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.

 

  • European indices staged a v-shaped recovery, maintaining its upward momentum following a sharp decline in early August. Belgium, Germany and Switzerland clocked fresh 52-week highs and thus, were moved recently to a Confirmed Uptrend. The U.K., Spain, Finland, Austria, Italy, Sweden, and Norway are trading 1–2% off 52-week highs. All indices except France are now trading above 50- and 200-DMA. France’s CAC also made a strong recovery, retaking its 50-DMA but the index is still trading below its 200-DMA, 8% off 52-week highs.
  • We recommend adding risks as the indices continue to remain constructive above key moving averages and nearing 52-week highs. Focus on quality ideas with good O’Neil quantitative metrics and strong industry groups emerging out from proper bases or bouncing off key support levels.
  • Sectors closed positive last week except Energy (-0.1%) and Retail (-0.1%). Health Care, Staples, Utility, Capital Equipment, Basic Material, and Financial closed 1–2% higher. Technology was up 0.6% while Cyclicals closed flat. On our rotation graph, Health Care, Financial, and Retail remained in the best quadrant, exhibiting positive momentum. Staple, Utility, and Transportation also showed positive short-term momentum. Technology, Cyclicals, Materials, and Energy showed negative short-term momentum and remained in the worst quadrant.
  • Market breadth continued to improve last week reflected by the rising number of stocks basing, forming the right side of a consolidation on improving technical or breaking out of consolidation (refer from Sector Score Cards from page 9 to 20). Stocks of interests include: Oci (OCIO.NL), Elis (ELIS.FR), Lifco (LIFC.SE), Novartis (NOVN.CH), Pandora (PND.DK), and Auto Trader (AUTO.GB).
  • From our Focus List, actionable ideas include Biotage (BIOT.SE), Inditex (IND.ES), Lonza Group (LONN.CH), Premier Foods (PFD.GB), Nkt (NKT.DK), Relx (REL.GB), Swedish Orphan Biovitrum (SOBI.SE), 3i Group (III.GB), Galderma (GALD.CH), and recent addition Novozymes (NZY.DK).

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.

 

  • With the prospects of September rate cuts back on the table, the U.S. markets have staged a strong recovery and are trading back near highs. With the labor market weakening in the Eurozone and wage growth slowing in the past three months through June, markets expect a second rate cut by the ECB when the policymakers meet in September. Behind the optimism of rate cuts in Europe and the U.S., the Stoxx 600 has rallied from August 5 lows to reclaim its key moving averages and now trades 141 bps below the early June highs. Nevertheless, most of the 16 indices we cover in the region are still in a Rally Attempt. Without a follow-through day to confirm a new uptrend, we recommend a selective approach to adding names.
  • With the markets staging a recovery, leadership has emerged in pockets. For the second consecutive week, the number of stocks breaking out has improved, jumping to 481 from the prior week’s 140 but still far behind mid-July levels of 741 and early May levels of 1,212 when the Stoxx 600 was breaking into new highs. The number of stocks trading near the pivot of their bases has nearly doubled to 3.7K from 1.9K two weeks ago, while the number of bases that have failed has remained stable at ~800, down from 1,334 levels two weeks prior.

Sector Score Cards – Stocks of Interest (Top-rated names with the best technical setups – refer to pages 9–20):

  • Capital Equipment: Rolls-Royce Holdings (RR.GB, FL constituent), NKT (NKT.DK, FL constituent), RELX (REL.GB, FL constituent).
  • Consumer Cyclical: Ferrari (RACE.IT, FL constituent).
  • Consumer Staples: Premier Food (PFD.GB, FL constituent), AAK (AAK.SE), Galderma (GALD.CH, FL constituent).
  • Financials: 3i Group (III.GB, FL constituent), Swissquote ‘R’ (SQN.CH, FL constituent).
  • Healthcare: Swedish Orphan Biovitrum (SOBI.SE, FL constituent), Biotage (BIOT.SE, FL constituent), Lonza Group (LONN.CH, FL constituent), Alk-Abello (ALK.DK).
  • Retail: Inditex (IND.ES; FL constituent).

 

European Focus List Update:

  • Addition: Swedish Orphan Biovitrum (SOBI.SE; SOBI SS), Galderma (GALD.CH; GALD SW), 3i Group (III.GB; III LN).
  • Removal: None.

