The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq pressed higher for a third straight session holding above their respective 21-DMA and now set to face resistance at their rolling 50-DMA (S&P 500: 4,437; Nasdaq: 13,896). Support is now the slowly rising 10- and 21-DMA.
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In a State Council meeting chaired by Chinese Vice Premier Liu He, the authorities emphasised the need to keep the stock market stable, support overseas share listings and possibly end the regulatory crackdown in the tech industry. These issues have dampened investor sentiment over the past 18 months, leading to large institutional outflows and significant de-rat ings in major Chinese tech stocks.
Won Global View
The U.S. market has been upgraded to a Confirmed Uptrend. The S&P 500 staged a day 15 follow-through day. The S&P 500 rose 2.2% on higher volume and regained its 21-DMA (4,313). The next level of resistance is the downward sloping 50-DMA (4,445). The Nasdaq jumped 3.7%, closing at session highs and regaining its 21-DMA (13,351). The declining 50-DMA (13,936), which is 4% higher, is the next level of resistance.
Won Europe Today
Yesterday,
- European markets rallied strongly and reached near its two-week highs. The rally was driven by Beijing’s promises
to increase measures for boosting the Chinese economy as well as agreeing to further policies favorable for capital
markets. This news, coupled with the progress expected on ceasefire negotiations in Ukraine, led to strong gains.
Despite the rally, we recommend that investors continue adopting a patient approach and wait for the uptrend in
Europe to persist. Due to severe technical deterioration over the past three weeks, there are currently no stocks
breaking out. We expect to witness leadership broadening among growth stocks in the upcoming weeks. - The Stoxx 600 gained 3.1% on high volume, reclaiming its 21-DMA support and testing resistance at its declining
50-DMA (2% below), while trading 9% off highs. Broad-based buying was seen with Technology, Auto, and Banking
stocks gaining 6.6%, 5.2%, and 5.1%, respectively, and names with significant exposure to China such as Prosus
(PROS.NL; $100B market cap) advancing more than 22%. Consumer discretionary stocks were also up driven by
reports from China, leading to several luxury names gaining more than 5%. - Among other major indices, France’s CAC and Germany’s DAX reclaimed their 21-DMA support, after gaining 3.7%
and 3.8%, respectively. The U.K.’s FTSE 100 retook its 21- and 200-DMA support levels after gaining 1.6%. - Among the 17 indices we track in Europe, all closed strongly in the green. Europe, Austria, France, Germany,
Ireland, the U.K., Italy, the Netherlands, Spain, Sweden, and Switzerland recorded a follow-through day. Fourteen
indices are in a Confirmed Uptrend, two in an Uptrend Under Pressure, and one in a Rally Attempt. As none of the
indices recorded a distribution day yesterday, the average distribution day count stands at 2.3. - Actionable names in the Focus List include Astrazeneca (AZN.GB; AZN:LN), Axfood (AXFO.SE; AXFO:SS), Ipsos
(IPS.FR; IPS:FP), Salmar (SALM.NO; SALM:NO), and Solaria Energia (SEM.ES; SLR:SM).
Won Global View
The U.S. market remains in a Rally Attempt. The S&P 500 rallied 2.1%, closing above its 10-DMA and near session highs. Despite the rally, day over day volume was lower, negating a potential follow-through. Today will mark day 15 of the attempted rally on the S&P 500 with support at 4,114 and resistance at the rolling 21-DMA (4,312). The Nasdaq rallied nearly 3% after undercutting February lows Monday and now faces resistance at the rolling 10-DMA (13,063), a level the index reversed from on four of the last eight days. The earliest the Nasdaq can stage a follow-through day is Friday.
Won Europe Today
Yesterday,
- European markets opened sharply in the red due to concerns regarding the COVID-19 lock downs in China
affecting supply chains as well as prospects of U.S. sanctions on China over military aid to Russia for the Ukraine
conflict. However, the market stabilized as the U.S. inflation data released later during the day indicated that despite
the producer prices increasing 10% y/y and 0.8% m/m in February, the inflation was below estimates of 0.9% m/m
and slowed down from January’s 1.2% m/m inflation, and thus raising a possibility that inflation had peaked in
January. Oil prices also continued to decline further, closing below $100/barrel at $98.57. We recommend that
investors continue adopting a patient approach and add only those names which have consolidated around their
50-DMA. Trim positions on stocks that have breached their long-term key support levels. - The Stoxx 600 declined 28bps and continued to trade below its key moving averages and 12% off highs after finding
support at the bottom of a stage-one 11-week consolidation. Mining, Construction, and Financial Services stocks
declined 2.1%, 0.7%, and 1.2%, respectively, while Travel, Auto, and Media stocks gained 0.8%, 1.1%, and 1.9%,
respectively. - Among other major indices, France’s CAC and Germany’s DAX continue to trade below their 200-DMA and key
moving averages, after declining 23bps and 9bps, respectively. The U.K.’s FTSE 100 found resistance at its 200-
DMA after declining 25bps. - Among the 17 indices we track in Europe, 14 closed in the red, while the Netherlands and Italy closed strongly in
the green and Spain closed flat with a positive bias. With no change in the market status, 12 indices are in a Rally
Attempt, two in an Uptrend Under Pressure, and three in a Confirmed Uptrend. With Belgium and Norway recording
a distribution day each, the average distribution day count stands at 2.3. - Actionable names in the Focus List include Astrazeneca (AZN.GB; AZN:LN), Axfood (AXFO.SE; AXFO:SS), Ipsos
(IPS.FR; IPS:FP), Salmar (SALM.NO; SALM:NO), and Solaria Energia (SEM.ES; SLR:SM).
