Author: Tristan d'Aboville

Tristan d’Aboville is an Executive Director, Research Analyst, managing the European Research Product. Mr. d’Aboville has more than 16 years of experience in equity research and sales. Since joining the firm in 2012, he has applied his client-centric style with analysts and portfolio managers, anticipating and exceeding their needs. He writes the well-received weekly European commentary, and follows it with a client conference call to discuss findings. Prior to William O’Neil + Co., Mr. d’Aboville was a top-producing salesperson at Kepler Capital Markets, formerly known as Julius Baer, and at Natixis Bleichroeder, covering European equities for large U.S. institutional clients. He started his career as an equity analyst at Aurel-BGC, later moving to Natixis Bleichroeder, where he became the lead analyst for the European Hotels, Leisure and Catering Sector. He was recognized as a Top Analyst for Predictability & Recommendations by AQ Publications in 2003. Extel named him one of the top three European analysts covering the business services and hotel & leisure industries. Prior to the securities industry, Mr. D’Aboville was an auditor with Arthur Anderson. Mr. d’Aboville earned a Master of Science in Managerial and Financial Economics from ISC Paris School of Management. Later, he studied Global Affairs at New York University. He is a Certified International Investment Analyst (CIIA). A sportif, Mr. d’Aboville enjoys kite surfing, sailing, skiing, tennis, chess, and spending as much of his free time as possible with his wife, young daughter, and son.

European Weekly Summary

Posted on by Tristan d'Aboville

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The Stoxx 600 (EXSA.DE) was shifted to an Uptrend Under Pressure after the index breached its 21-DMA on rising distribution. Most European markets are pulling back from 52-week highs to their short-term moving averages. Germany, Finland, Austria, Spain, Belgium, and the Netherlands declined 1–3%, breaching their 21-DMA and subsequently were also moved to an Uptrend Under Pressure. On the positive side, Norway gained 3%, hitting a fresh 52-week high, while the U.K. and Portugal were slightly up and trending at a 52-week high. Denmark also outperformed, gaining ~2.5%, and retook resistance at 100-DMA, 35% off highs. France, Sweden, and Switzerland continue to underperform, 8–11% off 52-week highs and are set to test support at their 50-/200-DMA. The average distribution day increased to 4.2 from 3.3 last week.
  • Last week, sector performance was mostly negative except for Energy (+5.2%), Utility (+1.5%), and Health Care (+0.7%). Financial (-3.0%) lagged the most, followed by Technology (-2.6%) and Retail (- 2.2%). The remaining sectors were down 1–2%.
    • On the daily Datagraph@, the iShares Djsxx.600 Oil & Gas (EXH1.DE) is breaking out of a cup-with-handle formation; stocks of interest related to the industry include Weir Group (WEIR.GB) and Gtt (GTT.FR).
    • Form our rotation chart, momentum in lagging (over 26-weeks) Health Care continues to improve; stocks of interest include: Ypsomed (YPSN.CH) and Eurofins (EUF.FR) are currently basing on improving technical characteristics. Refer to page 14.
  • We turn cautious on the European markets as indices are extended with elevated distribution day counts and showing early signs of weakness. We recommend calculated risks when adding new ideas, as indices are breaking their first level of support. Reduce exposure in stocks that are extended or breaking key support levels/moving averages. Focus on ideas emerging from proper early-stage bases in constructive markets and sectors.

European Weekly Summary

Posted on by Tristan d'Aboville

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The Stoxx 600 gained ~0.8% last week, bouncing off its short-term moving averages. The index remains in a Confirmed Uptrend with three distribution days. Key resistance to watch is its all-time high, which is 2% above Friday’s close. A majority of European markets are in a Confirmed Uptrend, with the average number of distribution days still at three. France’s CAC 40 remains Under Pressure, although its distribution count has declined to seven. Germany’s DAX 40, trading just 0.7% off its highs, continues to be one of the region’s leading indices. Denmark was the best-performing country, though still trading 36% below its highs; the index is in a Confirmed Uptrend with four distribution days.
  • Sector performance was mostly positive last week, with Utilities (-0.2%) and Consumer Cyclical (-1.1%) the only decliners. Health Care, Transportation, Technology, and Energy gained between 2.0% and 2.5%, while the remaining sectors were up 0.5% to 1.5%.
  • From our rotation chart, Health Care continues to regain short-term momentum, bouncing from oversold levels. Top-rated names such as Ypsomed (YPSN.CH), Clariane (KORI.FR), and Swedish Orphan (SOBI.SE) are currently building the right side of a base, showing improving technical characteristics.
  • Leaderships continue to emerge from: Capital Equipment: actionable this week include Sulzer (SUN.CH) and Safran (FL constituent, SGM.FR); Financials: actionable ideas include Adyen (ADYE.NL, FL constituent), Intesa (ISP.IT), and Standard Chartered (STAN.GB).
  • European Focus List Update:
    • Actionable names include Adyen (ADYE.NL), Alk-Abello B (ALK.DK), Bawag Group (BWGP.AT), Nemetschek (NEMX.DE), Premier Foods (PFD.GB), Sap (Xet) (SAPX.DE), Safran (SGM.FR), and Wise A (WISE.GB).
    • Addition: Nemetschek (XET) (NEMX.DE) and Wise A (WISE.GB).

Removal: None.

