Author: Deepashree MC

Won Europe Today

Posted on by Deepashree MC

Yesterday,

  • European markets plunged 153bps, breaking the 50-DMA support on high volume as the conflict in the Middle East
    and economic data from China weighed on investor sentiments. The next key support level is at ~488 which
    coincides with its 100-DMA (2% downside risk), followed by the 200-DMA (6% downside risk). The index has been
    shifted to a Downtrend.
  • While China’s GDP growth rate of 5.3% exceeded expectations of 4.6%, the growth was primarily driven by the first
    two months, as industrial production and retail sales decelerated in March. The housing market continues to remain
    a laggard and hence investors are not convinced that China, a key market for most European companies, is on a
    clear path to recovery.
  • The decline in market breadth has accelerated, raising the likelihood of a more prolonged and significant pullback.
    The number of stocks breaking out in the region is decreasing rapidly. In addition, several technical indicators, such
    as the 12-week new high/new low ratio (T2121), indicate a more extended and deeper pullback.
  • Therefore, the Value side of the market is leading the Growth area. From our rotation chart, momentum continues
    to increase among Energy, Basic Materials, and Utility, while deteriorating among Cyclicals and Technology. Small
    caps are underperforming large caps.
  • All of the 16 indices we track in Europe closed in the red with Austria recording its second distribution day, thus
    bringing the average count in Europe to 3.8. Eight markets are in an Uptrend Under Pressure, four in a Downtrend
    (including France, Switzerland, and Denmark), and two in a Rally Attempt. Norway and Belgium are the only two
    countries in a Confirmed Uptrend.
  • Actionable names in the Focus List are Adidas (ADSX.DE; ADS:GR), Alfa Laval (ALF.SE; ALFA:SS), Partners
    Group (PGHN.CH; PGHN:SW), Trigano (TRI.FR; TRI:FP), and Universal Music Group (UNMG.NL; UMG:NA).

Won Global View

Posted on by Deepashree MC

The U.S. market is in a Downtrend. The S&P 500 and Nasdaq declined 21bps and 12bps, respectively. Both indices are trading below
their 50-DMA, with the next level of support near the rising 100-DMA (4,921/15,451). We would like the indices to hold above yesterday’s
low for three sessions and then look for a follow-through day or for indices to move back into new highs before upgrading back to a
Confirmed Uptrend.

Won Europe Today

Posted on by Deepashree MC

We released our European Weekly Summary yesterday. Click here to access the report. Key points from it include:

  • European markets pulled back below their short-term moving averages last week, amid increased volatility following tension in the Middle East. The Stoxx 600 and other major indices are trading below their 21-/50-DMA withan elevated distribution day count.
  • Short-term momentum continues to improve among Basic Material, Financial, Energy, Retail, Transportation, and Utility. Technology, Health Care, and Consumer Staple have shown a further decline in their short-term momentum. Consumer Cyclical, which is in the leading quadrant, exhibited deterioration in its short-term momentum.

Won Global View

Posted on by Deepashree MC

The U.S. market status has been downgraded to a Downtrend. The S&P 500 and Nasdaq declined 1.2–1.8% yesterday on heavy
volume and breached support at their 50-DMA. Indices have the next level of support near the rising 100-DMA (4,916/15,434). We will be
looking for either a new follow-through day or for indices to move back into new highs before upgrading back to a Confirmed Uptrend. A
follow-through day (a gain of 1.7% or more on higher volume) can occur as early as Friday.