Won Global View
The U.S. market remains in a Rally Attempt. The Nasdaq pulled back sharply, undercut its February low (12,587), and closed near the intraday low. However, the pullback on the S&P 500 was less severe and remained above its February low (4,114), thus keeping the weak rally attempt and prospects of a follow-through day alive. We will shift the market status to a Downtrend should the S&P 500 undercut its February low.
Won Europe Today
We released our European Weekly Summary yesterday. Click here to access the report. Key points from it include:
- The Stoxx 600 is in a Rally Attempt. The index has been able to hold its March 7 low, regaining 6% from its bottom.
It is now likely to retest its declining 21-DMA. We remain very cautious on the overall market. - Rotation Chart (over four weeks) continuing to improve in Basic Materials, Consumer Staple, and Health Care.
Utility, Financial, Retail, and Transportation continue to show weak trends in their short-term momentum (over four
weeks). - European Focus List update:
Removals: ASML (ASML.NL; ASML:NA), Beneteau (CHBE.FR; BEN:FP),Sanlorenzo (SANL.IT; SL:IM), and
Airbus (AIRS.FR; AIR:FP).
New additions last week: Solaria (SEM.ES; SLR:SM), Salmar (SALM.NO; SALM:NO), and Ipsos (IPS.FR;
IPS:FP).
Won Europe Today
On Friday,
- European markets made moderate gains as investors continue to assess the Ukraine situation alongside the effect
of hawkish monetary policy announcement from the ECB and the Fed. Fighting in Kyiv has continued to escalate
despite increased diplomatic talks. Effects of financial sanctions on Russia would be clearly demonstrated during
its upcoming scheduled sovereign bond payment. Oil prices continued to decline as hopes of a ceasefire continue
to rise in Ukraine, along with the expectations of Fed raising interest rates by a quarter percentage point at the end
of its two-day meeting on March 16, making oil and other commodities more expensive for foreign currency
holders. Additional constraint on inflation has been placed with the ECB announcing an end to its bond-buying
program by Q3 2022, sooner than previously planned. We recommend that investors be cautious while adding
positions on stocks with a rising RS Rating and book profits in names which are undergoing technical deterioration. - The Stoxx 600 gained 95bps. It is trading below its key moving averages and 13% off highs. Travel, Financial
Services, and Construction stocks gained 3.5%, 2.0%, and 1.9%, respectively, while Utility stocks remained flat. - Among other major indices, France’s CAC and Germany’s DAX are trading below their 200-DMA and key moving
averages. The U.K.’s FTSE 100 regained its 200-DMA support level after gaining 0.8%. - Among the 17 indices we track in Europe, all except Norway, which is heavily weighted by oil companies, closed in
the green. With Belgium, France, Germany, Ireland, the Netherlands, Sweden, and Switzerland moved to a Rally
Attempt and Finland shifted to a Confirmed Uptrend, 13 indices are in a Rally Attempt, two in an Uptrend Under
Pressure, and two in a Confirmed Uptrend. As no indices recorded a distribution day yesterday, the average
distribution day count stands at 3.0. - Actionable names in the Focus List include Aker Bp (AKEP.NO; AKRBP:NO), Ipsos (IPS.FR; IPS:FP), Salmar
(SALM.NO; SALM:NO), and Solaria Energia (SEM.ES; SLR:SM).
Won Global View
The U.S. market remains in a Rally Attempt. The S&P 500 and Nasdaq were unable to rally above 10-DMA resistance (S&P 500: 4,274; Nasdaq: 13,202), reversing from that level again Friday. Despite poor technical action, both indices are still holding above the February 24 low (S&P 500: 4,114; Nasdaq: 12,587), keeping the attempted rally alive. Today will mark Day 13 of the Rally Attempt, with a follow through day still needed to upgrade the market status. An undercut of these lows will shift the market status back to a Downtrend.
