Add Equity Exposure as Double Bottom Attempt is Underway

By Investing.com Staff

Canaccord Genuity technical strategist Javed Mirza recommends adding North American equity exposure in the short term and intermediate term.

In the short term, defined as a 1-2 week period, Mirza argues that equity markets are deeply oversold, and a sharp counter-trend bounce is likely to develop this week. “The , a good barometer for equity markets, is approaching near-term oversold levels that have supported previous short-term (2-4 week) rally phases in March, May, and June,” Mirza said.

In the intermediate-term, or 2-4 months period, the firm’s technical work strongly suggests adding equity exposure as a double bottom attempt is underway, in conjunction with equity markets reaching Sentiment and Oversold extremes consistent with prior intermediate-term (3-6 month) price lows. “If equity markets can hold above their 200-week moving averages in the coming weeks, it would imply that equity markets have forged a double bottom and that the secular bull market remains intact.”