Australia’s ASX All Ordinaries Index advanced 1.3% this week. It is trading constructively along its 21-DMA, close to its 52-week high. The index is in a Confirmed Uptrend with three distribution days, with one distribution day expiring next week.
Author: Sandeeep N
Global Focus Emerging
The CSI 300 rose 2.05% on lower but still above average volume and remains in a Confirmed Uptrend with five distribution days. The index trended higher throughout the week after last week’s pullback. It faces immediate resistance at highs of 5,645 (+1.3%).
Global Focus Frontier
Saudia Dairy and Foodstuffs Company (Sadafco) is engaged in the manufacturing and distribution of food products. UHT Milk, tomato paste and Icecreams are its major products.
China A Shares
The CSI 300 fell 0.68% on higher, above average volume. The market remains in a Confirmed Uptrend with the number of distribution days increasing to five. The index hit a new high of 5,645 Wednesday but pulled back the following two sessions. It faces resistance at the new high (5,645, +3.2%) and had support at the 21-DMA (5,244, -3.9%). December CPI and PPI rose 0.20% and fell 0.4% y/y, respectively, stronger than expectations and previous readings. December’s liquidity data fell versus November and M2 rose 10.10% y/y, slightly lower than expectations of 10.66%. Incremental RMB loans were RMB 1.26T, higher than consensus of 1.21T. Social financial was RMB 1.72T, lower than the previous 2.13T. December exports and imports rose 18.1% and 6.5% y/y (in $), respectively, stronger than expectations. Low-valuation sectors Communication Service, Financial, and Real Estate led the market this week while long-term leading sectors Consumer Staple, Defense, and EV retreated. Market sentiment was dampened by the surge of COVID-19 cases and tightening liquidity data. We noticed that capital is flowing out of those leading and large-cap stocks and searching for new ideas. We expect the index to be range-bound in the near term considering the recent rally and consolidation of leading stocks. We advise investors to stay disciplined and focus on quality stocks breaking out of proper bases. Avoid chasing extended ideas.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq pulled back off alltime highs this week, consolidating sharp gains over the last several weeks. Despite the pullback, both indices held above their respective 21-DMA (S&P 500: 3,747; Nasdaq: 12,860) while avoiding any big pick up in distribution.
European Focus
Markets continued to move higher with the only exception of Monday. The Stoxx 600 closed 0.2% higher on Thursday compared to last Friday’s close.
Global Focus Developed
Australia’s ASX All Ordinaries Index declined 0.5% this week. It is consolidating constructively above its 21-DMA since December 2020. It added one distribution day and remains in a Confirmed Uptrend with six distribution days. Three distribution days will expire next week.
Global Focus Emerging
The CSI 300 fell 0.68% on higher, above average volume. The market remains in a Confirmed Uptrend with the number of distribution days increasing to five. The index hit a new high of 5,645 Wednesday but pulled back the following two sessions. It faces resistance at the new high (5,645, +3.2%) and had support at the 21-DMA (5,244, -3.9%).
Global Focus Frontier
Saudia Dairy and Foodstuffs Company (Sadafco) is engaged in the manufacturing and distribution of food products. UHT Milk, tomato paste and Icecreams are its major products.
China A Shares
The CSI 300 rose 5.45% on significantly higher volume. The market remains in a Confirmed Uptrend with four distribution days. The index hit new highs for four consecutive sessions but closed with a loss on Friday. The index now faces resistance at new highs at 5,547 (+0.9%), with the next resistance at January 2008’s high of 5,730 (+4.3%). December’s Caixin manufacturing and service PMI were 53.0 and 56.3, respectively, both lower than November’s readings but still in the expansion range. New energy vehicle battery-related, solar energy, and defense stocks led the gain due to high growth expectations in 2021. Consumer Staple also surged as dairy product prices increased. We noticed that capital clustered around leading and large-cap companies. We expect the index to remain range-bound in the near term after the recent rally and advise investors to focus on quality stocks with sound fundamentals breaking out of proper bases. Avoid chasing highs.
