Australia’s ASX All Ordinaries Index declined 0.1% this week. The index briefly declined below its 50-DMA, but regained above the moving average today. On Tuesday, we shifted the index to a Confirmed Uptrend from an Uptrend Under Pressure as it closed at a 52-week high. It currently has four distribution days (two expire next week).
Author: Midhun Parameswaran
Global Focus Emerging
The CSI 300 dropped 2.39% on higher but below average volume in 2022’s first trading week and remained in an Uptrend Under Pressure with the distribution day count rising to five. The index breached converging 50- and 100-DMA support with the next immediate short-term support at November 10’s low of ~4,754 (-1.4%).
Global Focus Frontier
Ho Chi Minh City Development Joint Stock Commercial Bank (HD Bank) is one of the top banks in Vietnam and 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 growth.
China A Shares
The CSI 300 gained 0.39% on lower and below average volume in this year’s last trading week and remained in an Uptrend Under Pressure with three distribution days. The index traded around its converging 50- and 100-DMA (4,912, -0.6%) with short-term support at November 10’s low of ~4,754 (-3.8%) and immediate resistance at its 200-DMA (~5,005, +1.3%). Investors parsed lower November industrial profit growth (+9.0% y/y, previous 24.6%) and below-consensus official December manufacturing PMI (50.3, consensus 50.5). Traditional Chinese medicine stocks were boosted by policy support in a five-year development plan for drug safety and files from the National Healthcare Security Administration. Solar and defense led on a robust long-term outlook. Lithium stocks rebounded on strong prices after digesting supply chain disruption worries. Liquor companies were hit by rumors of a consumption tax. Power stocks retreated from recent strong upward moves. Long-term leading auto-related stocks underperformed on profit-taking pressures with rich valuations and less EV subsidies in 2022. Wait-and-see sentiment continued to rise amid increasing domestic COVID infections ahead of year-end. The market remained volatile with strong sector rotation. Investors should stay patient and adopt a disciplined and selective approach as annual earnings clues start to come out.
US Focus
The U.S. market is back in a Confirmed Uptrend. The S&P 500 rallied back to all-time highs on 12/27/2021, and while it failed to make further progress, it remains above the prior high of 4,743. Below that support is the rising 21-DMA (4,703). The Nasdaq held a recent retake of the 50-DMA, it is facing resistance at the midpoint of its 9-week consolidation (~15,800) and is about 3% below alltime highs. Indices finished the year with 27% and 21% gains, respectively. The S&P 500 picked two consecutive distribution days to end the week and now has seven. The Nasdaq lost one this week and has four. One expires on each index early next week.
European Focus
On Thursday, the Stoxx 600 closed 1.2% above the previous Thursday’s close and remains in an Uptrend Under Pressure with five distribution days. Of the 16 other indices we cover, eight are in an Uptrend Under Pressure, one in a Rally Attempt, and the remaining seven in a Confirmed Uptrend. The market status of none of the 17 indices that we follow changed during the week. European markets currently have an average distribution day count of 3.5.
Global Focus Developed
Australia’s ASX All Ordinaries Index gained 0.9% this week. The index reclaimed its 50-DMA and is trading close to its 52-week high. It is in an Uptrend Under Pressure with four distribution days and has immediate support along its 50-DMA (-2.0%). One distribution day will expire next week.
Global Focus Emerging
The CSI 300 gained 0.39% on lower and below average volume in this year’s last trading week and remained in an Uptrend Under Pressure with three distribution days. The index traded around its converging 50- and 100-DMA (4,912, -0.6%) with short-term support at November 10’s low of ~4,754 (-3.8%) and immediate resistance at its 200-DMA (~5,005, +1.3%).
Global Focus Frontier
Ho Chi Minh City Development Joint Stock Commercial Bank (HD Bank) is one of the top banks in Vietnam and 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 growth.
China A Shares
The CSI 300 closed with a narrowed loss of 0.12% as of Thursday this week. The market was shifted to an Uptrend Under Pressure following Monday’s heavy selloff. The current distribution day count is three. The index found support at and then traded around its converged 100- and 50-DMA (~4,912, -0.7%). Next support lies at previous lows of ~4,663 (-5.8%). Agricultural stocks led gains on positive expectations fueled by upcoming festival spending with the approaching year-end. Property developers and building material companies outperformed amid the government’s loosening control over the sector, but with gains pared. Power stocks were strong on a better outlook amid the country’s continuous shift toward green energy. Tourism stocks underperformed with sporadic domestic outbreaks of COVID. Semiconductor, solar, and headline-rattled lithium stocks were among the top losers. A slowing domestic economy is expected in 2022. Wait-and-see sentiment is increasing as we head into year-end. Investors should stay patient amid the volatile market with strong rotation. Adopt a disciplined and selective approach and avoid chasing highs.
