$UBS: Riped for picking again, this week?
Swiss Bank Revisited.
In my 15 Feb 2024 post, I have touched on Swiss bank $UBS Group AG(UBS)$ and how I managed to “dip buy” when US market was very nervous about the first Consumer Price Index (CPI) report of 2024.
What exacerbated the situation was January 2024 inflation data came in stronger than Wall Street estimates.
With that came the opportunity to dip-buy into UBS banks as recounted in my February post. (Click here ! to read).
Since purchase, the stock managed to make steady gains. (see above)
My strategy has always been to separate my purchase/s into separate parcels.
And I have my “ideal” entry price.
Coupled with the moto - “if I could not get it, then it is not meant to be this time”.
Week of Mar 25 - 28 :
It is a short trading week of Monday to Thursday.
Friday is public holiday “Good Friday” in both US and Singapore.
More importantly, US’s February 2024 - personal consumption expenditure (PCE) will be released.
If my prediction is “correct”, US market will pull back on the back of last week’s strong gains, where the indexes reached new all-time closing highs.
Month to date (MTD), major US stock benchmarks are on track for the 5th straight winning month.
The broad market index is up more than +2% in March.
Nasdaq Composite is toting a +1.8% advance for the period, while the Dow is up +0.8%.
Based on technical analysis (TA), US market rally has crossed into “Overbought” territory.
Missed opportunity?
A reader has once enquired, for my strategy - am I worried about missed opportunity?
Having been around the blocks a few times, my experience tells me that opportunities will always surface or re-surface.
This is because US market is pulled in all directions by many factors and not just the stocks themselves.
April’s Entry Opportunity?
Strategas, a leading research firm says:
US is about to enter a temporary liquidity and fiscal squeeze.
This could impact the (1) US dollar, (2) bond yields, and (3) liquidity-sensitive stocks.
Liquidity has served as a useful cushion to the US economy, so far.
Especially with Ms Janet Yellen’s stealth QE overpowering the Fed’s QT by $433 Billion since October 2023.
About half of the liquidity gain occuring in the past 5 months.
Expect current tailwind to become a Headwind through April 2024.
As said, there will always be opportunity - just need to keep our eyes wide opened.
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