Australia’s ASX All Ordinaries Index was up 0.80% this week and added one distribution day, taking its total count to four. It remains in a Confirmed Uptrend.
Author: Sandeeep N
Global Focus Emerging
The CSI 300 rose 0.5% for the week on increased volume and remains in a Confirmed Uptrend with three distribution days. The market is in a weak rally, boosted by a surprising rate cut to medium-term lending facilities and new signs of progress on the Sino-U.S. trade deal. The CSI 300 tested the high of its previous rally (~4,000) but retreated due to uncertainty surrounding the tariff rollback. Recent disappointing economic data also deflated market confidence. Unless a significant catalyst emerges, we expect the index to continue consolidating around consistent resistance at 4,000. We hope it holds above Monday’s gap (~3,964), which serves as immediate support. The next strong support is at the 50-DMA. We remain cautiously optimistic. Investors are advised to stay patient and focus on selecting stocks that have recently broken out with strong fundamentals. Keep an eye on key economic and financial data to be released next week, including October CPI/PPI, industrial value added, and fixed asset investment growth.
Global Focus Frontier
National Bank of Kuwait is the leading banking group in Kuwait in terms of assets, customer deposits, and customer loans and advances. Its strong leadership position across its product offerings will pave the way for its future growth.
China A Shares
The CSI 300 declined 1.1% for the week on above 10-week average volume. The market remains in a Confirmed Uptrend. Its distribution day count increased by one, taking its total count to six. Market volatility increased with a crowd of important news or data this week. Bullish news that trade negotiations had made substantial progress was not enough to boost the market up. China’s better-than-expected September financial data pulled the index up temporarily before it extended losses on disappointing economic data, including Friday’s news of lower-than-expected Q3 GDP growth. The cautious and risk averse sentiment has largely risen as it is believed that downward pressure on China’s economy has increased. The beginning of corporate third quarter results also hit optimism overall to some degree. We expect the CSI 300 to consolidate in the near term and face next support at its 50-DMA (+1.0%). We would like to see an increase in distribution days or an undercut of key support before downgrading the market condition. We continue to recommend a selective approach to increasing risk while staying cautious. Earnings are the key catalyst in individual ideas, therefore investors are advised to focus on stocks whose earnings may beat expectations. Avoid chasing highs.
US Focus
The U.S. market remains in a Rally Attempt. The S&P 500 and Nasdaq are hitting resistance near September highs after rallying strongly over the last two weeks. Near-term resistance is 3,022 on the S&P 500 and 8,243 on the Nasdaq before all-time highs. Both indices turned lower Friday and are now set to test support at their rising 21-DMAs followed by the 50-DMA which has turned back up over the last week. Monday will mark day 13 of the attempted rally and we continue to wait for a follow-through day or a breakout into new highs before upgrading the market status.
European Focus
On Thursday, the Stoxx 600 ended the day 0.38% above last Friday’s close and is in a Confirmed Uptrend. During the week, we upgraded Germany, Portugal, and the Netherlands to a Confirmed Uptrend after they witnessed follow-through days, and Finland was also upgraded to a Confirmed Uptrend after it breached the previous rally’s high. Of the 17 indices we cover, 11 are in a Confirmed Uptrend, five are in an Uptrend Under Pressure, and one is in a Rally attempt.
Global Focus Developed
Australia’s ASX All Ordinaries Index rose 0.54% this week. The index remains in an Uptrend Under Pressure. It added one distribution day, taking its total to five.
Global Focus Emerging
The CSI 300 declined 1.1% for the week on above 10-week average volume. The market remains in a Confirmed Uptrend. Its distribution day count increased by one, taking its count to six. Market volatility increased with a crowd of important news or data this week. Bullish news that trade negotiations had made substantial progress was not enough to boost the market up. China’s better-than-expected September financial data pulled the index up temporarily before it extended losses on disappointing economic data, including Friday’s news of lower-thanexpected Q3 GDP growth. The cautious and risk averse sentiment has largely risen as it is believed that downward pressure on China’s economy has increased. The beginning of corporate third quarter results also hit optimism overall to some degree. We expect the CSI 300 to consolidate in the near term and face next support at its 50-DMA (+1.0%). We would like to see an increase in distribution days or an undercut of key support before downgrading the market condition.
Global Focus Frontier
National Bank of Kuwait is the leading banking group in Kuwait in terms of assets, customer deposits, and customer loans and advances. Its strong leadership position across its product offerings will pave the way for its future growth.
China A Shares
The CSI 300 rose 2.6% for the week as market reopened after the long holiday. The market remains in a Confirmed Uptrend with five distribution days. Our conviction increased as the index rebounded after hitting a new low and had a three-day gaining streak. We believe the 50-DMA is providing effective support. Even so, volume has been lower than average, indicating cautious sentiment due to uncertainties around Sino-U.S. trade talks that began Thursday; the market has been cautiously optimistic. As we approach Q3 earnings, investors are focusing more on the domestic. We see the CSI 300’s next support at its 50-DMA (~3,800) and immediate resistance at September highs (~4,000). We reiterate the importance of heavy trading volume to confirm a strong rally. Until then, investors are advised to stay patient and focus on leading stocks that have good earnings estimates and have recently broken out.
