Author: Vidhya M

Won Europe Today

Posted on by Vidhya M

Yesterday,

  • European markets closed in the red, declining sharply due to concerns of dogged inflation in Eurozone. Inflation in
    France hit a record high of 6.5% in June and ECB President Christine Lagarde mentioned that the bank will raise
    rates at a faster pace if needed to bring the inflation down to its target of 2%, raising fears of an economic
    slowdown among investors. We continue to recommend a cautious approach to adding risk. Remain defensive
    with a focus on high relative strength ideas that are part of leading and/or improving industry.
  • The Stoxx 600 corrected 150bps, while continuing to form the right side of a stage-one 11-week flat base, trading below its key support levels and 12% below the pivot. Auto, Banking, Oil, and Mining were among the biggest losers, declining 310bps, 276bps, 213bps, and 377bps, respectively. Among other major indices, France’s CAC, Germany’s DAX, and U.K.’s FTSE all closed in the red, declining 180bps, 169bps, and 196bps, respectively.
  • All the 17 indices we track in Europe closed in the red. Austria, Ireland, and Italy were shifted to a Downtrend after breaching their Day 1 low. Thus, three indices are in a Confirmed Uptrend, Portugal is in an Uptrend Under Pressure, nine are in a Rally Attempt, and four are in a Downtrend. With Denmark, Portugal, Switzerland, and theU.K recording a distribution day, the distribution day count stands at 2.8.
  • Actionable names in the Focus List are AstraZeneca (AZN.GB; AZN:LN) and Man Group (EMG.GB; EMG:LN).

Won Global View

Posted on by Vidhya M

The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq were relatively flat and remain
below 10-DMA resistance (S&P 500: 3,834; Nasdaq: 11,259) after Tuesday’s big downside reversal. The first level of
price support is at the June lows (S&P 500: 3,636; Nasdaq: 10,565). The distribution day count remains at one on the
Nasdaq and none on the S&P 500.

Won Europe Today

Posted on by Vidhya M

Yesterday,

  • European markets closed in the red, following cues from Tuesday’s U.S. markets where U.S. consumer
    confidence data came in at a 16-month low on fears of an economic slowdown in second half of the year. At ECB’s
    conference in Portugal, Fed Chair Jerome Powell reiterated that although the rate hikes could slow down the
    economy, surging inflation posed a larger risk. While the ECB is committed to raise interest rates in July and in
    September, the latest inflation data from Germany’s largest state by population, North Rhine-Westphalia, showed
    that consumer prices fell 0.1% m/m in June. As the yearly inflation in the region decreased to 7.5% from 8.1% in
    May, investors are hoping for less aggressive monetary tightening policies. We continue to recommend a cautious
    approach to adding risk. Remain defensive with a focus on high relative strength ideas that are part of leading
    and/or improving industry.
  • The Stoxx 600 corrected 67bps while continuing to form the right side of a stage-one 11-week long flat base. It is
    trading below its key support levels and 1% below the pivot. Auto, Travel, Technology, and Mining were among the
    biggest losers, declining 260bps, 259bps, 129bps, and 125bps, respectively. Health Care gained 73bps. Among
    other major indices, France’s CAC, Germany’s DAX, and the U.K.’s FTSE closed in the red, declining 90bps,
    173bps, and 15bps, respectively.
  • Among the 17 indices we track in Europe, 15 closed in the red while Denmark and Switzerland closed in the green.
    While Finland and Sweden were shifted to a Rally Attempt, Germany was shifted to a Downtrend. Thus, three
    indices are in a Confirmed Uptrend, Portugal is in an Uptrend Under Pressure, 12 are in a Rally Attempt, and
    Germany in a Downtrend. The distribution day count stands at 3.5.
  • Actionable names in the Focus List: AstraZeneca (AZN.GB; AZN:LN) and Man Group (EMG.GB; EMG:LN).

