Consumer Staples (XLP): The index has found strong support at its 50-DMA. It is trading above all the key moving averages and sits
1% below pivot. RS line is trending downward with weak technical ratings demonstrating its under performance with respect to
broader market in 2024
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
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- The Stoxx 600 remains in an Uptrend Under Pressure, with six distribution days. Last week, the index gained 145 bps, now trading 119 bps above its 50-day moving average (DMA) and 28 basis points away from its all-time high. It managed to retake its 50-DMA—a key resistance level since mid-June—albeit on low volume. Currently all major markets trade above their key moving averages, except Ireland (24 bps below 100-DMA), Finland (94bps below its 50-DMA) and the U.K (10 bps below) and are starting to trend toward their all-time highs. If the market reaches a new high in the coming sessions, the index will return to a confirmed uptrend. Conversely, a break below the 50-DMA with increasing distribution would signal negative technical action, leading to potential further downside risk.
- Retail, Health Care, Capital Equipment, and Travel and Leisure stocks led the gain last week, while Technology and Energy lagged. However, on our rotation chart, Technology, Utilities and Retail show improving short-term momentum (four weeks duration). Defensive Staples’ and Health Care’s positive momentum have been fading.
- Sector Score Cards – Stocks of Interest (Top-rated names with best technical setups – refer to pages 9–20):
- Basic Resources: Sol (SOL.IT).
- Capital Equipment: Beijer Ref AB (SKTF.SE), NKT (NKT.DK, EFL constituent), AQ Group (AQ.SE), Relx (REL.GB, EFL constituent).
- Consumer Cyclical: Technogym (TGYM.IT, EFL constituent), Volution Group (FAN.GB), Lagardère Groupe (MMB.FR), Vivendi (EX@F.FR), Lottomatica (LOTG.IT, FL constituent).
- Consumer Staple: Premier Food (PFD.GB, FL constituent), Cranswick (CWK.GB).
- Financial: Lloyds (LLOY.GB), Unipol (UNI.IT).
- Healthcare: Siegfried ‘R’ (SFZN.CH, EFL constituent), H Lundbeck B (HLB.DK, EFL constituent).
- Technology: Hemnet (HEMN.SE, EFL constituent), ASML Holding (ASML.NL, EFL constituent), Be Semiconductor (BESI.NL EFL, constituent), Vat Group (VACN.CH, EFL constituent).
- Energy: Aker Solutions (AKSO.NO).
- European Focus List Update
European Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
Key points:
- European markets remained volatile amid election results in major countries. The Stoxx 600 gained ~100 bps and reclaimed its 50-DMA. It remains in an Uptrend Under Pressure with six distribution days. We are cautiously optimistic about the overall market as several indices bounced off their recent lows. After staging a constructive rally, Austria, Belgium, and Germany retook their 50-DMA. Denmark, the Netherlands, and Switzerland remain constructive and are trading above their 50-DMA. The remaining markets are trading below their 50-DMA, with France testing support at the 200-DMA.
- Sectors closed mostly positive last week, with all sectors posting weekly gains except Health Care. Utility and Transportation led the gains, while Health Care, Staple, Cyclical, and Retail lagged. On our rotation graph, sectoral performance is broadly negative with most sectors showing deterioration in short-term momentum. Defensive sectors, including Consumer Staple and Health Care, took a break after a positive short-term momentum in the last few weeks. Meanwhile, Technology showed positive momentum and joined Health Care in the best quadrant. Underperforming sectors, including Retail and Utility, also showed positive short-term momentum.
- Sector Score Cards – Stocks of Interest (Top-rated names with best technical setups – refer to pages 9–20):
- Basic Resources: Centamin (CEY.GB).
- Capital Equipment: Beijer Ref AB (SKTF.SE), NKT (NKT.DK, EFL constituent), AQ Group (AQ.SE), Relx (REL.GB, EFL constituent), Saab (SAAB.SE, EFL constituent).
- Consumer Cyclical: Technogym (TGYM.IT, EFL constituent), Cairn Homes (C5H.IE), Volution Group (FAN.GB).
- Financial: Lloyds (LLOY.GB), Bawag Group (BWGP.AT), Bper Banca (BPE.IT).
- Healthcare: Ambu (AMB.DK), Siegfried ‘R’ (SFZN.CH, EFL constituent), H Lundbeck B (HLB.DK, EFL constituent).
- Technology: Hemnet (HEMN.SE, EFL constituent), ASML Holding (ASML.NL, EFL constituent), Be Semiconductor (BESI.NL EFL, constituent), Vat Group (VACN.CH, EFL constituent).
- Transporation: Wilhs. Wilhelmsen (WWI.NO).
- European Focus List Update:
O’Neil Consumer/Retail Weekly
Consumer Staples (XLP): The index continues to consolidate around its 50-DMA. It has found support at $75.73 and is facing
immediate resistance at its 50-DMA. RS line is trending downward with weak technical ratings. A break above $78.6 should be bullish
for the index.
European Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- The Stoxx 600 is in an Uptrend Under Pressure with six distribution days. The index lost 72 bps last week as investors continued to reduce exposure to the region ahead of the key election in France over the weekend. The French CAC 40 remains weak and was again among the worst performing indices, closing the prior week 9% off its 52-week high.
- However, post the first round it was clear that despite leading the first round of the snap election, the right-wing National Rally party will struggle to gain absolute majority in following rounds and hence markets opened higher today with the CAC 40 stocks jumping 2.8% at the open.
- Sectors: Energy led the gains last week; but our rotation chart also continues to capture short-term momentum improving among Technology and the defensive sectors like Health Care.
