Consumer Staples (XLP): The index is facing resistance at the pivot price level of a stage-one, saucer base. It has
broken below its 21-DMA on slightly higher volume. RS line has been trending sideways with RS Rating of 74. A/D
Rating has lost momentum in the last few weeks.
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 a Confirmed Uptrend with three distribution days. The major indices have been consolidating since mid-April, and this was also true for last week. The major indices are trading in a tight range without a defined direction amid economic data and corporate earnings.
- We recommend a selective approach to adding risk. Focus on high relative strength ideas that are part of leading and/or improving industry groups and breaking out of proper bases with volume.
- Sectors had marginal moves on either side, with Health Care leading the gains while Staple led the decline. On our rotation chart, Tech stands out in terms of improvement in its short-term momentum as it moved to the best quadrant. Other than Tech, no other sector is in the best quadrant. Health Care and Staple are holding their short-term momentum, while all the others have either paused or showed a decline in their short-term momentum (over four weeks).
- Stocks of interest from our Sector Score Cards:
- In Health Care (Page 16), Lundbeck (HLB.DK) was added to our Focus List last week; the stock is actionable after breaking out of consolidation and is among the top 15 best rated names in the sector (Composite Rating of 92).
- In Transportation (Page 19), IHG (IHG.GB) is forming the right side of a base (basing) on improving technical indicators and the stock is the best rated name in the sector in terms of both fundamental and technical profiles (Composite Rating of 99).
- European Focus List Update:
- Actionable names include H Lundbeck B (HLB.DK; HLUNB DC), Amadeus It Group (AMS.ES; AMS SM ), Ferrari (Mil) (RACE.IT; RACE IM), Swissquote (SQN.CH; SQN SW), Nibe Industrier (NIBE.SE; NIBEB SS ), Evolution (EVOG.SE ; EVO SS ), Dino Polska Sa (DIP.PL; DNP PW), Deutsche Boerse (Xet) (DB1X.DE; DB1 GR), Straumann Hldg. (STMN.CH; STMN SW), and Edenred (EDEN.FR; EDEN FP).
- Addition: H Lundbeck B (HLB.DK); Amadeus It Group (AMS.ES)
- Removal: Swedish Orphan Biovitrum (SOBI.SE)
O’Neil Consumer/Retail Weekly
Consumer Staples (XLP): The index has given up 0.7% over the past week as it continues to consolidate while
testing support at its 21-DMA. We continue to recommend an equal weighting towards the sector as we wait for market
direction after the earnings season. The 21-DMA support is followed by 50-DMA (3% below) and 200-DMA (4% below).
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 a Confirmed Uptrend with two distribution days. The major indices recovered weekly losses and are acting constructively as markets digest corporate earnings, economic data, and central bank commentary during the week.
- We recommend an incremental approach to risk. Focus on high relative strength ideas that are part of leading and/or improving industry groups and breaking out of proper bases with volume.
- Sectors had marginal moves on either side, with Health Care leading the gains while Transportation led the decline. On our rotation chart, Technology stands out in terms of improvement in its short-term momentum, as it is moving toward the best quadrant. Cyclical, Retail, and Utility are in the best quadrant and have taken a pause in their momentum. Capital Equipment and Transportation have started to show a decline in their short-term momentum (over four weeks).
- European Focus List Update:
- Actionable names include Swissquote (SQN.CH; SQN SW), Swedish Orphan Biovitrum (SOBI.SE; SOBI SS), Dino Polska SA (DIP.PL; DNP PW), Deutsche Boerse (Xet) (DB1X.DE; DB1 GR), Burckhardt Compression Holding. (BCHN.CH; BCHN SW), Straumann Holding (STMN.CH; STMN SW), Ferrari (Mil) (RACE.IT; RACE IM), Compass Group (CPG.GB; CPG LN), and Edenred (EDEN.FR; EDEN FP).
- Addition: None
- Removal: None
O’Neil Consumer/Retail Weekly
Consumer Staples (XLP): The index is facing resistance at the pivot price level of a stage-one, saucer base. RS line
has been trending sideways with RS Rating gradually improving from 76 to 79 in the last two weeks. A/D Rating
continues to remain strong and indicates accumulation.
