Australia’s ASX All Ordinaries Index gained 3.4% this week. It is trading above all key moving averages and is 9% below its 52-week high. On Monday, we shifted the index to a Confirmed Uptrend from an Uptrend Under Pressure as it gained above its recent high. It has seven distribution days.
Author: Sandeeep N
Global Focus Emerging
The CSI 300 fell 0.59% on slightly higher volume. The market was shifted to a Confirmed Uptrend Monday, with the number of distribution days increasing to five. Next support is at the 21-DMA (4,805, -1.1%) and resistance lies at Monday’s new high of ~5,000 (+9.0%). The index gapped up to break above resistance at August’s high (~4,900) on much larger volume Monday, as Joe Biden’s victory in the U.S. presidential election raised hopes about U.S.-China relations.
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 rose 4.05% on higher volume. The market remains in an Uptrend Under Pressure with the distribution day count decreasing to four. The index trended up throughout the week, retook its 50-DMA (4,725; -3.3%) and 21-DMA (4,774; -2.3%), but failed to break above key resistance of the previous high (~4,900; +0.3%). Market sentiment was boosted as U.S. election results showed a firming lead for Biden, leading to expectations of easing Sino-U.S. relations. Both official and Caixin PMI data in October were better than consensuses. Ant Group’s IPO was halted, encouraging market liquidity. Consumer Cyclical led this week as Household Appliances and Automobile showed strong momentum due to the resumption of domestic demands after two years of decline. Basic Material also posted strong performance on improving demand of coal, petro, and nonferrous metals. Health Care lagged due to centralized medicine procurements. We expect the market to be more bullish if the CSI 300 can break above resistance of 4,900. We recommend that investors stay patient and focus on quality stocks breaking out of proper bases.
US Focus
The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq regained their respective 50-DMA this week and are now testing resistance at October highs (S&P 500: 3,550; Nasdaq: 11,965). The 10- and 21-DMA have begun to turn back up and will now act as near-term resistance should a pullback occur. The distribution day count stands at seven and five, respectively, with one day expiring on each Monday.
European Focus
The market saw a strong uptick this week, and compared with last Friday’s close, it closed 7.23% up on Thursday.
Global Focus Developed
Australia’s ASX All Ordinaries Index gained 4.3% this week and is trading above its 50- and 200-DMA. The index is in an Uptrend Under Pressure and has seven distribution days.
Global Focus Emerging
The CSI rose 4.05% on higher volume. The market remains in an Uptrend Under Pressure with the distribution day count decreasing to four. The index trended up throughout the week, retook its 50-DMA (4,725; -3.3%) and 21-DMA (4,774; -2.3%), but failed to break above key resistance of the previous high (~4,900; +0.3%).
Global Focus Frontier
Savola Group is a strategic investment holding group in the food and retail sectors across MENAT (Middle East, North Africa, and Turkey region).
China A Shares
The CSI 300 fell 0.49% on higher volume. The market remains in an Uptrend Under Pressure with five distribution days. The index gapped lower Monday, trending higher to hit a weekly high Thursday but fell below its 21-DMA and 50-DMA (~4,715, +0.4%) again on Friday. The next support is at the gap (4,640, +1.2%) of October 9. China’s fourteenth five-year plan (2021–2025), approved by the Communist Party meeting Thursday, aims to realize sustained and healthy economic development on the basis of a marked improvement in quality and efficiency. Health Care and Consumer Cyclical were leading this week, boosted by a resurgence of COVID-19 and upbeat Q3 results from consumer cyclical stocks, while Financial and Real Estate lagged. We expect the market to continue to consolidate in the near term before breaking above key resistance of 4,900. We recommend investors stay cautious about market volatility next week due to the U.S. presidential election on November 3 and focus on quality stocks breaking out of key resistance.
