Author: Gaghan

Won Global View

Posted on by Gaghan

The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq rallied strongly last week and are now approaching levels of potential resistance. The S&P 500 is now sitting just below its upper channel line, a level the index has respected since breaking out last November. The Nasdaq, after regaining its 50-DMA, is now on the right side of an eight-week consolidation and approaching resistance near all-time highs of 14,175. The 10- and 21-DMA (S&P 500: 3,994; Nasdaq: 13,439) are now sharply rising and could act as potential near-term support should a pullback occur. Distribution is now a non-factor, with the count over five weeks standing at two and three, respectively. There will be no further expiration for two weeks.

All sectors except Energy closed positive last week, led by Retail and Technology, which rallied ~4% each. Both sectors are now outperforming by a wide margin over the last month, gaining ~7% each. Meanwhile, long-term leading sectors, Capital Equipment, Financial, and Transportation, remain within 1% of a new high. Health Care remains the only sector trading below its 50-DMA, albeit by less than 1%. The best performing industry groups over the past week include Internet, Computer-Integrated Sys, Payment Processors, Media Software, Desktop Software, Data Storage, Apparel, Leisure, Home Builders, Building Products, Aggregates, Furniture, Specialty Retail, Restaurants, and Beverages. Breadth is very strong. 90% of S&P 500 stocks are trading above their respective 50-DMA, and 94% are trading above their respective 200-DMA, compared with 86% and 93%, respectively, one week ago. Among the Nasdaq 100, 74% of stocks are now trading above their respective 50-DMA, improving from just 65% one week ago.

Won Europe Today

Posted on by Gaghan
  • European markets closed higher led by strong economic data and as investors reacted positively to Fed’s meeting minutes, which indicated that accommodative policy will stay in place. However, increasing COVID‐19 cases and slow vaccine rollout in several places limited market gains. Markets are a bit extended but we are open to adding strong names coming out of proper bases with good volume.
  • The Stoxx 600 gained 0.58% on higher volume and hit an all‐time high. Most sectors closed positive. Food and Beverage stocks were the top performers, climbing 1.6%.
  • Major indices like Germany’s DAX and France’s CAC closed in the green on higher volume. The U.K.’s FTSE 100 continued its rally and was shifted to a Confirmed Uptrend after it reclaimed its prior high.

Won Global View

Posted on by Gaghan

The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq continued to press higher yesterday, with both now moving closer to potential resistance. The S&P 500 faces resistance along its upper channel line, which is rising into ~4,130, while the Nasdaq faces resistance at or near all-time highs (14,175). Support remains the rising 10- and 21-DMA (S&P 500: 3,980; Nasdaq: 13,393).

The distribution day count declined again, now totaling just two and three, respectively, over five weeks, with no further expiration for two weeks. Technology led all sectors yesterday, rising ~1% and now trading within 2% of an all-time high. All other sectors traded relatively flat.
Health Care remains the only sector below its 50-DMA, albeit by less than 1%. The best performing industry groups over the past week include Internet, Data Storage, Semiconductors, Software, Payment Processors, Beverages, Apparel, Miners, and Restaurants. The worst performing groups include Solar, Alternative Energy, Machinery Automation, Oil & Gas, Media, Biotech, Generic Drugs, and Steel.

Won Europe Today

Posted on by Gaghan

Yesterday,

  • European markets closed in the red as investors turned cautious due to rising COVID‐19 cases globally and slow vaccine rollout in some parts of the region. Markets are a bit extended from their moving averages and we expect them to pullback or consolidate. But we are open to adding strong names coming out of proper bases with good volume.
  • The Stoxx 600 ended 0.2% lower on low volume after closing at an all‐time high the previous day. Among sectors, Health Care lost 0.9%, while Insurance stocks gained 0.6%. Major indices like Germany’s DAX and France’s CACclosed in negative territory on lower volume and remain in a Confirmed
  • Uptrend. The U.K.’s FTSE 100 advanced and continues to move higher along its key moving averages.
    The majority of 17 indices that we track closed in the red, barring the U.K., Finland, Portugal, and Luxembourg. Ireland recorded a distribution day, taking the total count to five. The average distribution day count stands at 4.31.
  • Actionable names in the Focus List include Interpump Group (IP.IT; IP:IM), Schneider Electric (QT@F.FR; SU:FP), Trigano(TRI.FR; TRI:FP), Straumann Holding (STMN.CH; STMN:SW), Eurofins Scientific (EUF.FR; ERF:FP), and Teleperformance (ROFR.FR; TEP:FP).

