The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq continue to trend into higher highs with just two distribution days each. Near-term support remains the sharply rising 10- and 21-DMA.
Author: Sandeeep N
European Focus
On Thursday, the Stoxx 600 closed 0.22% higher and is up 0.33% from last Friday’s close. Today, the Stoxx 600 is gaining 0.79% following better-than-expected GDP data from China. It followed a trade deal with the U.S. earlier this week.
Global Focus Developed
Australia’s ASX All Ordinaries Index hit an all-time high and was up 1.97% this week. The index remains in a Confirmed Uptrend with three distribution days.
Global Focus Emerging
The CSI 300 declined 0.2% for the week on lower volume, ending a sixweek gaining streak. The market remains in a Confirmed Uptrend with four distribution days. The index has been consolidating after hitting 52-week highs, remaining constructive. We continue to be positive on the general market. A phase-one trade deal between the U.S. and China was signed, easing tensions but still leaving major problems unsolved. China’s GDP grew 6.1% y/y in 2019, the weakest growth in nearly 30 years. More stimulus is expected to boost sluggish demand. Immediate support is at ~4,100 then at ~4,000. We expect the CSI 300 to continue consolidating around 4,200, with strong resistance at ~4,400. Investors are advised to focus on quality ideas with strong expectations approaching earnings season and select those emerging from solid bases or strongly rallying from key support levels.
Global Focus Frontier
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China A Shares
The CSI 300 rose 1.24% this week on higher volume and remains in a Confirmed Uptrend with three distribution days. The finalization of terms of a phase one China-U.S. trade deal significantly boosted market sentiment. China’s stronger-than-expected November economic data signaled that government’s policies seem to be taking effect, improving investors’ risk appetite. The CSI 300 was trading constructively after decisively breaking above the previous November’s high and is testing the next resistance at April’s high (~4,100). We are hopeful the index holds above support at ~3,925. Due to heavy selling pressure approaching April’s high, we expect the index to consolidate around ~4,020 in the near term. Investors need to remain disciplined and avoid extended ideas as volatility increases near the area of intense pressure. The Technology and Capital Equipment sectors were leading while Health Care stocks have been lagging our Focus List for a month. Health Care remains weak and we advise investors to trim positions. We recommend accumulating positions in stocks with decisive breakouts from solid bases or key support levels. Profits earned by China’s major industrial firms in November, another important economic indicator, are expected to be released next Friday.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq are trending into higher highs above all moving averages. Near-term support is at the 10-DMA (S&P 500: 3,181; Nasdaq: 8,785), followed by the 21-DMA (S&P 500: 3,153; Nasdaq: 8,689). Distribution remains at four days on both indices.
European Focus
On Thursday, the Stoxx 600 closed 0.17% higher and had gained 0.74% from last Friday’s close. Today, the Stoxx 600 is trading constructively and has gained 0.54%.
Global Focus Developed
Australia’s ASX All Ordinaries Index is consolidating above its 50- DMA. The index was up 1.17% and remains in a Confirmed Uptrend. It added two distribution days, taking its total to six.
Global Focus Emerging
The CSI 300 rose 1.24% this week on higher volume and remains in a Confirmed Uptrend with three distribution days. The finalization of terms of a phase one China-U.S. trade deal significantly boosted market sentiment. China’s stronger-than-expected November economic data signaled that government’s policies seem to be taking effect, improving investors’ risk appetite. The CSI 300 was trading constructively after decisively breaking above the previous November’s high and is testing the next resistance at April’s high (~4,100). We are hopeful the index holds above support at ~3,925. Due to heavy selling pressure approaching April’s high, we expect the index to consolidate around ~4,020 in the near term. Investors need to remain disciplined and avoid extended ideas as volatility increases near the area of intense pressure. The Technology and Capital Equipment sectors were leading while Health Care stocks have been lagging our Focus List for a month. Health Care remains weak and we advise investors to trim positions. We recommend accumulating positions in stocks with decisive breakouts from solid bases or key support levels. Profits earned by China’s major industrial firms in November, another important economic indicator, are expected to be released next Friday.
