Key points:
- Scottish Mortgage (SMT) shares are up 4.71% in the past week.
- The investment fund had pulled back in the past two weeks.
- Can SMT shares keep rising? Read on to find out.
The Scottish Mortgage Investment Trust PLC (LON: SMT) share price rose 4.71% over the past week after falling over 100p from its 11 August 2022 high of 938.6p to its current price. The two-week decline came after a string rally from the bottom hit on 16 June 2022 of 669.8p.
The investment company, which is focused on tech companies, has seen its share price slump as its primary holdings, including Tesla, Moderna, Netflix and Meta Platforms, have seen a sharp decline in their stock prices amid a massive stock market selloff.
Also read: Best UK Tech Stocks To Buy Right Now.
The question on most investors’ minds is, will SMT shares recoup their losses and trade at the highs witnessed last year? The short answer is yes, SMT shares will recover since the stock markets tend to go higher over time. However, the more significant concern is that nobody knows when the rally shall begin.
The current macroeconomic environment is not conducive to a significant stock market rally. The Federal Reserve remains focused on raising interest rates to combat record-high inflation, with many warning that more aggressive rate hikes would trigger an economic recession in the United States.
Scottish Mortgage Trust shares will recover along with the broader stock markets. However, at the moment, many of the companies in which the fund has a stake have slowed down their hiring, and some are even laying off employees due to the challenging operating environment.
SMT shares are currently trading below a crucial resistance level, and a break above this could trigger a higher rally. However, many people at the moment are looking forward to the Federal Reserve’s upcoming rate hike on Wednesday.
Still, some market experts warn that there could be further losses in store for the stock markets as part of the third wave of this year’s stock market crash, but only time will tell whether this is true. Therefore, before buying, I would wait to see if SMT shares can break and hold above the crucial resistance level.
*This is not investment advice.
The Scottish Mortgage (SMT) share price chart.
The Scottish Mortgage share price has risen 4.71% in the past week but is still down 39.27% for the year.