The CSI 300 gained 0.33% on higher and above average volume this week. The market remains in an Uptrend Under Pressure with six distribution days. The index regained its 5-DMA (~4,840, -0.1%) but faced persistent resistance at the 21-DMA (~4,888, +0.9%). Support lies at July 28’s low (~4,664, -3.7%) followed by July 2020’s low (~4,500, -7.1%).
Author: Midhun Parameswaran
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 1.21% higher on slightly higher and above average volume this week. The market remained in an Uptrend Under Pressure with four distribution days. The index tested resistance at its 21-DMA but pared early-week gains to close below the short-term 5- (~4,850, +0.5%) and 21-DMA (~4,907, +1.7%). Support lies at July 28’s low (~4,664, -3.4%) followed by July 2020’s low (~4,500, -6.8%). China’s central bank injected a net of RMB 120B into the banking system via three reverse repos during the week. Industrial profit growth fell to 16.4% y/y in July, a low since November 2020. Expectations of policy support increasing as the domestic economy continued to slow. Cyclical mining, non-ferrous and steel stocks hit yearly highs on strong earnings and improving outlook amid tight supply. Solar and chemical companies also remained strong. Financial and real estate stocks retreated from last week’s bounce and health care kept falling. The market was volatile and news-sensitive amid persistent regulatory concerns and busy earnings. The U.S. Federal Reserve’s Jackson Hole meeting was also watched for cues about bond purchase tapering. We are leaning toward a wait-and-see attitude and recommend investors stay patient. Be selective and focus only on quality stocks with sound fundamentals and strong technical profiles.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq are trading at or near all – time highs with leadership expanding across multiple sectors and market caps. Support is at the rising 10-and- 21-DMAs ( S&P 500: 4,469, Nasdaq: 14, 809). The distribution day count stands at three and two, respectively, with two expiring on the S&P 500 next week
European Focus
On Thursday, the Stoxx 600 ended 0.33% above last Friday’s close. Of the 17 indices we cover, 12 are in a Confirmed Uptrend and five in an Uptrend Under Pressure. This week, we upgraded Portugal to a Confirmed Uptrend after the index reclaimed its prior rally high.
Global Focus Developed
Australia’s ASX All Ordinaries Index gained 0.5% this week. The index regained its 21-DMA after briefly testing support at the level last week. It is trading 2% below its 52-week high. The index is in a Confirmed Uptrend and currently has four distribution days, after adding one this week. One distribution day will expire next week.
Global Focus Emerging
The CSI 300 ended 1.21% higher on slightly higher and above average volume this week. The market remained in an Uptrend Under Pressure with four distribution days. The index tested resistance at its 21-DMA but pared earlyweek gains to close below the short-term 5- (~4,850, +0.5%) and 21-DMA (~4,907, +1.7%). Support lies at July 28’s low (~4,664, -3.4%) followed by July 2020’s low (~4,500, -6.8%).
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 ended 3.57% lower on higher and above average volume this week. The market was shifted to an Uptrend Under Pressure following a greater than 2% loss on higher volume Tuesday. The distribution day count increased to three from one last week. The index tested but failed to break above short-term resistance at its 5- (~4,861, +1.9%) and 21-DMA (~4,913, +3.0%). Support lies at July 28’s low (~4,664, -2.2%) followed by July 2020’s low (~4,500, -5.6%). July’s industrial production (+6.4% y/y versus expectations of 7.9%), retail sales (+8.5% y/y versus expectations of 11.6%), and fixed-asset investment (+11.4% y/y versus expectations of 12.6%) all slowed and missed consensus. Lingering policy concerns pressured sentiment as regulatory worries broadened to the liquor and medical sectors. Buying into brokers and developers continued. Defense companies remained strong, but liquor makers and healthcare companies led losses on worries of policy uncertainties. Risk appetite was dampened by a slowing domestic economy and upcoming tapering by the U.S. Federal Reserve. Upward momentum lost steam and volatility is increasing with more earnings to come. We are becoming more cautious and recommend investors adopt a patient and selective approach. Focus on stocks with sound fundamentals and strong technical profiles.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq pulled back to their respective 50-DMA, before finding support and closing within the upper half of their weekly range. Support below the 50-DMA is ~4,233 on the S&P 500 and ~14,200 on the Nasdaq. Despite adding a distribution day on Tuesday, the overall count declined to three and two, respectively, with no expiration next week.
