Australia’s ASX All Ordinaries Index gained 5.5% this week. It gained above 50- and 200-DMA. The index is in an Uptrend Under Pressure with five distribution days. One distribution day is set to expire next week.
Author: Sandeeep N
Global Focus Emerging
The CSI 300 gapped up and gained 2.0% in this one-day week after the holiday. Volume was higher but still below average. The market remains in an Uptrend Under Pressure with five distribution days. The index tested resistance at the 50-DMA (4,691), while immediate support still lies at its rising 100-DMA (4,449).
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 rose 0.38% this week and remains in an Uptrend Under Pressure with the number of distribution days falling one to five. The A share market will be closed October 1‒8 for the national holiday. Trading activity remained lukewarm before the long holiday and volume was significantly less than average. The index kept trading below its 21-DMA (~4,658, +1.5%), which serves as immediate resistance, followed by the 50-DMA (~4,690, +2.1%). We look for the 100-DMA (~4,440, -3.3%) as the next level of support. China’s factory activity has maintained momentum following the shutdown and accelerates at a solid pace. The profits of industrial enterprises grew for a fourth consecutive month in August, rising 19.1% y/y after July’s increase of 19.6%. The official manufacturing PMI for September came in at 51.5, up from 51.0 in August and beating consensus of 51.2. We maintain a cautious view of the general market with consistently low daily turnover and elevated distribution days. We expect the CSI 300 to continue consolidating. Investors are advised to stay patient and wait for quality ideas to set up new bases. Continue to focus on stocks with high relative strength.
US Focus
The U.S. market has shifted back to Confirmed Uptrend. The status change was made after Thursday’s close as both indices regained their respective 50-DMA, a multitude of quality growth ideas turned actionable, and distribution was avoided for seven straight sessions ahead of a period where multiple days will begin to expire. On Friday, indices pulled back to their respective 50- DMA, though little damage was done to leading stocks given sizable gains earlier in the week. Four distribution days will expire on the S&P 500 and two on the Nasdaq over the next eight sessions.
European Focus
On Thursday, the Stoxx 600 ended 1.77% above last Friday’s close. Of the 17 indices that we cover, two are in a Confirmed Uptrend, eight are in an Uptrend Under Pressure, and seven are in a Rally Attempt.
Global Focus Developed
Australia’s ASX All Ordinaries Index declined 2.6% this week. It breached support along its 21-DMA. The index registered two distribution days this week and is in an Uptrend Under Pressure with eight distribution days. Three distribution days are set to expire next week.
Global Focus Emerging
The CSI 300 rose 0.38% this week and remains in an Uptrend Under Pressure with the number of distribution days falling one to five. The A share market will be closed October 1‒8 for the national holiday. Trading activity remained lukewarm before the long holiday and volume was significantly less than average. The index kept trading below its 21- DMA (~4,658, +1.5%), which serves as immediate resistance, followed by the 50-DMA (~4,690, +2.1%). We look for the 100-DMA (~4,440, -3.3%) as the next level of support.
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 3.53% on lower volume and remains in an Uptrend Under Pressure with six distribution days. The 50-DMA (4,698, +2.8%) and 21-DMA (4,694, +2.7%) converged and are acting as resistance. Next support is at 100-DMA (4,424, -3.2%). The loan prime rate remained steady for a fifth straight month as expected, with one-year rates at 3.85% and five-year rates at 4.65%. The Trump administration approved a deal for Oracle and Walmart to acquire TikTok’s U.S. operations. Market sentiment has been dampened by the second outbreak of COVID-19 in Europe, with Health Care the only sector to gain this week (+0.32%). Geopolitical tensions, including on the Sino-Indian border and Taiwan Strait, also worried investors. Investors tend to be cautious ahead of the weeklong National Day Holiday (October 1‒8). We remain cautious due to a clustering of distribution days and expect the market to continue choppy trading in the near term. We recommend investors stay patient and wait for quality names to set up new bases.
