Consumer Staples (XLP): The index has risen back to its 40-WMA after breaking below its key moving averages. RS
line is trending downward with weak technical ratings as the sector has not participated in the January rally
Author: Tristan d'Aboville
European Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
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European Equities took a pause last week and moved sideways after two consecutive weeks of gains. Ten indices are in a Confirmed Uptrend while the STOXX 600 is in a Rally Attempt, pending a follow-through day. The indices have acted constructively near their moving averages in the last few weeks and the distribution count in Europe is at 2.8.
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We recommend an incremental but a selective approach to adding risk. Focus on high relative strength ideas that are part of leading and or improving industry groups.
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Over the past 5 days, Transportation has led the market and the sector is now one of the best-performing sectors over four-weeks. Healthcare momentum has continued to deteriorate further. On our rotation chart, Cyclicals, Financials, Basic Materials and Transportation are showing positive short-term improvements. Staples, Healthcare, and Tech, continue to show deteriorating short-term momentum (over four weeks).
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European Focus List Update:
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Actionable names include Nibe Industrier (NIBE.SE), Burckhardt Cmpsn.Hldg. (BCHN.CH), Ringkjobing Landbobank (RIL.DK), Epiroc A (EPIA.SE), Ashtead Group (AHT.GB), Asml Holding (ASML.NL), Bic (BIC.FR), Deutsche Telekom (Xet) (DTEX.DE), Terna Energy (TEN.GR), Evolution (EVOG.SE), Finecobank Spa (FCBK.IT) and Moncler (MONC.IT).
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Addition: Burckhardt Cmpsn.Hldg. (BCHN.CH), NIbe (NIBE.SE).
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Removal: None.
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O’Neil Consumer/Retail Weekly
Consumer Staples (XLP): The index continues to consolidate above its 200-DMA with volumes remaining high. A
decisive break above $77.6 will be bullish for the index. RS line has started to trend downward with weakening A/D Rating
and Up/Down volume ratio indicating distribution.
O’Neil Consumer/Retail Weekly
Consumer Staples (XLP): The index has found support at its 200- and 50-DMA in the last few sessions which coincides
with the pivot price level. Despite the recent sell off and decline in A/D Rating, RS line continues to remain resilient with a
RS Rating of 81.
O’Neil Consumer/Retail Weekly
Consumer Cyclical (XLY): The index is facing resistance along its declining 50-DMA and has breached the $132 level,
which has been acting as support since late June. Technical profile is declining and remains weak.
European Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
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The Stoxx 600 is in a Downtrend, along with four other indices. European equities recorded their second weekly decline since mid-October and had their worst weekly fall since late September. During the latter part of the week, majors breached their short-term moving averages and closed at or near their long-term moving averages. The continuing hawkish stance of the central banks has led to the decline. Majors we track were shifted to an Uptrend Under Pressure or a Downtrend in the last two sessions of the week. The distribution day count in Europe stands elevated at 5.1 from 3.1 last week.
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We recommend a cautious but selective approach to adding risk. Focus on high relative strength ideas that are part of leading and/or improving industry groups.
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All sectors recorded a decline, with Energy, Health Care, and Staple holding up relatively better, while Basic Material and Tech led the decline. On our rotation chart, Capital Equipment, Cyclicals, and Retail are still in the best quadrant but showing a slowdown in their short-term momentum. Staple and Transportation are showing positive improvements in their short-term momentum (over four weeks).
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European Focus List Update:
O’Neil Consumer/Retail Weekly
Consumer Staples (XLP): The index has traced back to its 21-DMA. It is trading constructively after breaking out of a
stage-one cup-with-handle base on good volume. The RS line is gradually ticking upwards with a strong RS Rating of 81.
O’Neil Consumer/Retail Weekly
Consumer Cyclical (XLY): The index is consolidating between the $145-$135 levels. After breaking support of the 50-
DMA on high volume, June lows should act as a support to the index over the next few weeks as the market anticipates
the economic data and Fed’s actions.
European Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- European equities gained last week, advancing for the seventh week in a row, marking the highest consecutive weekly gains this year. Most majors have acted constructively, post retaking their key moving averages in the last two weeks. Only three of the indices are in a Rally Attempt and the rest 14 are in a Confirmed Uptrend, along with the Stoxx 600.
- We recommend an incremental approach to adding risk, with a focus on high relative strength ideas that are part of leading and/or improving industry groups.
- Sector momentum was flat to marginally positive throughout the week. Retail and Cyclicals led the gain, while other sectors were flat to marginally in the green. On our rotation chart, Capital Equipment, Cyclicals, and Retail stand out, showing improvement in the short-term momentum while moving into the best quadrant. Energy, Staple, Tech, and Transportation lag in their short-term momentum (over four weeks).
- European Focus List Update:
- Actionable names include Evolution (EVOG.SE ; EVO SS ), Brunello Cucinelli (BC.IT ; BC IM ), Bank Of Ireland Group (BIRG.IE ; BIRG ID), Bic (BIC.FR; BB FP), Deutsche Telekom (Xet) (DTEX.DE; DTE:GR), Bic (BIC.FR ; BB FP), Edenred (EDEN.FR; EDEN FP), AstraZeneca (AZN.GB; AZN LN), Pearson (PSON.GB; PSON LN), LVMH (LVMH.FR, MC:FP), Ipsos (IPS.FR; IPS:FP), Jyske Bank (JYS.DK; JYSK:DC), Novo Nordisk ‘B’ (NON.DK; NOVOB;DC), and Rwe (Xet) (RWEX.DE ; RWE GR ), Moncler (MONC.IT; MONC IM), and Lancashire Holdings (LRE.GB; LRE LN).
- Addition: Evolution (EVOG.SE; EVO SS), Brunello Cucinelli (BC.IT ; BC IM )
O’Neil Consumer/Retail Weekly
Consumer Staples (XLP): The index is 7% off highs and has broken below key support level of $77.4. It continues to
trade above its key moving averages with solid technical ratings.
