The stock market is intricate and ever-changing, often prompting investors to seek wisdom from industry experts. Recently, Ari Wald, a supremely insightful head of technical analysis at Oppenheimer, shared his thoughts on Berkshire Hathaway and other pivotal stocks during a CNBC segment. His analysis not only highlights the performance of these stocks but also provides a glimpse into the market dynamics that could affect investors’ decisions.
Berkshire Hathaway, the investment empire helmed by the legendary Warren Buffett, has drawn attention following a robust earnings report that showcased impressive growth. The company reported an astounding 71% increase in fourth-quarter operating profit, reaching approximately $14.5 billion. This remarkable success translated into a nearly 4% boost in share prices for both its A and B shares, with the B shares trading around $500, a price that is somewhat accessible for the average investor when compared to the A shares, which are priced at $747,485.
Wald emphasizes the significance of this stock’s movement, characterizing it as a breakout beyond its previous peak in September at $485. He interprets this uptick as a resumption of the stock’s enduring upward trajectory, promoting the idea of acquiring shares during this bullish phase. Recording an increase of 10% year-to-date, Berkshire’s B shares appear to be setting the stage for possible new highs in the forthcoming months, according to Wald’s technical analysis.
Examining Domino’s Pizza: Struggles Amidst Market Pressure
In contrast, the outlook for Domino’s Pizza is less optimistic. After revealing lower-than-expected earnings and revenue for its fourth quarter, the stock went on to decline about 1.5%. Wald advises against viewing this dip as a buying opportunity, suggesting a troubling pattern in the stock’s performance over the last few years. He pointed out that the stock has consistently been trending around its 200-day moving average since July of the previous year, indicating a lack of momentum.
More critically, Wald observes that Domino’s has been making lower highs relative to the market since 2020, implying that its performance has not been robust in comparison to its peers. This assessment leads Wald to prefer Darden Restaurants, the parent company of Olive Garden, which he believes possesses stronger momentum and a brighter outlook. Darden has managed a 4.4% increase in share price this year, while Domino’s shares, struggling in the same timeframe, have only shown an 8.6% rise.
Wald’s expertise also spans Constellation Energy, which he identifies as a high-momentum stock still on the rise, despite experiencing recent volatility associated with the technology sector’s downturn. While he maintains a buy rating for Constellation, he advises caution in adding new positions, particularly during a time marked by elevated market volatility.
Key to Wal’s strategy is Constellation’s ability to hold above a critical 200-day moving average, currently standing at $235. He asserts that the stock remains in a long-term uptrend as long as it maintains this crucial support level. Demonstrating resilience, shares of Constellation Energy have surged roughly 20% year-to-date and saw a staggering increase of 91% in 2024. Wald advocates for a strategy of patience during unpredictable market conditions, reaffirming the importance of staying the course with proven winners.
Insights from market analysts like Ari Wald provide invaluable perspectives for investors navigating the current landscape. With Berkshire Hathaway positioned for growth, Domino’s facing challenges, and Constellation Energy showing resilience amidst volatility, investors have critical information at their fingertips to inform their strategies. As financial markets remain prone to rapid shifts, prioritizing careful analysis and understanding underlying trends can greatly influence investment success. Adopting a discerning approach towards buying opportunities, particularly during periods of uncertainty, can serve investors well as they work towards enhancing their portfolios.