Australia’s ASX All Ordinaries Index declined 1.8% this week. It is testing support along its 50-DMA. The index is in a Confirmed Uptrend and has six distribution days. Three distribution days expire next week.
Author: Sandeeep N
Global Focus Emerging
The CSI 300 fell 7.65% on significantly higher volume. The market was shifted to an Uptrend Under Pressure with the number of distribution days decreasing to six. The index trended downward and breached below its 21- and 50-DMA (5,364, +0.5%), with next support at the 100-DMA (5,104, -4.4%).
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 fell 0.50% on lower volume in only two trading days this week after the Chinese New Year. The market remains in a Confirmed Uptrend with the number of distribution days increasing to seven. The index made a new high of 5,930 Thursday, breaking above October 2007’s high of 5,892 in but later trending down. The index faces resistance at new highs of 5,930 (+2.6%), with immediate support at 21-DMA (5,542, -4.1%). China’s central bank drained a net of RMB 260B in the first trading day after the Chinese New Year, dampening market sentiment. Energy and Basic Materials led while new energy retreated. Investors shifted out of expensive stocks toward cyclical players with low valuations that would benefit from an economic recovery. Nearly 90% of all Ashares closed with gains, mainly small and mid-cap stocks. We expect the index to be range-bound in the near term considering liquidity tightening and strong rotation. We recommend a selective approach in the highly volatile market. Focus on stocks with solid fundamentals and strong technical profiles
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq pulled back slightly this week but held above support at the 10-DMA (S&P500 :3,905) and 21-DMA (Nasdaq:13,720) , respectively. The distribution day stands at four and three days, with one day expiring on S&P 500 next week.
European Focus
On Thursday, the Stoxx 600 closed 0.31% below last Friday’s close. Of the 17 indices that we cover, nine are in a Confirmed Uptrend and eight in an Uptrend Under Pressure. This week, we shifted France to a Confirmed Uptrend as it reached a new high.
Global Focus Developed
Australia’s ASX All Ordinaries Index declined 0.2% this week. It closed below its 21-DMA support. The index is in a Confirmed Uptrend. It added one distribution day this week, taking the total to five.
Global Focus Emerging
The CSI 300 fell 0.50% on lower volume in only two trading days this week after the Chinese New Year. The market remains in a Confirmed Uptrend with the number of distribution days increasing to seven. The index made a new high of 5,930 Thursday, breaking above October 2007’s high of 5,892 in but later trending down. The index faces resistance at new highs of 5,930 (+2.6%), with immediate support at 21- DMA (5,542, -4.1%).
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 advanced 5.91% in the holiday-shortened week, eking out a new high since October 2007. The market was shifted back to a Confirmed Uptrend, with six distribution days. Next resistance is at 2017 highs of 5,891 (+1.45%). Immediate support lies at the 21-DMA (5,518, -4.98%) followed by the 50-DMA (5,286, -8.97%). Market sentiment improved ahead of the Chinese New Year as recent COVID-19 outbreaks were controlled. Liquidity worries eased further with new RMB loans in January up to RMB 3.58T from RMB 1.26T to beat consensus of RMB 3.53T, and new total social financing of RMB 5.17T, up from RMB 1.72T to beat expectations of RMB 4.47T. January CPI was down 0.3% (versus consensus of -0.1% and previous growth of +0.2%) on high base last year, and PPI was up 0.3%, in line. Consumer stocks continued to perform strongly as investors traded the coming festival. Chemical and non-ferrous metals were among the top gainers on price-hike expectations following demand recovery. Financial, utility and real estate were weak. We recommend a selective approach with more patience.