O’Neil Consumer/Retail Weekly
Consumer Staples (XLP): The index, after clearing multiple supply levels in recent weeks, is facing resistance at the
pivot price level of $77.6, forming a downside reversal on high volume. The RS line continues to remain choppy. However,
A/D Rating has shown strong acceleration in recent weeks.
O’Neil Consumer/Retail Weekly
Consumer Staples (XLP): The index continues to move sideways post clearing $74.6 overhead supply level. Volumes continue to remain low. The next two overhead supply levels are at $76.25 and $77.6. RS line has been trending sideways with RS Rating of 64 and A/D Rating of B.
European Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- The Stoxx 600 was shifted to a Confirmed Uptrend after the index hit fresh 52-week highs on Friday. We are seeing constructive technical action on many majors as they make fresh 52-week highs, even though they did not post a follow-through day. Luxury good stocks helped the rally with bellwethers, such as LVMH (FL constituent) and Hermes, posting a strong print and outlook. Macroeconomic data also supported the run, with Germany’s annual wholesale inflation rate easing in March and CPI in Spain and France softening in March from the prior month.
- We recommend an incremental approach to risk with a focus on high relative strength ideas that are part of leading and/or improving industry groups.
- Cyclical and Transportation sectors were clear winners last week, while Utility led the decline. On our rotation chart, Technology, Cyclical, and Retail are showing improvements in their short-term momentum. Energy and Financial, even though not in the best quadrant, are showing improvement in their short-term momentum. All other sectors are lagging in their short-term momentum (over four weeks).
- European Focus List Update:
- Actionable names include Deutsche Boerse (Xet) (DB1X.DE; DB1 GR), Asm International (ASIN.NL; ASM NA), Nibe Industrier (NIBE.SE; NIBEB SS), Infineon Technologies (Xet) (IFXX.DE; IFX GR), Dino Polska Sa (DIP.PL; DNP PW), Straumann Holding (STMN.CH; STMN SW), Edenred (EDEN.FR; EDEN FP), Evolution (EVOG.SE; EVO SS), Ferrari (Mil) (RACE.IT; RACE IM), Wolters Kluwer (WSG.NL; WKL NA), Compass Group (CPG.GB; CPG LN), Asml Holding (ASML.NL; ASML NA), and Swedish Orphan Biovitrum (SOBI.SE; SOBI SS).
European Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- We are yet to see a follow-through day on the Stoxx 600. Majority of the indices in Europe are in a Rally Attempt. European Equities had a muted week, with most ending flat on a close-to-close basis. Most majors have held their support levels and key moving averages since bouncing off their March 20 lows.
- We recommend a cautious but selective approach to adding risk, with a focus on high relative strength ideas that are part of leading and/or improving industry groups.
- Sector participation was mixed. Energy and Utility led the advance, while Transportation and Capital Equipment led the decline. On our rotation chart, Consumer Staple, Technology, and Retail are showing improvements in their short-term momentum. All other sectors are lagging in their short-term momentum (over four weeks).
- European Focus List Update:
- Actionable names include Deutsche Boerse (Xet) (DB1X.DE; DB1 GR), ASM International (ASIN.NL; ASM NA), Straumann Holding (STMN.CH; STMN SW), Edenred (EDEN.FR; EDEN FP), Evolution (EVOG.SE; EVO SS), Ferrari (Mil) (RACE.IT; RACE IM), Wolters Kluwer (WSG.NL; WKL NA), Compass Group (CPG.GB; CPG LN), ASML Holding (ASML.NL; ASML NA), and Swedish Orphan Biovitrum (SOBI.SE; SOBI SS).
- Addition: ASM International (ASIN.NL)
- Removal: Sika (SIKA.CH)
O’Neil Consumer/Retail Weekly
Consumer Staples (XLP): The index has regained its 50-DMA though volume was below average. RS line continues to
trend sideways but remains significantly below its December 2022 levels. A decisive breakout above $77.6 will indicate
sustained buying pressure.