U.S. Economic Summary

Posted on by Vidhya M
Q1 GDP contracted 1.6%, missing consensus: The U.S. economy contracted 1.6% in X1, according to the
final figures, missing consensus of a 1.5% contraction. The decrease in real GDP reflected decreases in
private inventory investments, exports, federal government spending, and state and local government
spending. Imports, which are deducted to calculate GDP, increased. Personal consumption

Won Europe Today

Posted on by Vidhya M

We released our Weekly Global Laggards Report today. Click here to access the report. The stocks highlighted in this report are laggards relative to their own domestic markets. We recommend that they be underweighted as they may be vulnerable to further downside risk and underperformance. European names highlighted this week include Safran (SGM.FR; SAF:FP), Sig Group (SIGN.CH; SIGN:SW), Aena Sme (AENA.ES; AENA:SM), ASR Nederland (ASRN.NL; ASRNL:NA), and Poste Italiane (PST.IT; PST:IM).

 

Won Global View

Posted on by Vidhya M

The U.S. market remains in a Rally Attempt. The S&P 500 and Nasdaq rallied yesterday but did not stage a follow-through day (FTD) as gains did not meet the 1.7% threshold. Today will mark Day 5 of the attempted rally with a FTD needed to upgrade the market status, and conversely, an undercut of last week’s lows to shift back to a Downtrend. The S&P 500 still faces resistance at its 10-DMA (3,810) before the declining 21-DMA (3,898). The Nasdaq narrowly cleared above its 10-DMA (11,168) and now faces 21-DMA (11,417) resistance.

Won Global View

Posted on by Vidhya M

The U.S. market has shifted to a Rally Attempt. The S&P 500 and Nasdaq have held above last week’s lows (S&P 500: 3,636.87;
Nasdaq: 10,565.14) for three sessions. A follow-through day (+1.7% in higher d/d volume) above these lows will lead us to upgrade the market back to a Confirmed Uptrend. Conversely, an undercut of these lows and the market status moves back to a Downtrend. Near-term resistance remains the rolling 10-DMA (S&P 500: 3,813; Nasdaq: 11,154). We have already had four failed FTDs this year. The seven bear markets since 1971 had a median of six failed FTDs

Won Europe Today

Posted on by Vidhya M

Yesterday,
European markets ended in the red, after recovering some intraday loss. We continue to recommend a cautious
approach to adding risk as major indices continue to make lower lows and lower highs and, in the process, have
breached their key short-term support levels.
The Stoxx 600 ended 0.7% lower on below average volume after trimming a 1.8% decline in the day. The index has
next support at ~395 (2.4% lower). It is trading 18% off highs and sits 7.3% and 11.6% below its 50- and 200-DMA,
respectively. Miners and Energy stocks led the decline as commodity prices slumped.
Among major indices, France’s CAC, Germany’s DAX, and the U.K.’s FTSE are trading below all their key moving
averages.
Among the 17 indices we cover, most closed in the red, with Norway leading the decline, down 3.1%. The U.K,
France, the Netherlands, and Sweden were shifted to a Rally Attempt. Norway was shifted back to a Downtrend.
Two indices are in an Uptrend Under Pressure, two are in a Downtrend, and the remaining 13 are in a Rally
Attempt.
Actionable names in the Focus List include Greek Organisation of Football Prognostics (OPAP.GR; OPAP:GA),
Man Group (EMG.GB; EMG:LN), Terna Energy (TEN.GR; TENERGY:GA), GSK (GSK.GB; GSK:LN), and
Astrazeneca (AZN.GB; AZN:LN).

O’Neil Capital Equipment Sector Weekly

Posted on by Vidhya M

Polycab India (POI.IN; POLYCAB IN) – $4B market cap; $12M ADV: We removed Polycab India from our Emerging Markets Focus List due to technical deterioration. The stock breached support at INR 2,162 (the bottom of its
previous base) and is trading below its 50- and 200-DMA. Despite a strong demand environment, the company’s EBIT margin shrank in Q4 FY22 due to increased costs. Fundamental & Technical note

Won Global View

Posted on by Vidhya M

The U.S. market remains in a Downtrend. The S&P 500 and Nasdaq rallied for a second straight session and are now two days off recent lows. The market status will shift to a Rally Attempt tomorrow should last week’s lows hold, at which point we will again look for a follow-through day (FTD) before upgrading the market status. The 10-DMA (S&P 500: 3,839; Nasdaq: 11,176) remains near-term resistance before the falling 21-DMA (S&P 500: 3,939; Nasdaq: 11,474). The next level of support below last week’s lows is ~3,549 on the S&P 500, while support on the Nasdaq is ~10,519 before ~10,200.