17 Mar This private equity giant is primed for a rebound, according to the charts
Private market giants have struggled to start the year amid market uncertainty, but now appear poised to stabilize after a significant downturn. One of the biggest players, KKR & Co. (KKR) , presents an attractive short-term set-up and looks well-positioned to benefit from a rebound in the broader market. KKR has oversold ‘buy’ signals from the daily stochastics and the DeMARK Indicators, supporting a minimum two-week relief rally. Initial resistance can be found at the 200-day MA (~$132), while secondary resistance can be found at the daily cloud (~$154). KKR fell below its 200-day (40-week) moving average and is now into support from its weekly cloud model, near $115. This further increases the likelihood of a bounce and provides favorable risk-reward in the short term. However, intermediate-term momentum is negative, suggesting that there is more work to be done before we feel confident a significant low is established. An upturn in the weekly stochastics back above 20% would provide evidence to this end. Secondary support can be found at the bottom of the weekly cloud ~$94, a level we wouldn’t be surprised to see tested before a more lasting low is established. The monthly chart shows headwinds that paint a less favorable picture for remainder of the year. A downturn in the monthly stochastics from overbought levels, coupled with a pinched monthly MACD on the verge of turning lower, indicates that KKR will face several months of corrective price action. This suggests the short-term bullish context should be considered counter-trend and give way to a lower high. Other stocks like Blackstone (BX) and Apollo (APO) share similar setups, with short-term signs of downside exhaustion supporting a snap-back rally after a steep sell-off. —Katie Stockton with Will Tamplin Access research from Fairlead Strategies for free here . 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