Stocks Reverse Lower From Resistance: Union Pacific, Anthem Near Buy Points; Datadog In Doghouse | Summary and Q&A

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March 3, 2022
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Investor's Business Daily
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Stocks Reverse Lower From Resistance: Union Pacific, Anthem Near Buy Points; Datadog In Doghouse

TL;DR

The stock market faced resistance as the Nasdaq and S&P 500 hit the 21-day line, with growth stocks like Datadog taking a significant hit.

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Key Insights

  • πŸ«₯ The stock market faced resistance at the 21-day line, indicating a lack of upward momentum.
  • πŸ₯³ Growth stocks, particularly those with high P/E ratios like Datadog, struggled in this challenging market environment.
  • βœ‹ Union Pacific performed well due to factors such as a shallow base, high relative strength, and positive industry trends.
  • πŸ§‘β€βš•οΈ Health insurers like Anthem showed relative strength and insulation from supply concerns.
  • πŸ™ƒ The overall market is struggling, making it difficult to find upside opportunities in aggressive growth stocks.
  • πŸ•β€πŸ¦Ί Shipping stocks and transportation rail companies may benefit from global issues and increased demand for their services.
  • ♻️ The stock market's performance is uncertain, and investors should be cautious with their bets in this environment.

Transcript

good afternoon everyone and welcome to stock market today allie corman ed carson here with a breakdown of the action in today's session and looky there what do you know ed uh we hit some resistance in this rally yeah we hit it right where you might expect it to and we we sold off pretty much right from the opening bell uh there were a few stocks th... Read More

Questions & Answers

Q: Why did the stock market face resistance at the 21-day line?

The 21-day line is a significant technical level that often acts as a resistance point. The inability of the market to stay above this level suggests a lack of bullish momentum.

Q: Why did growth stocks like Datadog struggle?

Datadog and other high-priced earnings (P/E) ratio growth stocks faced selling pressure, possibly due to disappointing earnings from other companies like Snowflake. In a challenging market environment, investors tend to be cautious with high P/E stocks.

Q: What factors contributed to Union Pacific's positive performance?

Union Pacific saw a more than 1% increase and strong volume behind its move, making it the stock of the day. Factors that contributed to its positive performance include a shallow base, high relative strength, and strong performance within its group.

Q: How are health insurers like Anthem (ANTM) performing?

Anthem is following up on a strong day and attempting to break above the 470 level. Health insurers are relatively insulated from supply concerns and have shown relative strength, which is a positive sign within their industry.

Summary & Key Takeaways

  • The Nasdaq Composite finished the day down 1.6% and hit resistance at the 21-day line, mirroring the performance of other major indexes.

  • The S&P 500 also faced resistance at the 21-day line, although it did not have an outside day like the Nasdaq.

  • Highly valued growth stocks, including Datadog and Snowflake, struggled, with Datadog experiencing a notable sell-off.

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