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Won Europe Today

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Yesterday,

  • European markets edged higher for the third straight session as investors awaited the outcome of a tightly‐contested U.S. presidential election.
  • The Stoxx 600 jumped 2.05% and was upgraded to a Confirmed Uptrend after having a follow‐through day. On the sectoral front, Health Care stocks (+4.9%) led the gains, followed by Technology (+2.97%). All the other sectors, barring Banks, Oil & Gas, and Basic Resources, ended in the green.
  • Among other major bourses, France’s CAC outperformed (+2.44%) as Sanofi rose more than 6%. Germany’s DAX was shifted to a Confirmed Uptrend as the index gained 1.99% on higher volume. The U.K.’s FTSE surged 1.67% on higher volume and is in a Rally Attempt, awaiting a follow‐through day.
  • Belgium, Italy, Switzerland, and Norway were the other markets to be shifted to a Confirmed Uptrend. All the markets, except for Luxembourg, ended in positive territory.
  • Actionable names in our Focus List include B&M (BME.GB; BME:LN), Spirax‐Sarco (SPX.GB; SPX:LN), Halma (HLMA.GB; HLMA:LN), and Sartorius (SRT3X.DE;SRT3:GR), Ashtead Group (AHT.GB; AHT:LN), and Straumann Holding (STMN.CH; STMN:CW).

MERCADOLIBRE

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MercadoLibre hosts the largest online commerce and payments ecosystem in
Latin America. Its efforts are centered on enabling ecommerce and digital and
mobile payments on behalf of its customers by delivering a suite of technology
solutions across the complete value chain of commerce.

Won Global View

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The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq rallied for a second straight session and are now facing resistance at their respective 50-DMA (S&P 500: 3,400; Nasdaq: 11,296). September lows remain near-term support, followed by the 200-DMA. The distribution day count stands at eight and five, respectively, with one day expiring on the S&P 500 tomorrow and another on Monday.

Won Europe Today

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Yesterday,

  • European markets advanced for the second consecutive day ahead of the U.S. Presidential election. All the 17 bourses ended in positive territory.
  • The Stoxx 600 surged 2.34% on higher volume, with all the sectors in the green. Banks jumped 4.4% to lead gains, followed by Auto stocks (+3.53%). The index is in a Rally Attempt and is awaiting a follow‐through day.
  • Among other major bourses, France’s CAC, Germany’s DAX, and the U.K.’s FTSE gained more than 200bps each.
  • The U.K. is the only market to be in a Downtrend; Denmark, Ireland, Finland, and Sweden are in an Uptrend Under Pressure, with others being in a Rally Attempt.
  • Actionable names in our Focus List include B&M (BME.GB; BME:LN), Spirax‐Sarco (SPX.GB; SPX:LN), Halma (HLMA.GB; HLMA:LN), and Sartorius (SRT3X.DE;SRT3:GR), Ashtead Group (AHT.GB; AHT:LN), and Straumann Holding (STMN.CH; STMN:CW).

Won Europe Today

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Publication: we published our European Weekly Summary, click here for the report. Key points from the report:

  • The Stoxx 600 is in a Downtrend along with 11 country indices. We recommend avoiding risk and playing defense as much as possible until our time‐tested methodology moves the market back into a Confirmed Uptrend.
  • Last week’s selloff has again triggered a new sector rotation. While our Value‐Long call has dominated the market since the summer, last week’s news flow pushed investors’ focus on defensive sectors.
  • Short‐term momentum of Technology stocks has continued to deteriorate. From our Focus List, we removed Fintech/payment stocks, Nexi (NEXI.IT;NEXI:IM) and Worldline (WLN.FR;WLN:FP).
  • We recommend trimming positions in names that are extended from their 200‐DMA and with deteriorating short‐term technicals (e.g., Adevinta (ADEB.NO;ADE:NO; $10.5B market cap).

Won Global View

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The U.S. market is an Uptrend Under Pressure. The S&P 500 and Nasdaq broke below their respective 50-DMA last week and are now testing support near September lows (S&P 500: 3,209; Nasdaq: 10,519), followed by the rising 200-DMA (S&P 500: 3,129; Nasdaq: 9,833). We will likely downgrade the market to a Downtrend for the first time since the April 2 follow-through day should either index close below September lows. Should that occur, we will be looking for another follow-through day before advising an increase in risk. The distribution day count is elevated at eight and five days, respectively, with one day expiring on the S&P 500 this week.

Won Europe Today

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On Friday,

  • After a choppy trading session, European markets closed higher. The Stoxx 600 gained 0.18%, with Oil & Gas stocks, up 1.8%, leading the gains.
  • Among other major markets, France’s CAC 40 gained 0.54%, Germany’s DAX lost 0.36%, and the U.K.’s FTSE 100 lost 0.08%. Volume was lower across the market.
  • Apart from Germany and the U.K., Denmark, Norway, the Netherlands, and Luxembourg closed in the red.

Amazon

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O’Neil Methodology
• The stock was down ~2% in after-market trading despite posting beat
Q3 results as the Q4 guidance missed consensus. It is currently
trading around its 50-DMA, with next support at the 100-DMA, 4%
away.
• Very strong fundamental ratings on the back of 27% sales CAGR and
67% EPS CAGR in the last three years. EPS Rank of 93, top
Composite Rating of 99, and SMR Rating of A.
• Technical ratings have suffered due to the recent selloff. Although RS
Rating is still strong at 91, A/D Rating of D+, and Up/Down Volume
ratio of 1 (declined from 1.2 four weeks ago) indicates selling
pressure. Number of funds holding the stock has increased 20% y/y
to 5,709 as of September.

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 underweighted as they may be vulnerable to further downside risk and underperformance. European names highlighted this week include {Upm‐Kymmene (UPM.FI; UPM:FH), Lafargeholcim (LHN.CH; LHN:SW); Buzzi Unicem (BZU.IT; BZU:IM); InterContinental Hotel Group (IHG.GB; IHG:LN); Morrison Supermarket (MRW.GB; MRW:LN)}