Oppenheimer's March U.S. Stock Strategy: Time for Momentum, Recommends Apple, Alcoa, Baker Hughes

Stock News
03/03

As the March trading period begins, analysts at Oppenheimer highlight that several sectors are showing trading opportunities driven by bullish momentum. Historical data indicates that when the S&P 500 index holds above its 200-day moving average, stock market performance tends to be positive. Analysts noted in their report, "Historical performance shows that market returns in March generally outperform those in February." They added that since 1950, under such technical conditions, the benchmark index has averaged a gain of 1.2%, with a 66% probability of advancing. Oppenheimer's technical analysis reveals that the S&P 500 remains above the 6,520 support level, maintaining an upward trend. The consolidation over the past four months has effectively alleviated previous overbought pressure. With the bull market cycle entering its fourth year, analysts advise investors to shift their focus from mega-cap stocks to broader market opportunities, expressing a preference to "embrace the strength reflected in market breadth rather than fixating on market cap size." Oppenheimer points out that although the "Magnificent Seven" have weighed on the S&P 500 since last October, the momentum factor has demonstrated resilience during value style rotations. Analysts emphasize that avoiding weak areas is as crucial as capturing strong performers and note that their underweight stance on the software sector has provided solid support for their momentum strategy. Within the technology sector, Oppenheimer observes a clear divergence between software stocks and equal-weight technology stocks. Analysts stated, "Since our downgrade in mid-January, the software sector has continued to drag on technology performance." Data shows that excluding the software sector's -10% momentum score, the overall technology sector score improved significantly from -4% to +6%. The firm's buy-rated stocks in the technology sector include: Apple, TE Connectivity, Jabil, and MongoDB. In Oppenheimer's quantitative momentum model, the biotechnology and metals & mining sectors rank at the top of industry rankings. Analysts believe that for biotechnology, "the lost decade may have reached a turning point." Data indicates that the equal-weight biotechnology ETF has reclaimed its four-year moving average for the first time since June 2021; meanwhile, the metals & mining sector has completed a decade-long base-building and breakout pattern. The firm's recommended buy-rated stocks in these two sectors include: Amgen, Gilead Sciences, Moderna, and United Therapeutics in biotechnology; and Alcoa, Freeport-McMoRan, MP Materials, and Century Aluminum in mining. Additionally, the energy sector's recent performance has drawn attention. Oppenheimer notes, "In our latest model, the energy sector's momentum score jumped from 0% to +4%," marking one of the largest monthly increases. Analysts believe the sector's SPDR ETF has simultaneously broken through a technical resistance level that persisted for twelve years since 2014, indicating the formation of a long-term base. Their favored energy stocks include: Baker Hughes, TechnipFMC, Targa Resources, and Valero Energy.

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