O’Neil Consumer/Retail Weekly

Posted on by Tristan d'Aboville

Consumer Staples (XLP): The index bounced off its 21-DMA and cleared $79.15 to make a new 52-week high. Prior to that, it broke
out of a stage-one consolidation of 40 days. RS line has again started to trend downward with weak technical ratings as the overall
market recovered after heavy correction in the first week of August 2024. Overall, the index has under-performed the broader market
in 2024.

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 indices staged a strong rebound from their recent lows. Markets in Belgium, Germany, Italy, Finland, Norway, Switzerland, and the U.K. have reclaimed their 50-day moving averages (DMA) and are now trading 1% to 5% below their 52-week highs. Ireland, the Netherlands, Portugal, and Austria are trading close to their 50-DMA, while France continues to lag behind its peers, trading approximately 10% off its highs and below both the 50- and 200-DMA. Watch for the indices to hold or retake the 50-DMA and consolidate. We recommend a gradual approach to adding risk as the indices show positive momentum. Focus on high-quality ideas with strong and improving quantitative metrics within robust markets and industry groups.
  • Sectors closed positively last week, driven by a strong, broad-based recovery in the indices. Technology, Financials, Retail, and Cyclicals outperformed. Materials, Staples, and Energy underperformed but still posted gains of 0.5% to 0.8%. On our rotation graph, Health Care and Financials remains in the best quadrant, exhibiting positive short-term momentum and outperforming over 26-week. Retail joined Health Care and Financials in the best quadrant with strengthening sector momentum. Staples, Utilities, Transportation, and Capital Equipment also show positive short-term momentum. Meanwhile, Technology, Cyclicals, Materials, and Energy still exhibit negative short-term momentum.

Sector Score Cards – Stocks of Interest (Top-rated names with the best technical setups – refer to pages 9–20):

  • Capital Equipment: Rheinmetall (RHMX.DE), Rolls-Royce Holdings (RR.GB, FL constituent), Nkt (NKT.DK, FL constituent), Relx (REL.GB, FL constituent).
  • Consumer Cyclical: Ferrari (RACE.IT, FL constituent).
  • Consumer Staples: Premier Food (PFD.GB, FL constituent), Hilton Food (HFG.GB), Galderma (GALD.CH).
  • Financials: Banca Monte Dei Paschi (BMPS.IT), Bridgepoint (BPT.GB).
  • Health Care: Vimian (VIMG.SE, FL constituent), Biotage (BIOT.SE, FL constituent), Lonza Group (LONN.CH, FL constituent), Bavarian (BAV.DK).
  • Utilities: Acea (ACE.IT).

European Focus List Update:

  • Addition: Vimian Group (VIMG.SE).
  • Removal: None.

O’Neil Consumer/Retail Weekly

Posted on by Tristan d'Aboville

Consumer Staples (XLP): The index gained 1% though the week finding strong support at its near-term moving averages on good volume. It is trading 1% off-highs. RS line has been trending downwards with RS Rating of 66 slightly due to a weak broader market. Acc/Dist Rating has been improving over the last three weeks

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 rose 60 bps over the past week, staging a minor recovery from the sharp profit booking a week prior. The index has reclaimed its 200-DMA (1% below) and is now attempting to reclaim the 10-DMA (24 bps above). It faces additional overhead resistance from the declining 21-DMA (159 bps above) and the converging 50-DMA (254 bps above) and 100-DMA (266 bps above). As consumer spending has come under pressure, investors are looking forward to the producer and consumer price data from the U.S., due on Tuesday and Wednesday, to determine the possibility of a rate cut in September.
  • Leadership in the market remains narrow as the number of stocks breaking out continues to plummet, hitting 134 on Friday from mid-July levels of 744 and nearing mid-April lows of 92. The number of bases failing has also surged to 1,340 from July 19 levels of 583. Major markets remain choppy and could run into resistance from declining short- and mid-term moving averages. We recommend investors remain patient and be ready to allocate capital toward defensive stocks in case of a hotter-than-expected CPI print).

