On Thursday, the Stoxx 600 closed 1.22% above last Friday’s close. We downgraded Italy to an Uptrend Under Pressure after it breached its 50- DMA. The Netherlands and Ireland are the only indices remaining in a Confirmed Uptrend, while the rest are in an Uptrend Under Pressure.
Author: Midhun Parameswaran
Global Focus Developed
Australia’s ASX All Ordinaries Index was down 0.7% this week. The index closed slightly below its 50-DMA after breaking below the moving average during the week. On Monday, we shifted the index to an Uptrend Under Pressure from a Confirmed Uptrend. It has five distribution days. One distribution day will expire next week.
Global Focus Emerging
The CSI 300 posted a modest loss of 0.13% in the three-trading-session week. The market remains in an Uptrend Under Pressure with the distribution day count decreasing to six following one expiration. The index tested resistance at, but remains pressed by, the 21-DMA (~4,884, +0.7%). Next resistance at the 50-DMA (~4,925, +1.6%) and support is at July 28’s low (~4,664, -3.8%).
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 lost 3.14% on slightly lower but above average volume this week. The market remains in an Uptrend Under Pressure with seven distribution days. The index staged a rally Friday after losing support at its 50- (~4,941, +1.7%) and 21-DMA (~4,883, +0.5%) in a four-day losing streak. Next support lies at July 28’s low (~4,664, -4.0%). The domestic economy slowed in August following the negative impact of natural disasters and lockdown measures to control COVID in some areas. Industrial production increased 5.3% y/y (consensus 5.8%, previous 6.4%), fixed asset investment rose 8.9% y/y (consensus 9.0%, previous 10.3%), and retail sales grew 2.5% y/y (consensus 7.4%, previous 8.5%). Expectations of policy support are rising. Healthcare rebounded following centralized procurement results of artificial joints. Chemical stocks outperformed on tight supply amid recovered demand. Electricity companies’ strong performance continued and wind power stocks were firmer on government promotion plans of clean energy in massive rural areas. Cyclical steel and non-ferrous stocks led the loss after recent weeks’ continuous strong moves. Real estate-related building material, home appliance, and banks retreated on worries about the default risk of Evergrande, the country’s second largest developer. Semiconductors and autos also weakened. The market is highly mixed and volatile with strong sector rotation and the distribution day count remains elevated. We recommend investors stay patient and watch macro policy signals, regulatory moves, and geopolitical dynamics.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq continued to pullback this week, with the S&P 500 closing just below its 50-DMA (S&P 500: 4,436; Nasdaq: 14,875). Despite the pullback, indices remain just 2% off highs. The next level of support below the 50-DMA on the S&P 500 is ~4,367, while the Nasdaq has good support at ~14,900. The distribution day count stands at three and four, respectively, with one day expiring on each next week.
European Focus
On Thursday, the Stoxx 600 closed 0.49% above last Friday’s close. Norway was again downgraded to an Uptrend Under Pressure. Of the 17 indices we cover, five are in an Uptrend Under Pressure, including the U.K. and France, and the rest are in a Confirmed Uptrend.
Global Focus Developed
Australia’s ASX All Ordinaries Index was flat this week. The index closed slightly below its 50-DMA and is testing resistance along that level. It remains in a Confirmed Uptrend and has seven distribution days currently, after adding one this week. Two distribution days will expire next week.
Global Focus Emerging
The CSI 300 lost 3.14% on slightly lower but above average volume this week. The market remains in an Uptrend Under Pressure with seven distribution days. The index staged a rally Friday after losing support at its 50- (~4,941, +1.7%) and 21-DMA (~4,883, +0.5%) in a four-day losing streak. Next support lies at July 28’s low (~4,664, -4.0%).
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.
