We have revamped the top 10 traded US stocks into popular US stocks traded on POEMS. From this month onwards, our list will include some of the more popular stocks – not in any order – traded by our POEMS clients in the month along with major news announced on those stocks.
At a glance:
- All three major indices notched up gains in April to reach new highs. After a beating for several months, the tech-heavy Nasdaq finally moved in tandem with its two counterparts.
- Major companies have announced their earnings for the quarter ended 31 March 2021. Most beat expectations by wide margins.
- Our popular US stocks traded in April were Facebook, Apple, Boeing, Intel Corp, Amazon, Alibaba, Coinbase Global, Taiwan Semiconductor Manufacturing, Nio and Tesla, not in any particular order.
Here are April’s top traded US stocks on Phillip’s Online Electronic Mart System (POEMS), based on gross market value traded.
The three US major indices – Dow Jones, S&P 500 and Nasdaq Composite – traded higher and again broke new records in April. The Dow opened at 33,054 and ended at 34,257 on 16 April, up 3% before closing at 33,875. Opening slightly below the psychological mark of 4,000, the S&P made a record 4,219 on 29 April, up 6%, before closing at 4,181. This was the first time it closed above 4,000 points.
After underperforming since February, Nasdaq opened at 13,414 and scaled up 6% to 14,212 on 29 April. Unable to sustain above 14,000 for long, it ended the month at 13,963. Given this, it may struggle to test this level in subsequent months.
Major companies have announced their earnings for the quarter ended 31 March 2021. Most beat analysts’ estimates by at least a 22% margin1. This was phenomenal, showcasing the rapid recovery of the economy, thanks to effective vaccination and the copious amount of fiscal support in the US.
As the economy ploughs ahead, companies are expected to do well in the second quarter. However, inflation may also tick up, which has already invited Janet Yellen’s comments that the Fed may have to step in to stop the economy from overheating.
As usual, we have included technical charts for all the stocks profiled. These are based on 1-hourly and 4-hourly time frames over 60 days. The charts are for your information only. Support and resistance levels discussed are solely based on our dealers’ views. They should not be construed as buy or sell recommendations and investors and traders are advised to do their own due diligence before making any trade.
Facebook Inc (NASDAQ: FB)Facebook released quarterly result on 28 April, which smashed analysts’ estimates on both earnings and revenue. EPS was US$3.30 vs forecast of US$2.37. Revenue came in at US$26.17bn vs US$23.67bn. Growth was 48% YoY2. Following the beat, Facebook traded more than 7% higher in after-hours trading. It attributed its stellar earnings to a pick-up in ad spending as the economy recovered.
Facebook, however, cautioned that its forward revenue could be stable or accelerate only modestly due to growing hot spots of the pandemic around the globe. This would limit advertisement spending, particularly in India. Another headwind is regulatory and platform challenges. Apple’s recent privacy change makes it hard for companies to personalise ads for Apple users. This will affect Facebook’s ad revenue as it relies on ad personalisation for effective marketing.
Facebook continued to trade at the US$300 level for the entire month.
Technical Analysis:
Status: Technical Sell once below US$313
Support: US$296-298
Resistance: US$313-315 could be potential resistance
Trades in a range.
Apple Inc (NASDAQ: AAPL)The world’s most valuable company reported another blowout quarter on 29 April. Sales were up 54% YoY. Growth was double-digit in every product category, even as the company shifted to more services. EPS came in at US$1.40 vs an estimated US$0.99. Revenue reported was US$89.58bn vs US$77.36bn, up 53.7% YoY3. The stock rose over 4% in extended trading post-announcement.
Apple also showcased the products it had lined up. One that was unveiled was the controversial Apple AirTag. This product may trigger another round of complaints to US lawmakers of potential “market power abuse” against smaller rivals such as Tile, which has similar products4. Apple, however, defended its product on the grounds that it is different. The AirTag will leverage its 1bn installed base of iPhones to build services that competitors are unable to do5. This effectively delivers on what CEO Tim Cook previously described as Apple’s “only Apple” strategy. Apple will offer products and services that run on its own network. This alone will create a huge edge over rivals like Samsung which do not own underlying operating systems.
