Oppenheimer Bullish On Stocks, Bearish On Gold And Oil

Oppenheimer recently released a report that focused on technical analysis. In the report, analyst Ari Wald took a look at the technical health of the stock market, gold, and oil.

Cyclicality the way to go
The S&P 500 seems to be stalled as of late, but Oppenheimer sees the relative strength of the Consumer Discretionary sector versus the Consumer Staples sector as an indication that cyclical stocks are hot at the moment. Not surprisingly, the worst-performing sectors since the S&P 500’s May peak have been sectors that are sensitive to rising interest rates and/or commodities, including Energy and Utilities.

Bullish on the market
Despite the sluggishness in the S&P 500 recently, analysts remain bullish on the stock market. “Overall, while trading could remain choppy and performance mixed due to ongoing market rotations, we believe there are enough stocks in an uptrend to avoid a broad-based market selloff, and we therefore maintain our positive S&P 500 outlook,” Wald writes.


The report names S&P 500 support levels of 2070 and 2040, with 2200 serving as current resistance.

Optimism down
According to the report, stock market optimism has declined from 85 percent bullishness in Q4 2014 to only 61 percent today. Analysts believe that overly optimistic expectations will no longer serve as a headwind for the market in the near-term.


Gold and oil
Analysts see pessimism on oil prices providing a boost to WTI in the near-term, but oil's long-term downtrend likely means that $65-$67/bbl will prove to be “formidable resistance.” The United States Oil Fund ETF USO is down 47.5 percent in the past year.


Despite pessimistic sentiment, Oppenheimer believes that gold is also still caught in a long-term bearish trend. Oppenheimer sees downsize risk to gold as low as $1000/oz. The SPDR Gold Shares ETF GLD is down 6.9 percent in the past year.