The Fed maintains that the jump in consumer prices is temporary due to the pent-up demand caused by the pandemic, notes Dan Sullivan, editor of The Chartist.
This increase in inflation should not be all that surprising given the fact that almost $6 trillion in government relief has been pumped into the economy over the past 16 months.
Fed Chairman, Jerome Powell, recently admitted that inflation has been stronger than he anticipated but continues to maintain that it is mostly transitory. While most analysts are in agreement, the jury is still out.
Overall sentiment remains sky high bullish, which is not favorable from a contrary opinion standpoint at least for the near term.
Our advice is to stay the course by continuing to maintain all current positions. We are in a bull market that in our opinion could well run into 2022. However, with the odds favoring a correction, we would do no further buying for the time being.
Meanwhile, in our relative strength spotlight, we highlight two stocks:
Moderna, Inc. (MRNA) is a new addition to the relative strength ratings this week at the # position. Back in November it broke out of an extended base and made a series of new highs.
Since its intraday low on May 6, at 143.56 it has surged 80% to its all-time high at 259. It trades above its up trending 50 and 200-day lines.
The shares appear to be overextended at this point and would expect a pullback from these levels, but the overall trend remains favorable. Virtually unknown outside the biotech realm before the pandemic, Moderna has become a household name due to the success of its COVID-19 drug.
Its mRNA vaccine has been shown to be 94% effective against the disease and is being administered in 30 countries around the world. Analysts estimate that it’s on pace to deliver 1 billion doses in 2021 with estimated revenue of $19 billion.
Moderna’s vaccine platform inserts synthetic nucleoside-modified messenger RNA (modRNA) into human cells using a coating of lipid nanoparticles.
With no approved drugs prior to the COVID vaccine, it now has a pipeline of 24 products including vaccine candidates for seasonal flu, HIV, the Nipah virus, and a second COVID-19 vaccine that will be easier to store and administer than existing vaccines.
It has created six modalities prophylactic vaccines, cancer vaccines, immmuno-oncology, localized regenerative therapeutics, systemic secreted therapeutics and systemic intracellular therapeutics.
Oracle Corporation (ORCL) has been in a strong uptrend since the beginning of the year and shows all the characteristics of a high relative strength stock. Currently, it trades near its 52-week high and well above its 50 and 200- day lines. It enters the relative strength ratings at the # spot.
The company provides products and services that address enterprise information technology (IT) environments. The Company’s businesses include cloud and license, hardware and services. Its products and services include applications and infrastructure offerings that are delivered through a variety of IT de
