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Won Europe Today

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Yesterday,

  • European markets closed in the green on heavy volume. Markets picked up after the Federal Reserve Chairman
    Jerome Powell commented before the Senate banking committee that the Fed expects inflation to peak by the
    middle of the year and thus would not require a dramatic increase in interest rates. As the markets are volatile, we
    recommend that investors adopt a patient approach by only adding stocks that have consolidated above their 50-
    DMA. Trim positions on the stocks that have breached their long-term key support levels.
  • The Stoxx 600 closed 0.7% higher on heavy volume, testing its 21-DMA resistance. Most key sectors closed in the
    green with Basic Resources, Oil, and Technology leading the rally with gains of 3.2%, 2.3%, and 1.5%, respectively.
    Among other major indices, France’s CAC and Germany’s DAX gained 0.7% and 0.4%, respectively, both retaking
    their 21-DMA on high volume. The FTSE 100 also gained 0.8% yesterday on high volume and reached a new 52-
    week high of 7,551.
  • Among the 17 indices we track in Europe, 15 registered a gain while Belgium and Switzerland closed in the red,
    declining 0.2% and 0.3%, respectively. There were no changes in the market status for any of the indices. Of the 17
    indices, 11 continue to be in a Confirmed Uptrend, four in an Uptrend Under Pressure, one in a Rally Attempt, and
    one in a Downtrend. The average distribution day count stands at 3.1.
  • Actionable names in the Focus List include Airbus (AIRS.FR; AIR:FP), Alcon (ALC.CH; ALC:SW), Beneteau
    (CHBE.FR; BEN:FP), Indutrade (INDT.SE; INDT:SS), Paragon BankingGroup PLC (PAG.GB; PAG:LN), Richemont
    (CFR.CH; CFR:SW), Teleperformance (ROFR.FR; TEP:FP), Verbund (VERB.AT; VER:AV), and Yougov (YOU.GB;
    YOU:LN).

Won Europe Today

Posted on by admin

Yesterday,

  • European markets climbed higher yesterday, partially recovering from Monday’s decline. The markets have had a
    volatile session thus far this year amid fears of tightening monetary policy and possible economic slowdown from
    the omicron variant. We recommend a patient approach to adding risk. Continue to focus on high quality ideas with
    an improving RS line while reducing exposure to ideas breaking below their long-term support levels.
  • The Stoxx 600 gained 0.8% on below average volume, partially recovering from Monday’s decline. It is trading
    above its key moving averages. The index reclaimed its 50-DMA and has immediate support at the level (-0.4%)
    and is 2% off highs. Most sectors closed in the green, with Technology advancing 1.9% and Healthcare closing
    1.0% higher.
  • Among major indices, France’s CAC, the U.K.’s FTSE, and Germany’s DAX closed in the green. All three are
    trading above their respective 21- and 50-DMA.
  • Among the 17 indices we cover, all closed in the green, with Portugal gaining the most, up 1.3%. Eleven indices are
    in a Confirmed Uptrend, one in a Rally Attempt, one in a Downtrend and the remaining four in an Uptrend Under
    Pressure. The average distribution day count stands at 3.6.
  • Actionable names in the Focus List include Airbus (AIRS.FR; AIR:FP), Alcon (ALC.CH; ALC:SW), Beneteau
    (CHBE.FR; BEN:FP), Paragon Banking Group PLC (PAG.GB; PAG:LN), Richemont (CFR.CH; CFR:SW),
    Teleperformance (ROFR.FR; TEP:FP), and Yougov (YOU.GB; YOU:LN).

Won Europe Today

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We released our European Weekly Summary yesterday. Click here to access the report. Key points from it include:

  • European markets had a bumpy first week of trading on fears of more aggressive policy tightening by the Fed and
    the rapid spread of the omicron variant. The Stoxx 600 lost 20bps last week, but remains in a Confirmed Uptrend
    with three distribution days and immediate support at its 50-DMA. We recommend a patient approach to adding
    risk and reducing exposure in ideas breaking below logical levels of support. Continue to focus on quality ideas
    showing strong near-term relative strength and trading above their respective 50-DMA.
  • The trend toward value (+2.9%) compared with growth (-3.0%) accelerated last week, with leaderships emerging
    among Financials, Basic Material, Auto, and Travel & Leisure stocks.
    European Focus List Update: We did not add any new names last week and removed Hermès Intl. (RMS.FR;
    RMS:FP).

Won Global View

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The U.S. market remains in a Confirmed Uptrend. Indices reversed off session lows after gapping down at the open. The S&P 500
closed near session highs and slightly below resistance at its 50-DMA (4,675). The next level of support on the S&P 500 is the rising
100-DMA (4,565). The Nasdaq closed above its 200-DMA and positive on the session after breaching its 200-DMA intraday. The
distribution day count stands at seven and three, respectively, with no expiration this week.