European Weekly Summary

Posted on by Tristan d'Aboville

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The Stoxx 600 (EXSA.DE) remains in a Confirmed Uptrend with three distribution days. It is currently trading at immediate support along its rising 21-DMA and facing resistance at its March 3 highs, approximately 3% above current levels. Last week, European indices posted modest gains on average. Germany rose 1.5% and now sits just 1% below its 52-week high, while Italy gained 1.7%, also 1% off its high. Belgium reached a new 52-week high with a 1.4% gain. France and Switzerland saw choppy sessions, both up 0.2%; however, France remains 6% below its 52-week high with a high distribution count (8 DD), and Switzerland is still 7% off, facing resistance at its 100-DMA. Spain rose 0.3% in a volatile week, testing support at its 10-DMA and sitting 2% below its high. The Stoxx 600, along with the UK (+0.8%), Austria (+0.9%), Portugal (+0.7%), and Ireland (+1.25%), consolidated around their 10-DMAs, each trading roughly 1% below their respective 52-week highs.

O’Neil Consumer/Retail Weekly

Posted on by Tristan d'Aboville

Consumer Staples (XLP): The index rose ~0.9% in the past one week. It pulled back slightly toward the beginning of the week but bounced
off the confluence of its 50- and 200-DMA. It is forming a stage-one flat base with a pivot of $84.3 (+2%). Support is at its 21-DMA (-1%),
followed by its 50-DMA (-2%)

European Weekly Summary

Posted on by Tristan d'Aboville

Key points from this week’s report:
Please refer to the attached PDF for the full report.
Europe’s main benchmark, the Stoxx 600, posted its first weekly decline in six weeks, falling ~75bps and adding three
distribution days. The index pulled back to its 10- and 21-day moving averages but remains constructive, trading above all key
mid- and long-term moving averages. Currently 2% below its 52-week high, it is forming the right side of a stage-one
consolidation. Key support lies at the 21-DMA (~1% lower), followed by the 50-DMA (~3% lower).
At the country level, Denmark was upgraded to a Confirmed Uptrend, while France was downgraded to Uptrend Under
Pressure. Of the 16 markets we track, 12 are in a Confirmed Uptrend, three are in a Rally Attempt, and one (France) is in an
Uptrend Under Pressure. The average distribution day count increased to 3.
Sector performance was mostly negative except the defensive sectors including Utility (+2.4%), Consumer Staple (+0.8%)
and Health Care (+0.4%). Consumer Cyclical (-4.1%) lagged the most followed by Energy (-3.0%). Transportation, Financial,
and Retail declined 1–1.7%. Rest of the sectors closed 0.2–0.8% lower.

O’Neil Consumer/Retail Weekly

Posted on by Tristan d'Aboville

Consumer Staples (XLP): The index rose ~3.9% in the past one week and reclaimed all its key moving averages. It is forming a stage-one flat base and sits 2% below the pivot of $84.35. Support is at the confluence of its 21- and 50-DMA (-2%), followed by its 100-DMA (-3%).

European Weekly Summary

Posted on by Tristan d'Aboville

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • European equities continued to rally last week, closing the prior week with a gain of 2.1%. The Stoxx600 is trading constructively along its rising 10-DMA (1% below) as it forms the right side of a stage-one consolidation. It now trades only 3% below the pivot and off March 3 highs. Next support: Converging 50-DMA and 100-DMA (-3%) and rising 21-DMA (-4%). The index could face possible resistance around the 558 level (1.6% above). Investors can start building positions as the index rises above the price point and then add to positions further as it breaks into new highs.
  • Investors are digesting mixed corporate earnings, key economic data, and geopolitical developments. Markets reacted to the U.S. and China agreeing to roll back most of the recently imposed tariffs as both parties work towards a trade deal. U.S. and Iran working toward a potential nuclear deal hurt shares of companies in the energy sector while Germany backing 5% NATO defense spending target led to a rally in European defense stocks. Eurozone employment rose 0.3% q/q and 0.8% y/y in Q1 while industrial production jumped 2.6% m/m in March. Germany’s economic sentiment and U.K.’s GDP sharply outperformed Street estimates.
  • Breadth broadening with growth sectors participating: Stocks which are breaking out of their bases more than doubled last week over the prior week’s level. They are at the highest level since January 31 when the index had broken out of a stage-one flat base and followed with a 5% rally over a month into new all-time highs. The number of failed bases is now about a fifth of early April levels while the number of stocks trading near their pivot levels have steadily continued to increase from mid-April. This week, growth sectors led the market, with Transportation, Retail, Consumer Cyclical, and Technology all gaining over 3%. In contrast, defensive sectors such as Consumer Staples, Utilities, and Health Care lagged on a relative basis. Market breadth is improving, as growth sectors are now participating in the rally—a development we view as expected, given that Value had become overextended about a month ago.
  • European Focus List Update:
    • Actionable names include Medacta Group (MOVE.CH; MOVE:SW), SPIE (SPIE.FR; SPIE:FP), Games Workshop (GAW.GB; GAW:LN), Sap (Xet) (SAPX.DE; SAP:GR), and RELX (REL.GB; REL:LN).
    • Addition: Adyen (ADYE.NL; ADYEN NA) and Safran (SGM.FR; SAF FP).
    • Removal: None

O’Neil Consumer/Retail Weekly

Posted on by Tristan d'Aboville

Consumer Staples (XLP): The index declined ~1.7% in the past one week and broke below all key moving averages. Support is at $75.6 (-5.4%), followed by $72.9 (-9.6%).

Best-performing IGs: Good improvement in the Industry Group Rank of Beverages-Non-Alcoholic and Food- Misc Preparation over the last eight weeks, with the Rank improving to 18 from 80 and 44 from 107, respectively.

Worst-performing IGs: Food-Confectionary and Food-Grain and Related are the groups, which showed a decline of 36 and 38 spots, respectively, over the last four weeks. Beverages-Alcoholic and Soap & Clng Preparations are the other Industry Group with poor Industry Group Ranks