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Won Global View
The U.S. market has been downgraded to a Downtrend. The S&P 500 closed below its March 16 follow-through day low. The next level of support is February lows at 4,114. The Nasdaq closed below March low support at 12,555, with the next level of support at ~12,400, followed by ~12,000.
Won Europe Today
We released our European Weekly Summary yesterday. Click here to access the report. Key points from it include:
- The Stoxx 600 was moved to an Uptrend Under pressure after the index breached its 50-DMA for the first time
since we spotted a follow-through day on March 16. Ten markets, including key markets such as France, the U.K.,
and Germany, were also moved to an Uptrend Under Pressure. - The lack of direction taken by major indices in recent weeks, coupled with increasing distribution, leads us to take a
more cautious view in adding risk to portfolio. Among the 11 O’Neil sectors, only Basic Resources, Staples, Health
Care, and Energy trade above their 200-DMA. Our rotation chart continues to show improving short-term
momentum (over four weeks) among defensive sectors, particularly Health Care, Staples, and Utility. - Europe Focus List Update: We did not add new names last week and removed Axfood (AXFO.SE; AXFO:SS).
Won Europe Today
Yesterday,
- European markets closed in the red due to concerns surrounding slowdown in China despite tailwinds from
Emmanuel Macron’s victory in the French presidential elections. As markets feared enforcement of Shanghai-like
lockdowns in Beijing, sectors with significant exposure to the Chinese markets, including Mining, Oil, and Luxury
Cyclicals, declined sharply. However, we expect markets to recover in the short term as Beijing is deploying mass
testing for more than 20M residents. We recommend that investors add leadership names breaking out in Basic
Resources, Consumer Staples, and Health Care that are showing strong momentum. - The Stoxx 600 declined 1.8% and breached its 50-DMA support level. Mining, Oil, and Banking sectors declined
6.0%, 4.8%, and 3.0%, respectively. - Among other major indices, France’s CAC and Germany’s DAX declined 2.0% and 1.5%, respectively, and
breached their 50-DMA. The U.K.’s FTSE 100 also breached below its 50-DMA after declining 1.9%. - All the 17 indices we track in Europe closed in the red. Twelve indices breached their 50-DMA on high volume and
registered distribution days. These indices were downgraded to an Uptrend Under Pressure, while the remaining
five continue to be in a Confirmed Uptrend. The average distribution day count stands at 5.1. - Actionable names in the Focus List include Alcon (ALC.CH; ALC:SW), EDP Renovaveis (EDPR.PT; EDPR:PL),
Novo Nordisk (NON.DK; NOVOB:DC), Sonova N (SOON.CH; SOON:SW), and Vantage Towers (VTWRX.DE;
VTWR:GR)
Won Global View
The U.S. market remains in an Uptrend Under Pressure. Indices recovered off intraday lows and closed positive on the session. The S&P 500 closed at session highs and continues to consolidate along price support at ~4,278. The Nasdaq bounced +1% higher and remains choppy along ~13,000. The distribution day count is elevated at seven and six, respectively.
Pouring oil on troubled waters: Time to consider Malaysian palm oil names?
Attached is a note on Palm Oil from William O’Neil India Analysts Bhaskar Maheshwari and Indrajith Aditya.
Key points from this note:
Ban on exports of vegetable oils by Indonesia can prove to be a boon for Malaysian palm oil companies. We believe Large Cap Malaysian stocks like IOI Corporation (INDY.MY) and Sime Darby Plantation (SIMD.MY) with good dividend yields should do well.
The ban is likely to put further margin pressure on Indian FMCG names as Indonesia supplies nearly 50% of India’s palm oil requirements.
Adani Wilmar (AD4.IN), a proxy play on commodities, is set to benefit from it.
Won Global View
The U.S. market remains in an Uptrend Under Pressure. The S&P 500 reversed sharply from 200-DMA resistance
last week, closing down 2.7% and back below all key moving averages. It is now trading slightly below support at 4,278
before February lows of 4,114. The Nasdaq failed at its 50-DMA (13,654), declining 3.8% for the week, and is now just
3% above support at March lows (12,555). The distribution day count remains elevated at seven and six, respectively.
Won Europe Today
On Friday,
- European markets closed in the red after the Fed Chair Jerome Powell discussed the possibility of a 50bps interest
rate in May. On Monday, European markets will also be digesting the victory of Emmanuel Macron in the French
presidential elections based on his pro-business and pro-EU agenda. We recommend that investors add
leadership names breaking out in Basic Resources, Staples, and Health Care that show strong momentum. - The Stoxx 600 declined 1.79% and is trading 8% off highs in a tight consolidation between its support levels. Mining,
Auto, and Travel sectors were among the worst affected and declined 3.6%, 2.5%, and 3.1%, respectively. - Among other major indices, France’s CAC and Germany’s DAX declined 2.0% and 2.5%, respectively, while
continuing to trade below their 21-DMA. The K.’s FTSE 100 also breached below its 21-DMA after declining 1.4%. - All 17 indices we track in Europe closed in the red. With no change in market conditions, all indices continue in a
Confirmed Uptrend. With 10 indices registering a distribution day, the average distribution day count stands at 4.5. - Actionable names in the Focus List include Alcon (ALC.CH; ALC:SW), EDP Renovaveis (EDPR.PT; EDPR:PL),
Novo Nordisk (NON.DK; NOVOB:DC), Sonova N (SOON.CH; SOON:SW), and Vantage Towers (VTWRX.DE;
VTWR:GR).
Won Global View
The U.S. market remains in an Uptrend Under Pressure. The S&P 500 reversed off 200-DMA (4,497) resistance, closing down 1.4% in higher volume. Near-term support is ~4,370 before ~4,278. The Nasdaq reversed from 50-DMA (13,687) resistance, falling 2% also in higher volume. The next level of support is ~13,094 before year-to-date lows. The distribution day count is elevated at six days each.
Won Europe Today
We released our Weekly Global Laggards Report today. Click here to access the report. The stocks highlighted in this
report are laggards relative to their own domestic markets. We recommend that they be underweighted as they may be
vulnerable to further downside risk and underperformance. European names highlighted this week include Wienerberger
(WNBA.AT; WIE:AV), Koninklijke Vopak (VPK.NL; VPK:NA), Julius BaerGruppe (BAER.CH; BAER:SW), Biomerieux
(BIM.FR; BIM:FP), and Fnac Darty (FNAC.FR; FNAC:FP).
