Software (IGV): The software benchmark is testing the pivot (~$88) of a stage-two 20-week consolidation after five consecutive
weeks of gains. Quantitative metrics have improved over the last five weeks, with an Up/Down Volume ratio above 1 and a positive
Acc/Dist Rating of 14/B-. The RS line is also starting to show signs of consistent improvement with a RS Rating of 83, up from 43 five
weeks ago. Multiple stocks are building the right side of their base and setting up, including APPF, CYBR, DDOG, MNDY, and SNPS.
Ten of the 11 software groups in the O’Neil 197, have improved in Group Rank over the last four weeks with Desktop (#97), Design
(#81), and Enterprise (#74) showing the sharpest improvement. Continue to focus on ideas that are either breaking out or forming the
right side of their base. Trim ideas breaching key moving average supports on declining RS lines.
Author: Romeo Alvarez
Romeo Alvarez is a senior equity analyst at William O’Neil + Co., a registered investment advisor serving 400 top-performing institutional portfolio managers worldwide. The firm employs 150 associates in Los Angeles, New York, Boston, and London.
Based in the firm’s Los Angeles office, Mr. Alvarez is a senior equity analyst covering the Americas region and a member of the Global Focus List Committee, which approves all equity recommendations for developed, emerging, and frontier markets. Romeo also selects equity initiations to be covered in the Technology sector and regularly reports to clients on innovation and technology developments in Trend Watch.
Mr. Alvarez earned a B.S. in Business Economics from the University of California, Riverside, and an MBA with a focus in Finance from Loyola Marymount University, Los Angeles.
LATAM Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- Brazil’s Bovespa gained 2.1% last week and is attempting to break above the 200-DMA. The index remains in a Rally Attempt. We recommend clients wait for a follow-through day to add risk in Brazilian equities.
- Mexico’s benchmark index declined 0.7% last week. The index remains in a Rally Attempt. We recommend clients wait for a follow-through day to add risk in Mexican equities.
- The total number of Focus List stocks in the LATAM region remains at five. Nu Holdings (NU) is actionable.
- Stocks of interest: Cury Construtora (CCE.BR; CURY3:BZ), Santos Brasil (STB.BR; STBP3:BZ), Embraer (EA3.BR; EMBR3:BZ) and Weg (WG3.BR; WEGE3:BZ).
O’Neil TMT Weekly
Software (IGV): We continue to see incremental improvements across the software benchmark. The IGV is forming the right side of
a stage-two 20-week flat base after clearing above resistance at ~$85 and is currently testing the next level of resistance at ~$87.
Quantitative metrics have improved over the last four weeks, with an Up/down Volume ratio above 1 and a positive Acc/Dist Rating of
14/B-. The RS line is also starting to show signs of consistent improvement with a RS Rating of 81, up from 58 in four weeks.
Leaders at or slightly above their pivot include CRWD, FICO, GWRE, and ORCL. However, multiple stocks are building the right side
of their base and setting up, including APPF, CYBR, DDOG, MNDY, and NOW. Nine of the 11 software groups in the O’Neil 197, have
improved in Group Rank over the last four weeks with Security (#57), Tech Services (#56), and Desktop (#143) showing the sharpest
improvement. Continue to focus on ideas that are either breaking out or forming the right side of their base. Trim ideas breaching key
moving average supports on declining RS lines.
LATAM Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- Brazil’s Bovespa gained 1.4% last week and was shifted to a Rally Attempt. We recommend clients wait for a follow-through day to add risk in Brazilian equities.
- Mexico’s main index gained 1.1% last week. The index remains in a Rally Attempt. We recommend clients wait for a follow-through day to add risk in Mexican equities.
- The total number of Focus List stocks in the LATAM region remains at five. Inter (IP9.BR; INBR32:BZ) is actionable.
- Stocks of interest: Embraer (EA3.BR; EMBR3:BZ), Marfrig (MFA.BR; MRFG3:BZ), Weg (WG3.BR; WEGE3:BZ), Grupo Aeroportuario del Sureste (AUS.MX; ASURB:MM) and Cencosud (CNS.CL; CENCOSUD:CI).