Won Global View

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The U.S. market is in a Confirmed Uptrend. Indices were under selling pressure to start the new year, however, the S&P 500 found
support slightly above its 50-DMA (4,674). The Nasdaq broke below its 50- and 100-DMA after declining ~4% last week and is testing
the December lows (14,860), followed by its rising 200-DMA (14,681). The distribution day count is at seven and three, respectively,
with no days set to expire this week.

Won Europe Today

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On Friday,

  • European markets closed lower on high volume. The dip was caused by a record high Eurozone inflation of 5% y/y
    in December, surging COVID-19 infections, and weaker-than-expected U.S. jobs report data. The recent inflation
    data raised uncertainties regarding the current European Central Bank’s (ECB) monetary policies and the
    possibility of ECB hiking interest rates to curb inflation. We recommend that investors reduce exposure to stocks
    breaching their long-term support levels and wait for rising stocks to consolidate above their 50-DMA before adding
    risk.
  • The Stoxx 600 retreated 39bps while continuing to form the right side of a flat base. The index is trading 2% off its
    all-time high and 1% off pivot. It is testing its 50-DMA support level. Most key sectors closed in the red with Auto
    declining 1.1% and Travel & Leisure dropping 1.6%. The prospect of rising interest rates led to the banking sector
    gaining 1.1%.
  • Among other major indices, France’s CAC and Germany’s DAX dipped 0.4% and 0.7%, respectively, on high
    volume. Germany’s DAX is trading near its key support levels and is testing its rising 50-DMA. France’s CAC is
    significantly above its support levels, trading 2.1% below its all-time high of 7,376. The FTSE 100 gained 0.5%,
    trading 0.4% off its all-time high.
  • Among the 17 indices we track in Europe, nine closed in the red while seven closed in the green. Denmark was
    closed for a holiday. Finland and Sweden recorded a distribution day each, thus bringing the average distribution
    day count of European markets to 2.8.
  • Actionable names in the Focus List include Airbus (AIRS.FR; AIR:FP), Alcon (ALC.CH; ALC:SW), Indutrade
    (INDT.SE; INDT:SS), Infineon Techs (Xet) (IFXX.DE; IFX:GR), Nibe Industrier (NIBE.SE; NIBEB:SS), Paragon
    Banking Group PLC (PAG.GB; PAG:LN), Schneider Electric (QT@F.FR; SU:FP), Teleperformance (ROFR.FR;
    TEP:FP), and Yougov (YOU.GB; YOU:LN).

Won Europe Today

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We released our Weekly Global Laggards Report yesterday (please 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 under weighted
as they may be vulnerable to further downside risk and underperformance. European names highlighted this week include
Royal Unibrew (RBR.DK; RBREW:DC), Euronext (ENX.FR; ENX:FP), Genmab (GEN.DK; GEN:CO), and Securitas B
(SUBF.SE; SECUB:SS).

Won Europe Today

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Yesterday,

  • European markets moved marginally as they sit near their highs. Even though this week saw some optimism about
    the omicron variant and vaccinations, sentiment has been hampered by concerns over tighter monetary policy,
    which particularly affects tech shares. We recommend a patient approach to adding risk. Continue to focus on high
    quality ideas with an improving RS line while reducing exposure to ideas breaking below their long-term support
    levels.
  • The Stoxx 600 ended flat, adding less than 0.1% on below average volume. It is trading above its key moving
    averages. It has immediate support at its 50-DMA (-2.8%) and is currently at highs. Sectors closed mixed, with
    Automobile and Parts advancing 2.7% and Oil and Gas closing 1.2% higher.
  • Among major indices, France’s CAC, the U.K.’s FTSE, and Germany’s DAX are trading above their respective 21-
    and 50-DMA.
  • Among the 17 indices we cover, Luxembourg gained the most, up 1.2%. Austria and Italy were shifted to a
    Confirmed Uptrend from an Uptrend Under Pressure after the indices reclaimed their previous rally highs. Twelve
    indices are in a Confirmed Uptrend, one in a Rally Attempt, and the remaining four in an Uptrend Under Pressure.
    The average distribution day count stands at 3.5.
  • Actionable names in the Focus List include Indutrade (INDT.SE; INDT:SS), Air Liquide (AIRS.FR; AIR:FP), Alcon
    (ALC.CH; ALC:SW), Dassault Systèmes (DSY.FR; DSY:FP), Infineon Techs (Xet) (IFXX.DE; IFX:GR), Nibe
    Industrier (NIBE.SE; NIBEB:SS), Paragon Banking Group PLC (PAG.GB; PAG:LN), Schneider Electric (QT@F.FR;
    SU:FP), Teleperformance (ROFR.FR; TEP:FP), and Yougov (YOU.GB; YOU:LN).