The U.S. market remains in an Uptrend Under Pressure. Indices gapped down but closed only slightly lower after rallying off session
lows. The S&P 500 is testing its 50-DMA (4,080) for the second time in the last six sessions. The Nasdaq continues to trade above weak
price support along ~13K but remains below heavy resistance that begins at its 100-DMA (13,454). The distribution day count increased to
nine on the S&P 500 and remained at five on the Nasdaq.
Author: admin
Won Europe Today
Yesterday,
- European markets ended in positive territory on optimism around several countries easing economic restrictions,
falling unemployment rate in the U.K., and strong earnings reports from companies. - The Stoxx 600 index rose 0.17% with the Travel and Leisure (+1.56%) leading gains. Telecom stocks lagged due to
weak earnings from Iliad and Vodafone. The index is in a Confirmed Uptrend with five distribution days. - Among other major indices, France’s CAC recorded a distribution day and is finding support at its 10-DMA.
Germany’s DAX was almost flat on lower volume, while the U.K.’s FTSE gained marginally on higher volume. - Barring France and Germany, all other markets closed positive with no change in the market status.
- Actionable names in the Focus List include Intesa Sanpaolo (ISP.IT; ISP:IM), B&M European Value Retail (BME.GB;
BME:LN), Novo Nordisk (NON.DK; NOVOB:DC), Carl Zeiss Meditec (AFXX.DE; AFX:GR), Vitrolife (VITR.SE;
VITR:SS), and Hermes (RMS.FR; RMS:FP).
Won Global View
The U.S. market remains in an Uptrend Under Pressure. Indices pulled back sharply into the close to finish down for a second day. The
S&P 500 broke through 21-DMA support just two days after retaking the level (4,147), while it remains 1.3% above support at its 50-DMA
(4,076). The Nasdaq declined slightly off its 100-DMA (13,450), which is the first in area of converging moving averages and resistance
from its April break above 13,600. Both indices picked up a distribution day. The S&P 500 distribution day count stays at eight as it also
lost one due to time, while the Nasdaq now has five.
Won Europe Today
We released our European Weekly Summary yesterday, click here to access the report.
- In the short term, caution is required regarding European equities due to the combination of rising distribution
across indices, lower number of breakouts, and the extended nature of the Stoxx 600. - Our rotation chart continues to show improving short-term momentum among defensive sectors, e.g., Staple,
Utility, and Health Care, while Technology faced further technical deterioration. - Among Technology stocks, STMicroelectronics (STM.IT; STM:IM) and Comet Holdings ‘R’ (COTN.CH; COTN:SW)
were removed from our European Focus List. Stocks showing technical deterioration in the sector and still
extended (further downside expected) include ASM International (ASIN.NL; ASM:NA), Electrocomp (ECM.GB;
ECM:LN), and Be Semiconductor (BESI.NL; BESI:NA). - This week’s “Stocks of Interest” include top-rated names such as NTG Nordic (NEU.DK; NTG:DC, Transportation),
Zehnder (ZEHN.CH; ZEHN:SW, ConsCyclicals), and, among large caps, OMV (OMV.AT; OMV:AV, Energy). They
are breaking out and are currently actionable. See Sector Score Cards for details.
Won Global View
The U.S. market remains in an Uptrend Under Pressure. Indices pulled back and are consolidating after bouncing late last week. The
S&P 500 remains above support at its 50-DMA (4,070), while the Nasdaq declined slightly off its 100-DMA (13,444), which is the first in the
area of converging moving averages or heavy resistance. The distribution day count increased to eight on the S&P 500 and remains at
four on the Nasdaq; however, one day will expire after the close on the S&P 500.
Won Global View
The U.S. market remains in an Uptrend Under Pressure. The S&P 500 bounced off its 50-DMA after a sharp sell-off early last week.
The Nasdaq, already below its key moving averages, is bouncing into resistance at the converging 50- and 100-DMA. The distribution
day count stands at seven and four, respectively, with one day expiring on the S&P 500 this week.
Won Europe Today
On Friday,
- European markets advanced higher, recovering from week’s losses on concerns of growing inflation. All the
markets ended in positive territory with Denmark being in a holiday. Belgium was upgraded to a Confirmed Uptrend
after it reclaimed its prior high. We would like investors to remain cautious as the average distribution day count
remains elevated at 4.7. - The Stoxx 600 retook its 10-DMA, gaining more than 100bps. Gains were led by Oil & Gas and Retail stocks. The
index is in a Confirmed Uptrend with five distribution days. - Among other major indices, France’s CAC and Germany’s DAX retook their respective 10- and 21-DMA. The U.K.’s
FTSE underperformed France and Germany but gained more than 100bps. - Actionable names in the Focus List include Intesa Sanpaolo (ISP.IT; ISP:IM), B&M European Value Retail (BME.GB;
BME:LN), Novo Nordisk (NON.DK; NOVOB:DC), Carl Zeiss Meditec (AFXX.DE; AFX:GR), Vitrolife (VITR.SE;
VITR:SS), and Hermes (RMS.FR; RMS:FP).
Pet Center Comercio
Pet Center Comercio (PCC) is Brazil’s largest pet retailer. The company operates
120 stores and an ecommerce website. PCC seeks to provide a ‘one-stop shop’
experience; its stores have veterinary clinics, pet grooming stations, and
adoption centers built within them. They are 1K square meters on average and
retail 8K–12K SKUs.
GLOBAL FASHION GROUP
The stock has declined 19% in the last three weeks due to general
market rotation out of growth stocks as the economies reopen. It is
currently making a stage-three consolidation base, trading 27% below
the pivot of €14.96. Next support is at the low of the current base at
€10.10 (7% away).
• Weak fundamental ratings as GFG is in the growth stage of its lifecycle.
These metrics are expected to improve as the company’s adjusted
EBITDA turned profitable in 2020. EPS Rank of 25, Composite Rating of
24, and SMR Rating of D.
• Technical profile has suffered in the last few weeks as the stock
breached its 50- and 100-DMA. RS Rating declined to 85 from 97, while
A/D Rating fell to D+. Up/Down Volume ratio of 1.2x.
Won Europe Today
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 underweighted as they may be vulnerable to further downside risk and underperformance.
- European names highlighted this week include Christian Hansen (CHR.DK; CHR:DC), Valeo (FR.FR; FR:FP), Soitec (SOI.FR; SOI:FP), and Barry Callebaut (BARN.CH; BARN:SW).