O’Neil TMT Weekly
Software (IGV): The software benchmark continues to gradually improve and has regained its 100-DMA ($83) albeit on below average volume. However, the IGV is currently trading above all key moving averages. The index is forming the right side of a stagetwo 19-week flat base, with a pivot of $88.8. Next resistance is at $85.2. Quantitative metrics have improved over the last four weeks, with an Up/Down Volume ratio above 1 and a positive Acc/Dist Rating of 8. RS line continues to lag since peaking in early-February. Only a few ideas including MSFT, CRWD, ORCL, and TYL are near their pivot and are actionable, while most other ideas including
SNPS and EA are setting up and are forming the right side of their respective bases. Tech Services ideas including ACN, CTSH, and WIT were the major gainers last week. Six of the 11 software groups in the O’Neil 197, have improved in Group Rank over the last four weeks with Edu/Media (#79), Gaming (#134), and Design (#124) showing the sharpest improvement. Continue to focus on ideas that are either breaking out or forming the right side of their base. Trim ideas breaching key moving average supports on declining RS lines.
LATAM Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- Brazil’s Bovespa declined for the fourth consecutive week and closed 0.9% lower last week. The index is below its 200-DMA and is in a Downtrend. We recommend clients avoid adding risk in Brazilian equities.
- Mexico’s benchmark index declined 1.4% last week. The index is trading 4% below its 200-DMA and is in a Rally Attempt. We recommend clients wait for a follow-through-day to add risk in Mexican equities.
- Last week, we removed Alsea (ALE.MX; ALSEA*:MM) from the Focus List, reducing the total number of Focus List stocks in the LATAM region to five. Inter (IP9.BR; INBR32:BZ) is actionable.
- Stocks of interest: Embraer (EA3.BR; EMBR3:BZ), Gruma (GRM.MX; GRUMAB:MM), Cencosud (CNS.CL; CENCOSUD:CI) and Grupo Aeroportuario del Sureste (AUS.MX; ASURB:MM).
O’Neil TMT Weekly
Software (IGV): The software benchmark rose 3.3% last week on above average volume. It is forming the right side of a stage-two 18-week flat base, with a pivot of $88.8. Resistance is at its 100-DMA ($83.5), followed by $85.2. On the downside, support is near $81.4 (10/21/50-DMA). Quantitative metrics have improved over the last week, with an Up/down Volume ratio and Acc/Dist Rating rising week-over-week. But, RS line continues to lag since peaking in early-February. Actionable large caps include MSFT, ORCL, and FICO, while CDNS and SNPS are forming the right side of their respective bases. Other movers from last week include SHOP,
ADBE, HPE, and CRWD. Six of the 11 software groups in the O’Neil 197, have improved in Group Rank over the last four weeks with Gaming (#144), Services (#78), and Edu/Media (#103) showing the sharpest improvement, followed by Design (#142) and Financial (#34). Medical (#151) declined the most. Continue to focus on ideas that are either breaking out or forming the right side of their base. Trim ideas breaching key moving average supports on declining RS lines.
LATAM Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- Brazil’s Bovespa declined for the third straight week and closed 1.1% lower. The index remains in a Downtrend, trading 3% below its 200-DMA (124K). We recommend clients avoid adding risk in Brazilian equities.
- Mexico’s benchmark index declined 4.0% last week and broke below its 200-DMA (54,564). The index remains in a Rally Attempt. We recommend clients wait for a follow-through day to add risk in Mexican equities.
- The total number of Focus List ideas in the LATAM region remains at six. Inter (IP9.BR; INBR32:BZ) is actionable.
- Stocks of interest: Smu (SM.CL; SMU:CI), Grupo Aeroportuario del Sureste (AUS.MX; ASURB:MM) and Bancolombia (BCB.CO; PFBCOLO:CB).
O’Neil TMT Weekly
Software (IGV): The software benchmark regained its 200-DMA ($78.4) on above average volume. IGV is attempting to form the right side of a stage-two flat base, but still remains below resistance at its 50-DMA ($81). Quantitative metrics have improved over the last week, with an Up/Down Volume ratio above 1 and a positive Acc/Dist Rating of 6. Large-cap leaders including MSFT, ORCL, and SAP retook their 50-DMA and are trading above all key moving averages while other select ideas- SNPS, and MNDY are basing constructively. However CRM, ADBE, and INTU are below their 200-DMA and remain vulnerable to future downside. Seven of the 11 software groups in the O’Neil 197, have improved in Group Rank over the last four weeks with Gaming (#142) and Financial (#41) showing the sharpest improvement, followed by Design (#157) and Specific Enterprise (#65). We recommend a cautious approach on the IGV constituents and to allow stocks to continue to consolidate. Trim extended positions and those breaching key moving average supports on declining RS lines.