Apple moved higher from its March low to trade sideways above US$130 for most of the month.
Technical Analysis:
Status: Technical Sell
Support: US$125-126
Resistance: US$131
Strong momentum. Recent support turned resistance at US$131
Boeing (NYSE: BA)Boeing announced results on 28 April, reporting its sixth consecutive quarterly loss as it continued to struggle with production issues. These included a grounding of some of its airplanes due to production faults and weak jetliner demand. Loss per share was US$1.53 vs an expected -US$1.16. Revenue came in slightly better at US$15.22bn vs US$15.02bn6. The stock slipped close to 3% after its earnings announcement. Its lacklustre earnings may signal a weak global recovery with pandemic hotspots breaking out in parts of the world.
Ongoing vaccination, however, may just provide a turning point. Most domestic flights have been picking up ever since the rollout of vaccines. We may begin to see renewed orders for Boeing from airlines.
Boeing started April on a high note, trading at around US$260, just 6% off its 52-week high of US$278 the month before. From there, however, it was downhill all the way, stoked by a resurgence of pandemic cases.
Technical Analysis:
Status: Technical Sell
Support: about US$215
Resistance: US$233
Strong momentum. Recent support turned resistance at US$233
Intel Corp (NASDAQ: INTC)The largest chip manufacturer by revenue, Intel’s earnings were slightly down YoY. EPS came in at US$1.39 vs an expected US$1.15. This was a 1% YoY decline. Reported revenue was US$18.57bn vs US$17.90bn, flat YoY7. Intel’s underlying business is slowly being chipped away by Advanced Micro Devices (AMD.US) and other competitors. Its customers are also cutting their reliance on Intel. Apple recently announced that it wants to be self-sufficient in chips for its products.
Intel’s response is to invest US$20bn in a foundry business. This foundry will produce chips for companies in addition to its own, pitching it directly against the largest outsourcing chip maker, Taiwan Semiconductor (TSM.US)8. This is a sea change in Intel’s business model as it navigates the competitive landscape. The plan may very well reap benefits from skyrocketing demand for microchips due to technological advances.
Intel traded down for most of the month. Its April high was US$68, before it closed at US$57.275. Following its earnings announcement on 22 April, it traded 3% lower in after-hours trading.
Technical Analysis:
Status: Neutral
Support: US$55 (recent low)
Resistance: US$58
Trades in a narrow range.
Amazon.com Inc (NASDAQ: AMZN)Amazon reported blockbuster earnings on 29 April on sales growth of 44%. EPS crushed estimates at US$15.79 vs US$9.54. Revenue was US$108.52bn vs expectations of US$104.47bn. The tech giant continued to profit from pandemic-fuelled online shopping. Guidance suggests continued momentum. The stock climbed more than 5% in extended trading hours after its announcement.
Of note is Amazon Web Services, which the company has been shifting its focus to. Amazon Web raked in net sales of US$13.5bn, up 32% YoY. It is set to propel Amazon forward as cloud computing grows by leaps and bounds. Amazon Web is a market leader in cloud computing.
Prime Day, which typically falls in July, will take place in June this year. By moving Prime Day into the second quarter, Amazon could be looking to soften YoY comparisons with Q2 2020, when business boomed on the back of stay-at-home shopping.
Amazon trended up for the entire month, surpassing its previous high before the tech sell-off which started in February. It touched a 52-week high of US$3,554 on 30 April, following results.
Technical Analysis:
Status: Technical Sell once below US$3,289
Support: US$3,161-3,173
Resistance: US$3,289-3,313
Trades in a range.
