OPEX week in May is historically less bullish compared to other months since 1985, with market consolidation expected before a rally at the end of the month. June is predicted to be bearish, completing the second quarter correction. This pattern suggests a potential market shift in the coming weeks.
Applied Materials is set to report after the bell on Thursday, with the stock showing strong relative strength and seasonality. The stock is near a new high in relative strength, with the monthly oscillator turning up, indicating a rising accurate monthly cycle. Previous buy and sell signals have been profitable, with a projection of a share price closer to $220 in the near term.
Walmart is also reporting this week, and the forecast is for the report to be met with buying. Relative strength has been increasing since December, and seasonality is favorable from May 17th to July 20th, with shares rising 77% of the time over the past 44 years. The monthly cycle is expected to rise through 2024, with profitable signals this year and a potential share price increase to $70 or higher.
Overall, the market is expected to face a period of consolidation in OPEX week in May, followed by a rally toward the end of the month. The upcoming reports from companies like Applied Materials and Walmart are anticipated to be positive, with both stocks showing strong relative strength, seasonality, and profitable signals in their monthly cycles. Investors should be prepared for potential market shifts in the coming weeks as June is predicted to be bearish, marking the completion of the second quarter correction.