Won Europe Today

Posted on by Deepashree MC

On Friday,

  • European markets closed 14bps higher, ending a choppy trading week. The Stoxx 600 was consolidating between its Thursday’s low of 502 and 510, allowing its 50-DMA (1.1% below) to catch up. Investors remain cautious of sticky inflation in the U.S. However, there remains optimism that the European central bank could cut interest rates before the Fed, with first cuts estimated in June. The divergence from the Fed, which is expected to deliver its first cuts only by September, could lead to a weaker euro, promoting European exports. Overall, we recommend that investors remain cautious. Book profits in extended names as there are signs that markets are likely to pull back/consolidate here in the near term.
  • Sectoral performance was mixed. Oil and Gas (+253bps) led the rally as tensions rose in the Middle East, followed closely by Mining (+241bps) and Utility (196bps). Autos (-139bps), Travel and Leisure (-116bps), and Technology (-109bps) were the major decliners. The European Oil and Gas index is breaking out into new highs due to strong performance of top holdings – Shell (RDSA.NL; SHELL:NA), Total Energies (TTE.GB; FPF:PZ), and BP (BP.GB; BP/:LN). Majority of the remaining European sectoral indices have pulled back from their highs andwere testing support at their near-term moving averages (21- or 50-DMA). The Mining index was trading above all its key moving averages. Telecom and Food and Beverage stocks are laggards, trading near their support levels.
  • Six of the 16 indices we track closed in the red. Ireland was shifted to an Uptrend Under Pressure as the index breached its 21-DMA support. Among the three major indices, only the U.K.’s FTSE 100 had a positive day. The index gained 91bps intraday and tested its all-time high before pulling back. France’s CAC 40 and Germany’s DAX 30 declined 16bps and 28bps, respectively. The CAC faced resistance at its declining 10-DMA (1.1% higher), while the DAX pulled back from its 21-DMA (1.3% higher).
  • Actionable names in the Focus List are Alfa Laval (ALF.SE; ALFA:SS), Partners Group (PGHN.CH; PGHN:SW), Straumann Holdings (STMN.CH; STMN:SW), TBC Bank Group (TBCG.GB; TBCG:LN), Trainline (TRN.GB; TRN:LN), Trigano (TRI.FR; TRI:FP), and Universal Music Group (UNMG.NL; UMG:NA).

Won Global View

Posted on by Deepashree MC

The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq rallied 74bps and 168bps, respectively, and
retraced Wednesday’s losses. Both indices closed above their short-term moving averages. Support for the indices is at the 21-DMA
(5,183/16,238), followed by the rising 50-DMA (5,105/16,041). The distribution day count stands at six and seven, respectively, with one
expiring on the Nasdaq after the close today.

Won Europe Today

Posted on by Deepashree MC

We released our Weekly Global Laggards Report today. 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. No European stocks were mentioned in this week’s laggards

Won Global View

Posted on by Deepashree MC

The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq were down 95bps and 84bps, respectively, after
hotter-than-expected CPI print. Both recorded a distribution day and closed below their respective 21-DMA. Next support is at the rising
50-DMA (5,100/16,022). The distribution day count stands at six and seven, respectively, with one expiring on the Nasdaq after the close
on Friday.

Won Europe Today

Posted on by Deepashree MC

Yesterday,

  • Most European markets had a positive session. Except the U.K.’s FTSE, major indices were below their rising
    short-term moving averages. Austria, Spain, and Belgium recorded a distribution day each, while Italy breached its
    21-DMA support. Overall, we recommend that investors remain cautious. Book profits in extended names as there
    are signs that markets are likely to pull back/consolidate here in the near term.
  • The Stoxx 600 (+15bps), Germany’s DAX 30 (+11bps), and France’s CAC 40 (-5bps) continued to trade below their
    respective 21-DMA. TheU.K.’s FTSE 100 (+33bps) was testing support at its 10-DMA.
  • Among sectors, Banks (+94bps), Oil & Gas (+71bps), and Chemicals (+70bps) were the major gainers. Utility
    (-125bps) and Basic Resources (-80bps) led the decline.
  • Ten of the 16 indices that we track closed in the green. Volumes were mostly high. Three indices recorded a
    distribution day each. No status changes.
  • Actionable names in the Focus List include Adidas (ADSX.DE; ADS:GR), Trainline (TRN.GB; TRN:LN), Straumann
    Holdings (STMN.CH; STMN:SW), Partners Group (PGHN.CH; PGHN:SW), Trigano (TRI.FR; TRI:FP), Alfa Laval
    (ALF.SE; ALFA:SS), Sage Group (SGE.GB; SGE:LN), and Tbc Bank Group (TBCG.GB; TBCG:LN).