Consumer Staples (XLP): The index continues to trade along its rising 21-DMA. It broke above $75.05 price level and is sitting 3%
below pivot. Immediate resistance is at $76. A decisive break above $77.8 should be bullish for the sector. However, it continues to lag
the broader market, with the RS line remaining in a downtrend with weak technical ratings.
Author: Deepashree MC
Won Europe Today
Yesterday,
- European markets had a positive session. Volumes were generally high. Most major indices traded constructively.
However, they look extended here and are due for a short-term pullback. We recommend that investors add risk in
stocks that are coming out of proper bases. - The Stoxx 600 found support at its 10-DMA. Among other major indices, France’s CAC 40 and Germany’s DAX 30
were trading constructively along their respective 10-DMA. The U.K.’s FTSE 100 was facing resistance at its
crucial price level of 7,700. - Among sectors, Automobile, Oil & Gas, and Banks gained 1% each. Technology and defensive sectors such as
Food & Beverage and Health Care lagged. Construction stocks gained 0.5%. - Among the 16 indices that we track, Denmark, Portugal, and Switzerland closed in the red. Denmark and
Switzerland recorded their sixth and fifth distribution day, respectively. - Actionable names in the Focus List include Adidas (Xet) (ADSX.DE; ADS:GR), Flutter Entertainment (FLTR.GB;
FLTR:LN), Technogym (TGYM.IT; TGYM:IM), Sage Group (SGE.GB; SGE:LN), Universal Music Group (UNMG.NL;
UMG:NA), Wise (WISE.GB; WISE:LN), and Straumann Holdings (STMN.CH; STMN:SW).
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq reversed to the upside, gaining ~60bps and ~40bps,
respectively. The indices bounced off support at their respective 10-DMA (5,141) and 21-DMA (16,021). The distribution day count on the
indices remains elevated at five and eight, respectively.
European Weekly Summary
Key points (please refer to the report attached):
- European markets ended the week in the green for the eighth consecutive week. Earnings season and expectations of rate cuts are driving market sentiments. The Stoxx 600 held on to its 10-DMA throughout the week. In the near term, the index could take a pause and pull back to its 21-DMA. We recommend taking gains in extended names and adding risk in stocks that are part of leading industry groups and are breaking out of proper bases with a strong and rising RS line.
- Sectors were mixed with Retail and Energy leading the gains while Technology and Health Care led the decline. On our rotation graph, Cyclicals, Retail, Financial, and Basic Materials have been showing strong improvement in their short-term momentum. Technology, which is in the best quadrant, has shown a decline in its short-term momentum. Capital equipment is also in the best quadrant while its short-term momentum has been flat. Energy, Utility, Transportation, and Consumer Staples have shown a decline in their short-term momentum.
- Sector Score Cards – Stocks of Interest (Top-rated names with best technical setups – refer pages 9–21):
- European Focus List Update:
- Actionable names include Moncler (MONC.IT; MONC IM), Sage Group (SGE.GB; SGE LN), IMCD Group (IMCD.NL; IMCD NA), Technogym (TGYM.IT, TGYM IG), Flutter Entertainment (FLTR.GB; FLTR LN), Straumann Hldg. (STMN.CH; STMN SW), Universal Music Group (UNMG.NL; UMG NA), Banco Bpm (BP.IT; BAMI IM), Wise (WISE.GB; WISE LN).
- Addition: Moncler (MONC.IT), IMCD Group (IMCD.NL)
- Removal: Brunello Cucinelli (BC.IT).
Won Europe Today
We released our European Weekly Summary. Click here to access the report. Key points from it include:
- European markets ended the week in the green for the eighth consecutive week. Earnings season and expectations of rate cuts are driving market sentiments. The Stoxx 600 held on to its 10-DMA throughout the week. In the near term, the index could take a pause and pull back to its 21-DMA.
- Sectors were mixed with Retail and Energy leading the gains while Technology and Health Care led the decline. On our rotation graph, Cyclicals, Retail, Financial, and Basic Materials have been showing strong improvement in their short-term momentum.
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq gained ~60bps and ~80bps, respectively, albeit closing
near the lows of the day. The S&P 500 closed slightly above support at its 10-DMA (5,132), while the Nasdaq is sitting at its 10-DMA
(16,091). Both indices have immediate support at their respective 21-DMA (5,094/16,006). The distribution day count on the indices is
elevated at six and nine, respectively. However, one will expire on each index after close today.
Won Europe Today
On Friday,
- European markets had a weak-to-flat session. Volumes were high. Most of the leading indices look extended from
their moving averages and are due for a slight pullback. We recommend that investors add risk in names that are
coming out of proper bases in leading industry groups. - The Stoxx 600 recorded its fourth distribution day. It continued to trade above its rising 10-DMA. Among other major
indices, France’s CAC 40 and Germany’s DAX 30 formed negative reversals on high volume. Both the indices were
trading above their respective 10-DMA. The U.K.’s FTSE 100 was testing support at its December 2023 highs. It
also recorded a distribution day. - Among sectors, Real Estate was down 2%. Health Care and Technology declined more than 1%, while Banks and
Autos gained more than 1%. - Nine of the 16 indices that we track closed in positive territory. The Stoxx 600, Denmark, the Netherlands,
Switzerland, and the U.K. recorded a distribution day each. - Actionable names in the Focus List include Adidas (Xet) (ADSX.DE; ADS:GR), Flutter Entertainment (FLTR.GB;
FLTR:LN), Technogym (TGYM.IT; TGYM:IM), Sage Group (SGE.GB; SGE:LN), Universal Music Group (UNMG.NL;
UMG:NA), Wise (WISE.GB; WISE:LN), and Straumann Holdings (STMN.CH; STMN:SW).
Won Global View
The U.S. market remains in a Confirmed Uptrend. Last week, the S&P 500 fell 0.1%, while the Nasdaq lost 0.7%, with both indices
closing at the lows of the week. The S&P 500 is testing support at its 21-DMA (5,089). The Nasdaq is slightly below its 21-DMA (15,997),
leaving next support 2% below, at its 50-DMA (15,618). It has not been below the 50-DMA since early November 2023. The distribution
day count on the indices is elevated at six and nine, respectively. However, three will expire on each index over the next six trading days.
Won Europe Today
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. Stocks in Europe include Nestle (NESN.CH; NESN:SW).
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq declined ~30bps on higher d/d volume, registering their
fifth and eighth distribution day, respectively. The indices are sitting right at their 10-DMA (5,130/16,114), with immediate support 1%
below, at their 21-DMA (5,086/15,999).