Won Global View

Posted on by Gaghan

The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq continue to consolidate Monday’s gains, trading relatively flat in lower volume for a second straight session. The 10- and 21-DMA (S&P 500: 3,969; Nasdaq: 13,350) have begun to curl back up and may act as initial support on any pullback. The distribution day count continues to decline, now totaling three and four over five weeks, respectively, with another day set to expire on both indices today.

Nine of 11 sectors traded relatively flat yesterday, while Consumer Cyclical and Basic Material declined ~1% each. All sectors outside of Health Care remain above their respective 50-DMA. The best performing industry groups over the past week include Internet, Semiconductors, Data Storage, Gaming Software, Desktop Software, Payment Processors, Building Products, Leisure, Staffing, and Restaurants. The worst performing groups include Solar, Alternative Energy, Machinery Automation, Media, Generic Drugs, Biotech, andSteel.

O’Neil Capital Equipment Sector Weekly

Posted on by Gaghan

The best performing industry group (IG) in the past week was Comml-Svcs-Staffing. It gained 6% in the past five trading sessions and is up almost 25% year-to-date. This movement is inline with the improving market conditions as the unemployment rate in the U.S. dropped to 6.0% in March from 6.2% in February. Top stocks in the IG, ASGN Incorporated (ASGN), Kforce (KFRC), Korn Ferry (KFY), and Headhunter Group (HHR) are all trading close to 52-week highs and have strong technical and fundamental ratings.

O’Neil Capital Equipment Sector Weekly

Posted on by Gaghan

Greatech Technology ( GRET.MY ): Announced Q4 FY20 results after market close on Friday. Sales and EPS grew 30% and 78%, y/y, respectively. The stock breached its 21-DMA and next level of support is at its 50-DMA ( -12% from current pric e).

Trex Company Inc ( TREX ): Reported Q4 FY20 results on February 22 after market close. Revenue and EPS beat consensus estimates by 5% and 3%, respectively. The stock was down 9% and breached its 50-DMA post results. Next support level is at its 100-DMA ( -9% ) and investors can add to positions if stock retakes its 50-DMA on strong volumes.

Tomra Systems ( TOM.NO ): Reported Q4 FY20 results on February 23 before market open. Revenue ( 7% y/y ) and EPS ( 18% y/y ) beat estimates by 3% and 12%, respectively. The stock breached support along its 200-DMA on above average volume post results. Next support is expected at NOK360.80 ( -3% from current pric e)

U.S. Economic Summary

Posted on by Gaghan

Q4 GDP expanded 4%:
The U.S. economy grew at an annualized 4% in Q4, according to the advance estimate, in line with consensus.
Growth was much slower than the 33.4% growth in Q3 as the continued rise in COVID-19 cases and restrictions on
activity moderated consumer spending. Both business and housing investment remained robust and exports grew at
a double-digit pace while personal consumption slowed and public expenditure edged down. For the full-year 2020,
GDP contracted 3.5%, 10bps better than consensus. The Fed sees the U.S. real GDP to grow 4.2% in 2021.

O’Neil Capital Equipment Sector Weekly

Posted on by Gaghan

Greatech Technology ( GRET.MY; GREATEC MK ) – $1.5B market cap; $3.5M ADV

We added Greatech Technology to our Emerging Markets Focus List as the stock is breaking out of a stage-two flat base. The company manufactures automated systems for the solar sector. Its production line equipment is a combination of single-function automated systems and units that can do multiple tasks. High precision systems are essential for solar PV manufacturing due to the delicate nature of the semiconductor wafers pre-framing.
The company generates around 94% of its revenue from international markets and benefits from U.S. dollar appreciation. It had a gross profit margin of 33.7% in FY19, up from 20.6% in FY18. It expanded into medical and energy storage solutions in FY19. It currently manufactures and automates production systems for surgical instrumentation and handling systems for battery cells. The company plans to increase its production capacity. It also plans to lower its operating costs further to protect margins. Strong order flow from First Solar and the revenue shift towards production line systems has helped revenue growth over he past few years. However, two clients accounting for over 90% of revenue, remains a key risk for the company.

O’Neil Capital Equipment Sector Weekly

Posted on by Gaghan

Anhui Conch Cement (ANH.HK; 914 HK) – $8B market cap; $47M ADV: We removed Anhui Conch Cement from the Developed Markets Focus List due to technical deterioration as the stock is under heavy selling pressure and facing consistent resistance at the 200-DMA. The demand is likely to remain robust overall before the Spring Festival. We remain positive on Anhui Conch as a leader, which benefits from the increasingly recovering cement market. We may revisit it in the future if it forms a new pattern.