Australia’s ASX All Ordinaries Index declined 1.1% this week. The index remains in an Uptrend Under Pressure despite breaching support along its 50-DMA. It has six distribution days after adding one this week. Two distribution days will expire next week.
Author: Midhun Parameswaran
Global Focus Emerging
The CSI 300 gained 0.56% on lower and below average volume and remains in an Uptrend Under Pressure with four distribution days. The index traded around its converging 21- and 50-DMA (~4,900, -1.2%) for the week. Resistance remains at previous highs near 5,000 (+0.8%) and next support is at July 28’s low (~4,664, -6.0%).
Global Focus Frontier
Ho Chi Minh City Development Joint Stock Commercial Bank (HD Bank) is one of the top banks in Vietnam and is a constituent of the VN30 Index. Its industry-leading growth and key financial ratios, along with its exposure to the consumer finance industry, will drive its growth.
China A Shares
The CSI 300 gained 0.56% on lower and below average volume and remains in an Uptrend Under Pressure with four distribution days. The index traded around its converging 21- and 50-DMA (~4,900, -1.2%) for the week. Resistance remains at previous highs near 5,000 (+0.8%) and next support is at July 28’s low (~4,664, -6.0%). China’s economy continued to slow, with Q3 GDP growth falling to 4.9% y/y (consensus 5.32%, previous 7.9%). September fixed asset investment (+7.3% y/y) and industrial output (+3.1% y/y) came in below consensus, though retail sales (+4.4% y/y) slightly beat expectations. Phosphorus chemical-related companies led the gains, boosted by Tesla’s decision to switch to lithium-iron-phosphate batteries. Coal mining stocks led losses on continuing pressure from price regulation. Steel and non-ferrous were also dragged down. Tourism stocks underperformed on sporadic outbreaks of domestic COVID cases. The market was trading sideways with daily turnover of around RMB 1T. Q3 earnings brought more volatility and sector rotation. We will remain patient until the CSI 300 breaks above key resistance at ~5,000 with good volume. Investors should stay disciplined and selective. Avoid chasing highs and focus on quality stocks with solid fundamentals and improving/constructive technical profiles.
US Focus
The U.S. market is in a Confirmed Uptrend. The S&P 500 made a new all-time high Thursday showing instant progress after regaining its 50-DMA last week. The Nasdaq also continued its push higher earlier in the week before pulling back Friday to close ~2% off all-time high resistance of 15,403. We continue to view the 50-DMA as a key level of short-term support, though both the 10- and 21-DMA are now crossing above that level. The distribution day count stands at five each, with one day expiring on both at the end of next week.
European Focus
On Thursday, the Stoxx 600 ended 0.13% above last Friday’s close. Of the 17 indices we cover, four are in a Confirmed Uptrend, one in a Rally Attempt, and 12 in an Uptrend Under Pressure. This week, we upgraded the Netherlands to a Confirmed Uptrend after it reclaimed its rally high.
Global Focus Developed
Australia’s ASX All Ordinaries Index gained 0.7% this week. It regained its 50-DMA and is currently trading 2% below its 52-week high. It is in an Uptrend Under Pressure with five distribution days. One distribution day will expire next week.
Global Focus Emerging
The CSI 300 gained 0.56% on lower and below average volume and remains in an Uptrend Under Pressure with four distribution days. The index traded around its converging 21- and 50-DMA (~4,900, -1.2%) for the week. Resistance remains at previous highs near 5,000 (+0.8%) and next support is at July 28’s low (~4,664, -6.0%).
Global Focus Frontier
Ho Chi Minh City Development Joint Stock Commercial Bank (HD Bank) is one of the top banks in Vietnam and is a constituent of the VN30 Index. Its industry-leading growth and key financial ratios, along with its exposure to the consumer finance industry, will drive its growth.
China A Shares
The CSI 300 ended flat with a modest gain of 0.04% on below average volume. The market remains in an Uptrend Under Pressure with five distribution days. The index was consolidating around its 21- (~4,901, -0.6%) and 50-DMA (~4,899, -0.7%) with resistance at previous highs of ~5,000 (+1.4%) and support at July 28’s low (~4,664, -5.4%). Investors saw historically high factory gate inflation (PPI +10.7% y/y, consensus 10.2%), robust trade growth (export in U.S. dollars +28.1%, consensus 21.5%), and weak credit increase (total social financing of RMB 2.9T, consensus RMB 3.05T) in September. The slowing economy fueled expectations of monetary policy support, yet stagflation concerns sparked worries of less leeway for more easing. Auto, energy storage, solar, and semiconductors led the gains while food and beverage, health care, and education pulled back following the early-week rally. Agricultural and cyclical stocks led the losses and coal mining stocks rallied after retreating early in the week. Q3 earnings brought more volatility and rotation. Sentiment was relatively cautious with below average trading volume. We recommend a disciplined and selective approach for investors. Focus on quality stocks with solid fundamentals and improving or constructive technical profiles.
