On Thursday, the Stoxx 600 closed 0.40% above last Friday’s close. We shifted Germany, Finland, and Norway to a Confirmed Uptrend after the indices reclaimed their prior highs. Of the 17 indices that we cover, 13 are in a Confirmed Uptrend, including all the major indices – the U.K., France, Germany, and the Stoxx 600, and the remaining are in an Uptrend Under Pressure.
Author: Midhun Parameswaran
Global Focus Developed
Australia’s ASX All Ordinaries Index gained 1.6% this week. The index closed at a new 52-week high. It is in a Confirmed Uptrend with four distribution days. One distribution day will expire next week.
Global Focus Emerging
The CSI 300 fell 0.73% on lower and below-average volume this week. The market remains in a Confirmed Uptrend with six distribution days. The index managed to trade above its 100-DMA (~5,260, -0.4%). Next support is at the 21-DMA (~5,190, -1.75%). The index will face strong resistance as it attempts to test all-time highs of 5,930 (+12%) in February.
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 rose 3.64% on higher and above average volume this week. The market was shifted to a Confirmed Uptrend Tuesday with the number of distribution days rising to 6. The index broke above two-month resistance at its 100-DMA (~5,250, -1.6%) with no clear resistance until January’s consolidation are at 5,300–5,600. Next support lies at the 21-DMA (5,145, -3.3%). Industrial profits rose 106% y/y in January through April and increased 49.6% compared with same period of 2019. Securities stocks led due to the recent active trading. Food & Beverage followed the gains, mainly driven by Baijiu. Agriculture stocks lagged due to expectations of falling pork prices. Market sentiment was supported by the appreciation of the RMB to USDCNH 6.36, a three-year high, and lessening worries about inflation as commodities prices fell. Our conviction increases as the CSI 300 retook and holds above key support at its 100-DMA. We advise investors to gradually increase risk exposure and be selective about quality stocks breaking out of solid bases. Avoid chasing highs. Northbound trading via the HK-China Stock Connect posted a net inflow of RMB 46.8B this week, and Tuesday’s inflow of RMB 21.7B was the largest daily inflow in history.
US Focus
The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq have regained their 21- DMA (4,168) and 50-DMA (13,611) respectively and continue to consolidate in a constructive fashion above support. The distribution day count stands at eight and four respectively with one day expiring one each index next week.
European Focus
On Thursday, the Stoxx 600 ended 0.45% above last Friday’s close. Of the 17 indices we cover, 10 are in a Confirmed Uptrend and seven in an Uptrend Under Pressure. This week, we upgraded Switzerland and Italy to a Confirmed Uptrend after they reclaimed their prior rally high
Global Focus Developed
Australia’s ASX All Ordinaries Index gained 2.2% this week, closing at a new 52-week high. The index is in a Confirmed Uptrend with five distribution days, after adding one distribution day this week.
Global Focus Emerging
The CSI 300 rose 3.64% on higher and above average volume this week. The market was shifted to a Confirmed Uptrend Tuesday with the number of distribution days rising to 6. The index broke above two-month resistance at its 100-DMA (~5,250, -1.6%) with no clear resistance until January’s consolidation are at 5,300–5,600. Next support lies at the 21-DMA (5,145, -3.3%).
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.
