WCLD: Cloud Computing Is Not Recession-Proof (Archive)
Cloud software’s growth tailwinds clash with recession risks and Fed-driven valuation headwinds.
This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.
Elevator Pitch
- Cloud computing software companies have highly attractive growth prospects and operating leverage in their business models. But they are still not recession-proof.
- The all-powerful Fed indirectly dictates investors' opportunity costs and hence the price of cloud computing software companies. Furthermore, in a recession, enterprises are prone to cutting back tech spends.
- My technical analysis framework based on Trend Flow, Support/Resistance Location, and False Breakout Traps suggests incumbent downward flow in the WisdomTree Cloud Computing ETF but no valid sell entry yet.
Read the full article here.
Disclosures and Disclaimers
Past performance ≠ future results. Not investment advice. See full Disclaimer.
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