Long Trade Idea
Enter your long position between $534.20 (the intra-day low of its last bearish candlestick) and $547.00 (yesterday’s intra-day high).
Market Index Analysis
- Mastercard (MA) is a member of the S&P 100 and the S&P 500 indices.
- Both indices trade inside bearish chart patterns with rising bearish trading volumes.
- The Bull Bear Power Indicator of the S&P 500 is bullish but below its descending trendline.
Market Sentiment Analysis
Equity futures are trading higher this morning, but are coming off their highs, as markets brace for the delayed January NFP report. It is likely to inject volatility and direct price action. While economists expect a median gain of 68,000 jobs with an unchanged unemployment rate of 4.4%, it could surprise to the downside. The government has already downplayed the importance of this report, and the next review is likely to show an overall reduction in jobs over the past year. A weak number could add to selling pressure after weak December retail sales, and the software sell-off sparked by AI.
Mastercard Fundamental Analysis
Mastercard is a multinational payment card services provider. It is one of the top three credit/debit card issuers globally. It also offers data insights, cybersecurity, and fraud management services.
So, why am I bullish on MA following its earnings release?
Mastercard reported revenues of $8.81 billion and earnings per share of $4.76, beating both the top and bottom lines. Still, my bullishness stems from its high-growth, value-added services like cybersecurity, data analytics, and fraud solutions, which grew faster than its core solutions. MA also benefits from rising cross-border transactions amid rising travel demand, with gross dollar volume (GDV) rising 7% to $2.8 trillion, confirming solid network usage and increasing its pricing power.
Metric | Value | Verdict |
P/E Ratio | 32.67 | Bearish |
P/B Ratio | 61.75 | Bearish |
PEG Ratio | 1.70 | Bullish |
Current Ratio | 1.03 | Bearish |
ROIC-WACC Ratio | Positive | Bullish |
The price-to-earnings (P/E) ratio of 32.67 makes MA an expensive stock. By comparison, the P/E ratio for the S&P 500 is 29.59.
The average analyst price target for MA is $661.89. This suggests excellent upside potential with decreasing downside risks.
Mastercard Technical Analysis
Today’s MA Signal
- The MA D1 chart shows price action breaking out above its horizontal support zone.
- It also shows price action between its descending 50.0% and 61.8% Fibonacci Retracement Fan levels.
- The Bull Bear Power Indicator turned bearish but remains above its ascending trendline.
- The average bullish trading volumes are higher than the average bearish trading volumes.
- MA advanced less than the S&P 500 Index, a bearish indication, but bullish catalysts are rising.
My MA Long Stock Trade
- MA Entry Level: Between $534.20 and $547.00
- MA Take Profit: Between $589.67 and $601.62
- MA Stop Loss: Between $508.63 and $518.27
- Risk/Reward Ratio: 2.17
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