Alibaba (NYSE: BABA)April was an eventful month for the Chinese tech giant. Alibaba was slapped with a record US$2.8bn fine by Chinese regulators after an anti-monopoly probe found it guilty of abuse of market position for years9. The amount was the highest anti-trust fine ever dished out and constituted 4% of the company’s FY2019 revenue10. CEO Daniel Zhang, however, assured investors that there would be no major impact on the company. As the fine marked closure to the probe, the market was cheered and sent the stock up 8%, to a 2-month high of US$245.
Ant Group, however, will need to restructure as a financial holding company. This is expected to curb its profitability and valuations due to the stringent rules and regulations imposed on financial companies.
Days after the fine, Ant Group was reportedly exploring options for Jack Ma to divest his shares in the company, in order to move forward with its IPO11. The company, though, denied this12.
Technical Analysis:
Status: Neutral
Support: US$225
Resistance: US$230
Trades in a range.
Coinbase Global Inc (NASDAQ: COIN)The largest US cryptocurrency exchange shot up to US$381 on its debut on the Nasdaq on 14 April. Against its IPO price of US$250, the premium was 52%. Living up to its hype, the stock continued to trend up, to US$429. At more than US$100bn, its market capitalisation exceeded that of many S&P 500 companies. Famed investor Cathie Wood loaded up nearly US$250mn worth of Coinbase shares during the IPO13. But mirroring cryptocurrency’s wild swings, the stock closed at US$297 at month-end. This still valued the crypto exchange at US$85bn.
With the listing of Coinbase, many cryptocurrencies such as bitcoin also rallied. Bitcoin rose to a record US$64,000 the day before Coinbase’s IPO. The IPO is a landmark event for the cryptocurrency industry, representing the first convergence of traditional finance and alternative currencies14.
Technical Analysis:
Status: Neutral
Support: US$275 (recent low), US$250 (psychological level – IPO price)
Resistance: US$290
Trading in a narrow range.
Taiwan Semiconductor Manufacturing (NYSE: TSM)The world’s largest independent semiconductor foundry, TSM, has an edge as it was the first foundry to provide 5 and 7 nanometre chips. It is currently able to make chips from 2 micron to 5 nanometres. This gives it a strong competitive advantage as smaller chips are used in advanced IT gadgets. TSM beat expectations on 15 April. Profit came in at NT$139.7bn vs NT$134bn expected. Revenue was up 25.4% YoY to a record NT$366bn. This came from increased demand from EVs, 5G phones etc. amid a chip supply crunch.
With its competitor, Intel, announcing a US$20bn foundry, TSM also rolled out a US$100bn investment plan for the next three years. It will increase capacity at its foundry to meet increased chip demand globally15. The expansion should be well received as 5G, AI and other new technologies require more advanced chips.
Still, it was a volatile month for TSM, as the stock traded sideways between US$125 and US$110. Its month-high was US$124 while it closed at US$116, near the bottom of its price channel for the month.
Technical Analysis:
Status: Neutral
Support: US$111
Resistance: US$120
Trades in a range.
Nio Inc (NYSE: NIO)Nio reported its earnings on the last trading day of the month. Numbers outperformed, with a loss per ADR of RMB0.23 vs an estimate of -RMB0.84. Revenue was RMB7.98bn vs RMB7.16bn. The Chinese EV maker, though, expects Q2 deliveries to slow down due to the global chip shortage and halts in production. Forecast deliveries of 21-22k vehicles imply 5-10% QoQ growth. In the first and fourth quarters of last year, growth was 16% and 42% QoQ respectively16.
One bright spot for Nio was its confirmed Nio Norway launch, with its hub in Oslo, Norway17. The Chinese EV maker is gradually expanding outside China, underscoring its ambition to become a global player.
From its low of US$34 in the previous month, Nio trended higher in April initially, before the pressure of chip shortages caused it to test its March low on 15 April. The stock trended higher for the rest of the month, possibly due to investors’ optimism that delivery numbers would be good when released at month’s end.
