The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq held above their respective 50-DMA (S&P 500: 3,408; Nasdaq: 11,305) following a low volume pullback to that level last week. That moving average remains near-term support, while resistance remains 3,550 on the S&P 500 and 11,965 on the Nasdaq. The distribution day count stands at six and three, respectively, with one day expiring on each this week.
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Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq held support just above their respective 50-DMA (S&P 500: 3,406; Nasdaq: 11,295) before closing positive on the session. Each index lost one distribution day, taking the count to six and three, respectively, with one additional day expiring on both next week.
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 Yara International (YARA.NO; YAR:NO), Getinge (GIND.SE; GETIB:SS), and Deutsche Telekom (DTEX.DE; DTE:GR).
Tractor Supply Company
O’Neil Methodology
• The stock was down 8% yesterday and breached its 50- and 100-DMA
due to soft long-term financial targets. Next support is at the low of a
recent base ($136), followed by the 200-DMA, 16% away.
• Very strong fundamental ratings: EPS Rank 96, Composite Rating 97,
SMR Rating A. Over the past five years, sales have grown at mid-singledigit rates (8%), operating margins have been stable (~10%), and ROE
has improved to 36%.
• Technical ratings will remain under pressure in the short term as the
stock declined. RS Rating of 82, Up/Down Volume ratio of 0.8, and A/D
Rating of C. Number of funds holding the stock has increased 34% in the
last two years to 1,658 as of September.
Pool Corp
O’Neil Methodology
• The stock is trading 2% from the pivot after breaking out of a stage-two
cup base with the 21-DMA ($340, ~3% away) as immediate support.
• Good technical profile with consistent price-outperformance: RS Rating
of 91, A/D Rating of B-, and Up/Down Volume Ratio of 2.5, indicating
ongoing positive accumulation.
• Top-notch fundamental ratings: Composite Rating 99, SMR Rating A,
EPS Rank at 98. Institutional sponsorship has increased 32% y/y in
September.
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq pulled back and closed near session lows, however, the S&P 500 added a distribution day due to rising volume. The distribution day count increased to seven days on the S&P 500 but fell to four on the Nasdaq due to expiration. Both indices lose a distribution day after the close.
Won Europe Today
Yesterday,
- All European markets closed lower. Markets ended in the red for third straight session with the Stoxx 600 losing another 129bps. It has already lost 180bps this week.
- The U.K.’s FTSE 100 lost 191bps, recording the biggest drop in a month. The Basic Resource heavy FTSE was hit as the possibility of a second lockdown increased. Germany’s DAX and France’s CAC 40 lost 141bps and 153bps, respectively.
- We downgraded the U.K. and Switzerland to a Downtrend as they breached all support levels. We also downgraded Belgium to an Uptrend Under Pressure as it breached its 200‐DMA with heavy distribution.
- Actionable names in the Focus List include Ashtead Group (AHT.GB;AHT:LN), Experian (EXPN.GB;EXPN:LN), B&M (BME.GB; BME:LN), Spirax‐Sarco (SPX.GB; SPX:LN), Halma (HLMA.GB; HLMA:LN ), Novo Nordisk ‘B’ (NON.DK; NOVOB:DC), Lonza Group (LONN.CH; LONN:SW), and Trigano (TRI.FR; TRI:FP).
Chipotle Mexican Grll
O’Neil Methodology
• The stock is making the right side of a stage-two cup base and is
currently trading 1% below the pivot ($1,384.5). It is trading
constructively above its rising 50-DMA.
• Fundamentals are strong on the back of 13% sales CAGR and improved
margins and ROE in the last three years. Composite Rating of 78 and
SMR Rating of B. EPS Rank of 42 is weak due to EPS decline in the last
two quarters because of COVID-19-related cost pressure.
• Mediocre technical profile, with flat RS line, indicating in-line
performance with the general market. RS Rating of 90, Up/Down
Volume ratio of 1, and A/D Rating of B-. Number of funds holding the
stock has increased 4.6% y/y to 1,552 as of September.
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq held support at their respective 21-DMA but closed in the lower half of the session. Both continue to consolidate sharp gains from early October. Distribution stands at six and five days, respectively, with one expiring on the S&P 500 and two on the Nasdaq this week
Won Europe Today
Yesterday,
- European markets closed mixed with the Stoxx 600 closing 35bps lower. Chemicals lost ~90bps to lead the losses.
- Among major markets, Germany’s DAX closed 92bps lower, France’s CAC 40 was flat, while the U.K.’s FTSE 100 was up 8bps.
- Ireland, Sweden, Austria, Italy, Spain, and Luxembourg were the other countries that closed in positive.
- We upgraded Switzerland to a Rally Attempt after it kept above its previous lows for three consecutive days.
