Piper Sandler's Craig Johnson Bull Case for Small-Cap Stocks

Small-Cap Opportunity

• 💡 Craig Johnson, Chief Market Technician at Piper Sandler, presents a bull case for small and midcap stocks.
• 🎯 He notes that while large-cap 'Mag Seven' stocks have been treading water, smaller names are showing improvement below the surface.
• 📈 The Russell 2000 index exhibits a classic inverted head and shoulders pattern, suggesting a potential move to new highs, possibly above 2450 and even towards 2600.
• 🚀 A Federal Reserve rate cut is identified as a potential catalyst to further propel small and midcap stocks higher.

MongoDB Technical Outlook

• 💡 MongoDB experienced a significant downtrend reversal on its weekly chart, solidified by strong volume.
• 🎯 From a technical perspective, there is decent upside potential, with a measured target around $524, representing approximately 67% growth from current levels.

UnitedHealth Group Technicals

• ⚠️ Johnson's technical analysis for UnitedHealth Group is not constructive.
• 📉 Despite a significant price drop and investor interest (like Warren Buffett), upcoming tax-loss selling is expected to pressure the stock.
• 🚫 From a pure technical standpoint, there is no compelling reason to buy the stock at this time.

Market Sentiment and Performance

• 🎯 The current market environment is characterized by investors being caught off guard by recent market moves and fighting the tape.
• 🧠 This resistance from traders suggests the market is climbing a wall of worry, with negative sentiment persisting across various sectors, including AI and broader indexes.