SN Nuclearelectrica (SNN) is the world’s largest state-owned nuclear power generation company in the unregulated market (by market cap) and sixth largest (by market cap) in the total nuclear market. Improving levels of achievement in annual investment programs and leadership in nuclear space are expected to drive growth.
Author: Saminathan Jaganathan
China A Shares
The CSI 300 fell 2.21% on slightly higher and above average volume. The market was shifted to a Downtrend Monday then to a Rally Attempt Friday. The index breached its 100-DMA Monday, reached a near-three-month low Tuesday, and rebounded for the last three sessions. The index was challenging resistance at the 100-DMA (5,157, +0.2%), with next support at the 200-DMA (4,821, -6.3%). February’s CPI fell 0.2%, stronger than the expected 0.5% decline and previous 0.3% drop. PPI rose 1.7% y/y, higher than the expected 1.5% and the highest growth since November 2018. Social financing was RMB 1.71T while incremental RMB loans were 1.36T, both lower than January’s readings but higher than market consensus. M2 rose 10.1%, higher than expectations (+9.57%) and January’s reading (+9.4%). Previously leading names in Consumer, new Energy, and Health Care rebounded strongly for two consecutive days, supporting the CSI’s gains. However, on a weekly basis, these three sectors still lagged the market while Utility and Energy led the gains. We expect the index to trade around the 100-DMA in the near future due to tightening liquidity. We advise investors to stay cautious in the volatile market and focus on stocks with solid fundamental and technical profiles.
US Focus
The U.S. market is in a Rally Attempt. We will upgrade the market to Confirmed Uptrend should either S&P 500 close above 3,950, or the Nasdaq stage a follow-through day. Support on the S&P 500 is again the rising 10- and 21-DMA (3,873). The Nasdaq faces resistance at its 50-DMA (13,368), with support at ~13,000 before the rising 100-DMA (~12,700). Though the Nasdaq is still trading 6% off highs, multiple other indices are trading at all-time highs including the Dow and the Russell 2000.
European Focus
On Thursday, the Stoxx 600 closed 3.79% above last Friday’s close. Of the 17 indices that we cover, ten are in a Confirmed Uptrend and seven in an Uptrend Under Pressure. This week, we upgraded the Stoxx 600, Austria, Spain, Ireland, and Finland to a Confirmed Uptrend as they reached new highs.
Global Focus Developed
Australia’s ASX All Ordinaries Index gained 1.0% this week. It is testing resistance along its 50-DMA and is in a Confirmed Uptrend. This week, it added one distribution day, taking the total to seven. One distribution day will expire next week.
Global Focus Emerging
The CSI 300 fell 2.21% on slightly higher and above average volume. The market was shifted to a Downtrend Monday then to a Rally Attempt Friday. The index breached its 100-DMA Monday, reached a near-three-month low Tuesday, and rebounded for the last three sessions. The index was challenging resistance at the 100- DMA (5,157, +0.2%), with next support at the 200-DMA (4,821, -6.3%).
Global Focus Frontier
SN Nuclearelectrica (SNN) is the world’s largest state-owned nuclear power generation company in the unregulated market (by market cap) and sixth largest (by market cap) in the total nuclear market. Improving levels of achievement in annual investment programs and leadership in nuclear space are expected to drive growth.
China A Shares
The CSI 300 rose 4.20% this week on lower volume. The market remains in an Uptrend Under
Pressure with three distribution days. The index retook 21-DMA support on Wednesday and
we are looking for it to hold above this level to be constructive. The next support lies at the
50-DMA (~4289, -8.6%) and the next resistance is at July’s high of 4,878 (+3.9%). The official
manufacturing PMI rose to 51.1 in July from 50.9 in June, better than the estimated 50.5. The
non-manufacturing PMI was down to 54.2 in July from 54.4 in June, compared with consensus
of 54.5. Chinese industrial firms’ profits fell 12.8% y/y from January to June versus a 19.3% y/y
decline from January to May, adding to signs of an economic recovery. Stocks closed higher this
week with choppy trading amid uncertainties of a COVID-19 resurgence and rising Sino-U.S.
tensions, while market sentiment was boosted by positive macro data and long-term economic
plans discussed by policymakers. We recommend that investors stay disciplined amid recent
market volatility and focus on quality names coming out of proper bases.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq held support at
their respective 21-DMA this week before closing at the highs of the session on Friday. Positively,
both indices avoided distribution with the count falling to just one and three days, respectively. We
have yet to see a clustering of distribution days and leading ideas continue to trade constructively
above support
European Focus
Volatility in the market continued as Spain, China, and certain U.S.
locations saw a spike in COVID-19 cases. Increasing Sino-U.S. tensions are also
affecting international market. On Thursday, the Stoxx 600 was down 2.12%,
compared to last Friday’s close. The index added a distribution day on Thursday
when it dropped 2.16%, accounting for all of the loss in the week. We had to
downgrade the Stoxx 600 to an Uptrend Under Pressure along with four other
markets. We also downgraded three markets to a Downtrend after they breached
their respective support levels.