Technical Analysis:
Status: Neutral
Support: US$34
Resistance: US$41
Trades in a range.
Tesla Motors Inc (NASDAQ: TSLA)Tesla reported its first-quarter results after the bell on 26 April. Numbers were buoyed by the company’s bitcoin bet. Sales of regulatory credits also came in better than expected. EPS was 93 US cents vs 79 cents expected. Revenue came in at US$10.39bn vs US$10.29bn. This was a surge of 74% from a year ago18. Nevertheless, it was not impressive enough to convince investors, who brought the stock down more than 3% during after-hours trading.
The company weathered the global chip shortage by pivoting to new microcontrollers. It also developed firmware for new chips made by new suppliers. With that, it managed to ship a record 184,800 Model 3 and Model Y cars.
Tesla also a gain of more than US$100mn from the sale of a chunk of its bitcoin investment19. It previously announced that it was allowing customers to use bitcoins to pay for Tesla vehicles.
Recovering slowly from its March low, Tesla traded sideways at above US$700 for the most part of April. This was a level not seen since its first dip below US$700 in the sell-off at the start of last month.
Technical Analysis:
Status: Neutral
Support: US$640
Resistance: US$720
Trades in a range.
Learn more about investing in US stocks here
See how this stacks up against last month here
References:
1. https://www.cnbc.com/2021/05/03/why-investors-should-ignore-the-old-wall-street-adage-sell-in-may.html
2. https://www.cnbc.com/2021/04/28/facebook-fb-earnings-q1-2021.html
3. https://www.cnbc.com/2021/04/28/apple-aapl-earnings-q2-2021.html
4. https://7news.com.au/technology/apple-announcement-april-2021-slim-imacs-airtags-launched-at-event-c-2645818
5. https://www.cnbc.com/2021/04/21/apple-airtag-relies-on-massive-iphone-installed-base.html
6. https://www.cnbc.com/2021/04/28/boeing-ba-q1-2021-earnings.html
7. https://www.cnbc.com/2021/04/22/intel-intc-earnings-q1-2021.html
8. https://www.channelnewsasia.com/news/business/intel-to-spend-us-20-billion-on-us-chip-plants-as-ceo-challenges-14476008
9. https://www.bbc.com/news/business-56713508#
10. https://www.reuters.com/business/retail-consumer/china-regulators-fine-alibaba-275-bln-anti-monopoly-violations-2021-04-10/
11. https://www.cnbc.com/2021/04/19/ant-group-reportedly-exploring-options-for-jack-ma-to-divest-his-stake.html
12. https://www.business-standard.com/article/international/ant-group-denies-report-it-s-exploring-ways-for-jack-ma-to-sell-stake-121041800093_1.html
13. https://www.cnbc.com/2021/04/14/cathie-woods-ark-invest-loads-up-on-nearly-250-million-of-coinbase-on-first-day-of-trading.html
14. https://www.bloomberg.com/news/articles/2021-04-13/bitcoin-rallies-to-all-time-high-as-traders-eye-coinbase-listing
15. https://www.cnbc.com/2021/04/15/tsmcs-q1-profit-rises-19percent-on-strong-chip-demand.html
16. https://www.cnbc.com/2021/04/30/chinese-electric-automaker-nio-says-chip-shortage-will-slow-car-deliveries.html
17. https://electricvehicleweb.in/nio-norway-export-report/
18. https://www.cnbc.com/2021/04/26/tesla-tsla-earnings-q1-2021-.html
19. https://www.cnbc.com/2021/04/26/teslas-bitcoin-speculation-helped-boost-profits-this-quarter.html
Disclaimer
We do not base our recommendations entirely on the above quantitative return bands. We consider qualitative factors like (but not limited to) a stock`s risk reward profile, market sentiment, recent rate of share price appreciation, presence or absence of stock price catalysts, and speculative undertones surrounding the stock, before making our final recommendation
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