The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq built on last week’s strong gains, moving further into all-time highs this week. Near-term support remains the rising 10- and 21-DMA (S&P 500: 3,848; Nasdaq: 13,610). The distribution day count remains relatively low at five and two, respectively, with one day expiring on the S&P 500 next week.
Author: Sandeeep N
European Focus
On Thursday, the Stoxx 600 ended 0.44% above last Friday’s close. Of the 17 indices that we cover, four are in a Confirmed Uptrend and 13 in an Uptrend Under Pressure. This week, we shifted Italy to a Confirmed Uptrend as it reached a new high.
Global Focus Developed
Australia’s ASX All Ordinaries Index declined 0.4% this week. It closed above all key moving averages and has support along its 21-DMA (-1.2%). We moved the index to a Confirmed Uptrend on Monday. It added one distribution day this week, taking the total to five. One distribution day is set to expire next week.
Global Focus Emerging
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%).
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 rallied 2.46% to retake its 21-DMA on average volume and remains in an Uptrend Under Pressure with six distribution days. Immediate resistance lies at the previous week’s high of 5,655 (+3.1%), and key support remains at the 50-DMA (5,245, -4.3%) if the 21-DMA fails. Liquidity concerns eased as the Central Bank restarted injecting funds in the market and resumed the 14-day reverse repo ahead of the Chinese New Year. China’s manufacturing PMI fell to a fivemonth low of 51.3 in January. Investors were trading the coming New Year; Consumer Staple posted strong performance, led by food and beverage stocks, on holiday spending expectations. Banking was among the top gainers on upbeat earnings and a better outlook, with the economic recovery fueling hopes of rate hikes. Health Care bounced back, but Defense and Tech stocks weakened. Market sentiment leaned cautious due to earnings volatility and uncertainties in the weeklong holiday ahead. Liquidity and the new U.S. administration’s China policy remain key focuses. Funds flowing to the Hong Kong market continued, though there were signs of waning. We recommend a cautious approach before clearer signs. Avoid any significant increase in risk exposure. Quality ideas breaking out of proper bases are still worthy of attention.
US Focus
The U.S. market is back in a Confirmed Uptrend. The S&P 500 and Nasdaq rebounded strongly from moving average support this week, pushing all the way back to new all-time highs. Near-term support is again the rising 10- and 21-DMA (S&P 3,804; Nasdaq: 13,358). Both indices avoided distribution, keeping the count at six and three, respectively, with one day expiring on the S&P 500 and two on the Nasdaq next week.
European Focus
On Thursday, the Stoxx 600 ended 3.46% above last Friday’s close. Of the 17 indices that we cover, three are in a Confirmed Uptrend and 14 in an Uptrend Under Pressure. This week, we shifted Sweden and Belgium to a Confirmed Uptrend as it reached a new high. Switzerland and the Netherlands were downgraded to an Uptrend Under Pressure after breaching its 21-DMA.
Global Focus Developed
Australia’s ASX All Ordinaries Index gained 3.5% this week. It closed above all key moving averages after declining below its 50-DMA during the last week. The index is in an Uptrend Under Pressure with five distribution days. One distribution day will expire next week.
Global Focus Emerging
The CSI 300 rallied 2.46% to retake its 21-DMA on average volume and remains in an Uptrend Under Pressure with six distribution days. Immediate resistance lies at the previous week’s high of 5,655 (+3.1%), and key support remains at the 50-DMA (5,245, -4.3%) if the 21-DMA fails.