Sector Score Cards – Stocks of Interest (Top-rated names with best technical setups – refer to pages 9–20):

  • Consumer Cyclical: Rational (RAAX.DE).
  • Consumer Staple: Essity (ESSI.SE), Premier Food (PFD.GB, FL constituent), Lotus Bakeries (LBAK.BE), Hilton Food (HFG.GB).
  • Financial: Beazley (BEX.GB).
  • Healthcare: H Lundbeck B (HLB.DK, EFL constituent), Vitrolife (VITR.SE, EFL constituent), Camurus (CAMX.SE, EFL constituent), Ambu (AMB.DK, EFL constituent), Orion (ORNB.FI), Cosmo Pharmaceuticals (COPN.CH).

European Focus List Update:

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 markets weakened after a brief rally, on the back of heightened recession fears in U.S. after unemployment rate jumped to three-year high in July amid a slowdown in hiring. France continues to lag its peers and is trading ~15% off highs, below all key logical supports. All indices have accelerated their decline and are breaching key moving averages as the sell-oof intensifies. Look for the indices to hold/retake long term support levels including 200-DMA. Technology and energy lagged the market, while healthcare continues to remain constructive with positive short-term momentum.
  • We remain cautious on the overall market as indices remain vulnerable to the on the downside. We recommend investors reduce positions in names that are breaking below logical levels of support. Increase exposure only to defensive sectors emerging out of proper early-stage bases.
  • Sectors closed negative last week, except utility which 0.3% higher. Technology, Financial and Cyclicals lagged the most, with a decline of ~4.5% each while retail. Health Care, Staple and Energy though posted weekly decline, outperformed the broader market. On our rotation graph, sectoral performance remained mixed. Health Care remained in the best quadrant, exhibiting positive short-term momentum. Financial and Cyclical joined Health Care in the best quadrant with strengthening sector momentum. Utility, Staple, Retail, and Capital Equipment also showed positive short-term momentum. Technology and Energy showed negative short-term momentum.
  • Sector Score Cards – Stocks of Interest (Top-rated names with best technical setups – refer to pages 9–20):
    • Capital Equipment: Viscofan (VIS.ES), Relx (REL.GB; REL:LN).
    • Consumer Staple: Essity (ESSI.SE), Lindt (LISP.CH), Kerry Group (KRZ.IE).
    • Health Care: H Lundbeck B (HLB.DK, EFL constituent), Vitrolife (VITR.SE, EFL constituent), Biotage (BIOT.SE, EFL constituent), Siegfried ‘R’ (SFZN.CH, EFL constituent).
  • European Focus List Update:
    • Addition: None.
    • 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.

 

Last week, the Stoxx 600 closed the week 55 bps higher than the prior week. The index remains in a Downtrend. It closed the week with resistance at the 100-DMA and overhead supply from the near-term moving averages (21-DMA; 12 bps higher, and 50-DMA; 80 bps higher). We expect volatility in upcoming sessions as investors digest earnings against the backdrop of a potential dovish stance from the U.S. and U.K. central banks and continuing weakness in the Chinese economy. If the market reaches a new high in the coming sessions, the index will return to a Confirmed Uptrend. Conversely, a sharp rejection from key moving averages with increasing distribution would signal negative technical action, leading to potential further downside risk.

 

Leadership in European markets has narrowed as the number of breakouts has more than halved in two weeks, while the number of stocks trading near the pivot has declined by more than a third since the start of July. Defensive sectors like Utility, Health Care, and Retail have led gains this week, while Technology and Consumer Discretionary struggled. With short-term momentum shifting toward defensive areas, we recommend investors reduce positions in names breaking below logical levels of support and increase exposure to defensive sectors within constructive markets.

 

Sector Score Cards – Stocks of Interest (Top-rated names with best technical setups – refer to pages 9–20):

  • Capital Equipment: Nexans (NXS.FR), Kronecranes (KCR1X.FI), Relx (REL.GB, FL constituent).
  • Consumer Cyclical: Tyman (TYMN.GB), Adidas (ADSX.DE, FL constituent).
  • Consumer Staple: Premier Food (PFD.GB, FL constituent), Coca-Cola Hbc (CCH.GB).
  • Financial: Banco De Sabadell (BSAB.ES), Quilter (QLT.GB).
  • Healthcare: Lonza (LONN.CH, FL constituent), Biotage (BIOT.SE, FL constituent).
  • Retail: Compass Group (CPG.GB).

 

European Focus List Update: