
- [9] “Ford (F) earnings Q3 2021 – CNBC.” 28 Oct. 2021, https://www.cnbc.com/2021/10/27/ford-f-earnings-q3-2021.html Accessed 30 Oct. 2021.
- [10] “Intel Might Be Down, But It’s Certainly Not Out | The Motley Fool.” 22 Oct. 2021, https://www.fool.com/investing/2021/10/22/intel-might-be-down-but-its-certainly-not-out/ Accessed 30 Oct. 2021.
- [11] “Why Tesla Stock Jumped on Thursday | The Motley Fool.” 22 Oct. 2021, , https://www.fool.com/investing/2021/10/21/why-tesla-stock-jumped-on-thursday/ Accessed 28 Oct. 2021.
- [12] “Tesla Shares Slide as Musk Tweets on Lack of Hertz Contract” 2 November 2021, https://www.bloomberg.com/news/articles/2021-11-02/musk-emphasizes-hertz-deal-not-signed-in-tweet-on-tesla-chart Accessed 3 Nov. 2021
- [13] “Why Twitter Stock Crashed 8.5% Today | The Motley Fool.” 28 Oct. 2021, https://www.fool.com/investing/2021/10/27/why-twitter-stock-crashed-85-today/ Accessed 29 Oct. 2021.
- [14] “Twitter Drops the Most Since April on Sales Outlook – Bloomberg.com.” 27 Oct. 2021, Twitter Drops the Most Since April on Sales Outlook – Bloomberg.com.” 27 Oct. 2021, Accessed 31 Oct. 2021.
- [15] “Trump’s Social Media SPAC (DWAC) Is Skyrocketing, Here’s How ….” 22 Oct. 2021, https://www.bloomberg.com/news/articles/2021-10-22/trump-s-social-media-spac-dwac-is-skyrocketing-here-s-how-the-market-feels Accessed 31 Oct. 2021.
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About the author
Lee Ying Jie
Dealer
Ying Jie is a US Equity Dealer in the Global Markets Team and specializing in US and Canadian markets. He is proficient in trading using Technical Analysis, placing emphasis on supply and demand, and price action.
Chan Zi Quan
Dealer
Zi Quan is a US Equity Dealer in the Global Markets Team and specializes in the US and Canadian markets. He is an avid crypto fan and is adept in macro analysis..
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