- Sector Score Cards – Stocks of Interest (Top-rated names with best technical setups – refer pages 9–20):
- Basic Resources: Centamin (CEY.GB).
- Capital Equipment: Huhtamaki (HUIF.FI), Nkt (NKT.DK, EFL constituent), VAT Group (VACN.CH – EFL constituent). Relx (REL.GB, EFL Constituent).
- Consumer Cyclical : Technogym (TGYM.IT, EFL constituent).
- Financial: Deutsche Boerse (DB1X.DE), Talanx Aktgsf (TLXX.DE, EFL constituent).
- Health Care: Ambu (AMB.DK), Siegfried ‘R’ (SFZN.CH, EFL constituent).
- Retail: Class Ohlson B (CLAS.SE), Inditex (IND.ES, EFL constituent).
- Technology: Hemnet (HEMN.SE), Scout24 (G24X.DE).
- Transporation: Wallenius (WWL.NO).
- European Focus List Update:
O’Neil Consumer/Retail Weekly
Consumer Staples (XLP): The index continues to consolidate around $78 price level and is currently testing support at its 21-DMA. A
break above $78.6 should be constructive for the index . However, the RS line continues to trend downward with weak technical
ratings. A/D Rating has deteriorated in the last few weeks as the index consolidated.
European Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- European markets saw a slight uptick last week, recovering some of the previous week’s losses. Most markets remain below their respective 50-day moving averages (50-DMA), except for Denmark, the Netherlands, and Switzerland, which are testing support at their 21-DMA. For a more positive outlook, markets need to reclaim and consolidate above their 50-DMA without accumulating additional distribution days. All sectors, except Health Care and Consumer Staple, showed negative short-term momentum.
- We remain cautious as most indices are below their 50-DMA. France and Italy are notably weak, trading 9–10% off their 52-week highs, with the 200-DMA as the next support level. Denmark, the Netherlands, and Switzerland maintain a constructive stance, supported by their short-term moving averages. We advise reducing positions in stocks falling below key support levels and increasing exposure to defensive sectors within stronger markets.
- Sectors closed mostly positive last week, pairing some of the losses after a strong decline in the prior week. Retail and Financial led gains, while Health Care and Consumer Staple lagged. On our rotation graph, sectoral performance is broadly negative, with most sectors showing deterioration in short-term momentum. Defensive sectors, including Consumer Staple and Health Care, were an outlier with positive short-term momentum. Health Care continues to remain steady and has been trending in the best quadrant for the last few weeks. Technology also showed positive momentum. Cyclical joined Financial, Retail, and Utility in the worst quadrant with negative short-term momentum.
- Sector Score Cards – Stocks of Interest (Top-rated names with best technical setups – refer pages 9–20): With most markets in a downtrend, breakout opportunities are limited. However, several stocks are basing and should be monitored for potential uptrends and leadership emergence.
- Capital Equipment: Indutrade (INDT.SE) and Huhtamaki (HUIF.FI) are forming bases. VAT Group (VACN.CH – EFL constituent) is actionable with support at the rising 21-DMA.
- Financial: Deutsche Boerse (DB1X.DE) is close to a pivot at €194.55, trading 1% away.
- Healthcare: Zealand Pharma (ZEA.DK) is breaking out of a 14-week consolidation base. Ambu (AMB.DK) is overcoming a long resistance level at DKK123-125.
- Retail: Class Ohlson B (CLAS.SE) is breaking out of a 72-day cup formation. Inditex (IND.ES, EFL constituent) is breaking above the €47 resistance level and is actionable.
- Technology: ASML (ASML.NL, EFL constituent) is actionable. Be Semi (BESI.NL, EFL constituent) is forming the handle of a cup-with-handle formation, trading 5% from the pivot at €162.
- European Focus List Update:
- Addition: None.
- Removal: None.
O’Neil Consumer/Retail Weekly
Consumer Staples (XLP): The index found support at its 50-DMA and has regained its 21-DMA. Next resistance level is $78.61(1%
above). RS line is trending downward with weak technical ratings. Acc/Dist. Rating has deteriorated in the last few weeks as the index
consolidated.
European Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
Key points:
- The Stoxx 600 declined 2.4% last week, breaching its 50-DMA for the first time since April. Markets are experiencing high volatility following the European Parliament elections. With the breach of the 50-DMA, the Stoxx 600 was shifted down to an Uptrend Under Pressure. The next level of support is at the 100-DMA (1.1% below).
- Out of the 16 key indices we cover in the region, 10 are in a Downtrend. Distribution rose to 4.3. Due to the pullback, we are seeing dwindling leadership across Europe, with the number of stocks breaking out nosediving from mid-May levels while there has been a sharp increase in failed bases. We recommend investors reduce positions in names that are breaking below logical levels of support.
- All sectors shed their gains last week, with transportation, discretionary, and banking stocks suffering the most losses. Defensive sectors, such as Health Care and Staple, are gaining short-term momentum on a relative basis. Within the Financial space, Banks (Stoxx 600 Banks; EXV1.DE) declined over 5.5% and fell below the 50-DMA for the first time since February. The Italian FTSE MIB and the French CAC40 are heavily weighted toward banking; hence, they were the worst performers on Friday, declining 281 bps and 266 bps, respectively. The CAC40, already in a Correction, continues to trend downward and has broken below its 200-DMA. The FSTE MIB breached its 100-DMA on heavy volume and was downgraded to a Correction.
- European Focus List Update:
O’Neil Consumer/Retail Weekly
Consumer Staples (XLP): The index is testing support at its 21-DMA post breaking out of a stage-one consolidation. RS line is
trending downward with weak technical ratings. However, A/D Rating has shown improved momentum in the last few weeks.
