Claire from Slovakia

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Top 3 most valuable brands to buy or short sell

August 16, 2020 23:20
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In this post, we will talk about the most valuable brands in the world and short-selling candidates that operate in industries that are in secular decline. Amazon Apple, Microsoft and Google are once again the most valuable brands in the world, according to the annual survey. Tech dominates the top ten, in fact, as do U.S. brands. The two geographical exceptions though are the two giants from China – Tencent and Alibaba. It is important to mention that despite the economic, social and personal impact of COVID-19, most of these companies saw their total brand value increase. Despite this, there are still overvalued stocks and Indices despite the sharp contraction in the market. Two-thirds of fund managers say that the stock market could make a correction and there are still lots of opportunities for shorting.

According to the survey, the most valuable brands have shown more resilience and less volatility in the current COVID-19 crisis than in the global economic crisis 2008-2009. American brands make up more than half of all the top 100 brands and it is important to mention that technology companies continue to dominate the top positions on the list. Amazon was listed in the number one place on the list. Its brand value is $415.8 billion. Microsoft, Google, Visa, Alibaba, Tencent, FaceBook, McDonald’s, and MasterCard round out the top 10. Other brands that are in the top 20 are: AT&T, Verizon, Coca Cola, IBM, Marlboro, The Home Depot, SAP, Moutai, Louis Vuitton and UPS.

  1. Amazon

Amazon maintained its position as the world’s most valuable brand, with its value increasing to 415 billion USD. It is important to say that the brand value of Amazon has increased by almost 100 billion USD in the 2020 year and accounts for a third of the total growth in the top 100. Amazon.com, Inc. offers a range of products and services through its Websites. Amazon is an example of how a good company can be expensive stock for investors. The fundamentals of the company are good but with 1517 billion USD market capitalization this company/stock is too expensive in my opinion. Despite this, Amazon stock is up more than 60% since March 2020 and this stock that can be an opportunity for shorting.

On this chart (the period from August 2019), I marked major support levels that can help traders to understand where the price could move. The current support level is 2 800 USD and if the price breaks this level it would be a “SELL” signal and we have the open way to 2 500 USD. If the price breaks 2 000 USD which represents very strong support, the next target could be located around 1 700 USD.

  1. Apple

Apple retained its second-place spot for the fifth year running on the world’s most valuable brands and Apple’s brand is valued at $352.2 billion. By comparison, Apple’s current market cap is $1.62 trillion and this company/stock is too expensive in my opinion. According to some predictions, the global economic shutdown may have put that smartphone upgrade cycle on hold. Some analysts also say that many short sellers may simply be using an Apple short position as a hedge on long positions in other tech stocks.

On this chart (the period from August 2019), I marked major support levels that can help traders to understand where the price could move. The current support level is 340 USD and if the price breaks this level it would be a “SELL” signal and we have the open way to 300 USD. If the price breaks 300 USD which represents very strong support, the next target could be located around 250 USD.

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  1. Alibaba

China’s e-commerce giant Alibaba took sixth on the list with $152.53 billion in brand valuation, up 16 percent year-on-year. Through its subsidiaries, the Company is engaged in online and mobile commerce through offering of products, services and technology that enable merchants, brands and other businesses to transform the way they market, sell and operate in the People’s Republic of China (China) and internationally. The fundamentals of the company are good but with 643 billion USD market capitalization this stock is overvalued in my opinion. Despite this, Alibaba stock is up more than 20% since May 2020 and this stock can be an opportunity for shorting.

On this chart (the period from August 2019), I marked major support levels that can help traders to understand where the price could move. The current support level is 230 USD and if the price breaks this level it would be a “SELL” signal and we have the open way to 220 USD. If the price breaks 200 USD which represents very strong support, the next target could be located around 170 USD.

 

 

 

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