Stock Market Predictions: 4 Stocks To Watch In 2023

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2022 has not been an easy year for the stock market. The SP500 has posted a 16.8% loss year to date while investment in gold has resulted in a 3.2% loss (measured via SPDR Gold Shares return year to date) compared with a 14.3% loss for investments in 7-10 years. Treasury bonds (measured via iShares Trust - iShares 7-10 Year Treasury Bond ETF YTD return with the assumption of reinvestments of any dividends on ex-date). The stock market outlook for 2023 is no less cloudy with the Federal Reserve signaling continuing rate hikes in 2023.

Let us look at four big cap US stocks and see if we can make a 2023 stock market prediction for them, and perhaps find opportunities for those who plan to trade the forex market in 2023. 
 

  1. Tesla - Nasdaq: TSLA

Tesla is a global leader in electric car manufacturing. Besides fundamentals such as electric vehicle demand and global material supply bottlenecks, the varying involvement of the company’s Chief Executive Officer Elon Musk in other enterprises also is a major driver of Tesla's stock price due to the enormous popularity of Elon Musk.

Perfect Tesla stock prediction 2023 should therefore include also prediction of Musk’s involvement in at least two other major enterprises of Musk – SpaceX and Twitter.

In the four weeks since Musk took over Twitter on October 27, Tesla stock lost over 18%. Musk has said that he will appoint someone to take his place at the head of Twitter, without specifying any datelines.

As to SpaceX, Musk might have to spend more effort on making more money on his space exploration and satellite communications enterprise while trying to pay for the acquisition of Twitter. 

Let us use chart analysis of the weekly Tesla stock price presented below for Tesla stock prediction 2023.

 

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Chart 1:  Weekly TSLA candle chart

The TSLA weekly chart technical analysis reveals Tesla's price is in retreat after hitting an all-time high over one year ago at the end of October of 2021. There was one unsuccessful attempt for downtrend reversal since then – in January of 2022.

The Gann indicator gives another confirmation of the downward Tesla price momentum. The Gann fan indicator shows Tesla's price is retreating currently after testing the main downward 45-degree Gann aqua color line from below in March-April. The failure of Tesla's price to rise above that line is a clear indication that Tesla's price is in a downtrend.

However, the Relative Strength Indicator is in the Oversold zone currently. And the MACD indicator is giving a second bullish signal. It is most likely the price will rebound above the long-term support and remain in the lower quarter of the trading range since June 2022, in the aqua rectangle. Tesla's stock prediction for 2023 is $228-$252.
 

  1. Apple - Nasdaq: AAPL

Apple is a universally favored tech stock.

In its recent report, Apple's free cash flow came in at $20.8 billion, reflecting a 22.7% over-year growth.

While enjoying a strong iPhone demand from a loyal customer base, the company’s iPhone supply is presently experiencing a major negative impact due to China’s COVID lockdowns.

In case the COVID restrictions are lifted in China, Apple will enjoy revenue growth due to deferred purchases by loyal customers who weren’t able to get new phones due to supply shortages.

We can conduct a chart analysis of the weekly Apple stock price presented below for Apple stock prediction 2023.

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Chart 2:  Weekly AAPL candle chart

The AAPL weekly chart technical analysis shows Apple's price is in retreat after testing resistance fourteen weeks ago.

The price was rebounding since August 2018. However, the trend reversed after AAPL: Weekly reflected off the resistance in April 2022. It has fallen below the support line and the Gann fan indicator shows AAPL: Weekly has broken out below the 2x1 time/price line and will probably trade in that breakout direction until the next Gann angle.

It is most likely the price will remain below the resistance line in the aqua rectangle. Apple's stock prediction for 2023 is $146 - $151.
 

  1. Nvidia - Nasdaq: NVDA

Nvidia reported in its latest quarterly results that “year over year growth was driven primarily by leading US cloud providers and broadening set of consumer internet companies for workloads such as large language models, recommendation systems and generative AI.” Record data and automotive revenue were earned, while gaming and pro visualization platforms declined.

While automotive sector revenue is expected to grow, prospects for the gaming sector are not bright as the demand for mining equipment is not likely to recover while cryptocurrency prices are in free fall.

The company specified that sanctions on China-related chip sales negatively impact its current and future revenue streams.

Against this background, Nvidia's stock has gained 25% over the past month. The company’s Return on Equity (ROE), which measures how much profit the company generates for every $1 worth of shareholders' equity, is 28%:

ROE = Net Profit (from continuing operations) ÷ Shareholders' Equity = $6.0Billion ÷ $21Billion (Based on the trailing twelve months to October 2022) = 0.28.

For comparison, the average ROE reported by the industry is 19%.

At the same time, Nvidia is expensive relative to its peers – the company’s P/E ratio (Price to Earnings) of 65.4 is considerably higher than the average P/E of 25.4 for its peers: Advanced Micro Devices, Broadcom, Texas Instruments, and QUALCOMM with P/Es of 51.9, 21.5, 17.7 and 10.3 respectively.

Let us conduct a chart analysis of the weekly Nvidia stock price presented below for Nvidia stock prediction 2023.

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Chart 3:  Weekly NVDA candle chart

The NVDA weekly chart technical analysis shows Nvidia stock price is in retreat after hitting an all-time high in November 2021 – the same time as crypto market capitalization.

The price was rebounding since June 2019. However, the trend reversed after NVDA: Weekly reflected off the Gann 1x1 line in November 2021. It has broken out below the 2x1 time/price line and is testing 61.8 level support around $159 of  Fibonacci expansion charts (in yellow).

Most likely the price will trade in that breakout direction until the next Gann angle, which it will likely break out to. The price is expected to reach the aqua rectangle above the Fibonacci 161.8 level after breaching below the Fibonacci 100. Nvidia's stock forecast for 2023 is $106 - $120.
 

  1. Amazon - Nasdaq: AMZN

Amazon is a global e-commerce company. Its market value rose to more than $1.8 trillion in 2021. However, the stock is heading for a 44% decline this year. Amazon reported almost a 50% drop in operating income year over year in the third quarter while the free cash flow shifted to an outflow over the trailing 12-month period.

However, the company is a leader in the cloud computing business. Known as Amazon Web Services, or AWS, it made up more than 70% of Amazon's total operating income last year. And AWS' operating margin averages about 30% each quarter.

Let us study the weekly Amazon stock price presented below for Amazon stock price prediction 2023.

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Chart 4:  Weekly AMZN candle chart

The AMZN weekly chart technical analysis shows Amazon stock price is in retreat after hitting an all-time high in July 2021.

A long-term bullish trend started in early 2015 with the price testing of the green support line multiple times. However, the bullish trend reversed after AMZN: Weekly broke out below the 2x1 Gann time/price line in early January this year. It then breached below the support and then broke out below the 3x1 Gann time/price line, subsequently rebounding off the 23.6 level support at $84.5 of the Fibonacci extension indicator (in yellow).

Most likely the price will trade in that breakout direction until reaching the aqua rectangle above the Fibonacci 38.2 level. Amazon's stock price prediction for 2023 is $74.5 - $77.9.
 

Conclusion 

Our study suggests two out of four stocks – Nvidia and Amazon- are likely to continue declining while Apple and Tesla will continue trading in roughly the same range.


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Kurt Benson 2 months ago Member's comment

Worth the time to read - highly recommended.