What’s happened? U.S. Focus List constituent BABA (+50% since
addition) is currently trading in the pivot range and is actionable. Based
on our time-tested methodology, we recommend accumulating here. The
stock is extended from an ideal entry point above $314.
Why has the stock gaped up? The move follows a well-received
Investor Event, held virtually in late September. The company made
encouraging comments around innovation, TAM expansion and synergies
across its various businesses. BABA also said it would a sharpen its
focus on structural growth opportunities in China.
Author: admin
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq gapped up on strength across large cap tech. Both indices are less than 2% off all-time highs. A distribution day expired on the S&P500, and the count currently stands at six, with five days on the Nasdaq. Another distribution day will expire on each index at the close tomorrow.
Won Europe Today
Yesterday,
- European markets continued their positive momentum, on lower volume, on hopes of a stimulus in the U.S. and signs of recovery in China. Finland, Switzerland, and Portugal were upgraded to a Confirmed Uptrend after the first two recorded new highs and the latter had a follow‐through day. The U.K., Norway, and Belgium were the only markets to end in the red.
- The Stoxx 600 gained 0.72% on lower volume. Auto, Utility, and Technology stocks led the index higher, gaining more than 100bps while sectors like Banks, Travel & Leisure, and Oil & Gas ended in negative territory. The index is in a Rally Attempt and is awaiting a follow‐through day.
- Among other major bourses, France’s CAC and Germany’s DAX were up more than 0.65%. Gains in DAX were led by stocks like Infineon Technologies and Daimler. The U.K.’s FTSE is underperforming because of the fall in oil and mining stocks. The government announced that further restrictions will be imposed in some parts of the country, thereby causing declines in leisure and retail stocks.
- Actionable names in the Focus List include Straumann Holdings (STMN.CH;STMN:SW), Ashtead Group (AHT.GB;AHT:LN), Experian (EXPN.GB;EXPN:LN), Swedish Match (SWMA.SE;SWMA.SS), B&M (BME.GB; BME:LN), Softwareone Holding (SWON.CH; SWON: SW), Spirax‐Sarco (SPX.GB; SPX:LN), and Nordic Semiconductor (NOD.NO; NOD:NO).
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq are building the right side of consolidation after breaking above short-term resistance (S&P 500: 3,430, Nasdaq: 11,400). The distribution day count remains elevated at seven and five, however, two days will expire on the S&P 500 and one on the Nasdaq later this week.
Won Europe Today
Friday,
- European markets gained for the second consecutive day as President Donald Trump revived hopes of a stimulus deal.
- The Stoxx 600 rose 0.55% on lower volume, with Basic Resources (+1.33%) and Travel & Leisure (+1.58%) leading the gains. Autos and Bank stocks dragged the index down, with declines of more than 1.00% and 0.87%, respectively. The index is in a Rally Attempt and awaiting a follow‐through day.
- Among other major indices, Germany’s DAX underperformed, gaining 0.07% on lower volume, while France’s CAC and the U.K.’s FTSE gained more than 0.60% each. DAX and FTSE are in an Uptrend Under Pressure, and CAC is in a Rally Attempt.
- Five out of 17 indices ended in negative territory, Norway was the only market to record a distribution day.
- Actionable names in the Focus List include Straumann Holdings (STMN.CH;STMN:SW), Ashtead Group (AHT.GB;AHT:LN), Experian (EXPN.GB;EXPN:LN), Swedish Match (SWMA.SE;SWMA.SS), B&M (BME.GB; BME:LN), Softwareone Holding (SWON.CH; SWON: SW), and Spirax‐Sarco (SPX.GB; SPX:LN), Nordic Semiconductor (NOD.NO; NOD:NO).
DOMINOS
O’Neil Methodology
• The stock declined 7% yesterday on 6x average volume after the
company’s Q3 results missed consensus on most of the key
metrics. It breached its 21- and 50-DMA and is currently trading
2% above its 100-DMA.
• Robust fundamental ratings: EPS Rank of 99, Composite Rating of
92, and a five-year earnings stability rank of 4. Sales have had a
CAGR of 10% since 2009, driven by store rollout and same-storesales growth, while operating margins have expanded more than
1,000bps to 38.8%. Long-term growth drivers are SSSG and store
rollout.
• Technical ratings have deteriorated due to yesterday’s decline: RS
Rating of 80, A/D Rating of D+, and Up/Down Volume ratio of
1.2. The number of funds invested in the stock has also more than
doubled over the last three years
Lululemon
Key points from this report:
- U.S. Focus List constituent LULU appears to be on the verge of retaking its 50-DMA ($339.30).
- This would represent a positive technical signal and an alternative (albeit riskier) opportunity to accumulate.
- We remain bullish on LULU’s long-term prospects: it’s exposed to the structural athleisure trend, generates lucrative margins, and growth opportunities abound in Europe and Asia.
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 {Bureau Veritas (BVI.FR; BVI:FP); Muenchener Ruck (MUV2X.DE; MUV2:GR); Elisa (ELIS.FI; ELISA:FH)}
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq cleared above near-term resistance at ~3,430 and ~11,400, respectively. Both continue to steadily build the right side of consolidation, while holding above 50-DMA support. The distribution day count now stands at seven and five days, respectively, with two days expiring on the S&P 500 and one on the Nasdaq next week.
Costco
Key points from the report:
- COST is on the verge of breaking out of a stage-one base. It is actionable above $363.67, extended from an ideal entry point above $381.85.
- The breakout follows a stellar September sales print. Comp sales growth accelerated to +17% from +14.5% in August, with all major categories exhibiting growth.
- As a bellwether discount retailer playing into a structural theme, we remain bullish on COST’s near-term prospects. Accumulate.
