Yesterday,
European markets ended in the green, after giving up some intraday gains. 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 key short-term support levels.
The Stoxx 600 ended 0.4% higher on below average volume after trimming a 1.1% increase in the day. The index
has found some support at 403 levels and has next support at ~395 (2% lower). It is trading 17% off highs and sits
6.9% and 11% below its 50- and 200-DMA, respectively. Automakers, Chemicals, and Technology stocks
outperformed, while Utilities underperformed.
Among major indices, France’s CAC, Germany’s DAX, and the U.K.’s FTSE are trading below all their key moving
averages.
The 17 indices we cover closed mixed, with the Netherlands advancing the most, up 1%, and Norway leading the
decline, down 1.5%. The Stoxx 600, Belgium, Denmark, Finland, Germany, Ireland, Norway, Spain, Switzerland,
and Italy were shifted to a Rally Attempt from a Downtrend. Two indices are in an Uptrend Under Pressure and five
are in a Downtrend.
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).
Author: Vidhya M
Won Global View
The U.S. market remains in a Downtrend. The S&P 500 and Nasdaq gapped to year-to-date lows last week in heavy volume, killing the fourth follow-through day (FTD) this year. The seven bear markets since 1971 had a median of six failed FTDs. The next level of support on the S&P 500 is ~3,549, while support on the Nasdaq is ~10,519 before ~10,200. Near-term resistance remains the falling 10-DMA (S&P 500: 3,839; Nasdaq: 11,200).
Won Europe Today
We released our European Weekly Summary yesterday. Click here to access the report. Key points from it include:
It was the third consecutive bearish week for the European markets. Interest rate hikes from central banks to curtail
inflation and the concerns of an economic slowdown weighed heavily on the market, with major indices breaking
below their key support levels. The Stoxx 600 was shifted to a Downtrend on Monday post-market hours after the
index closed below its May 9 lows. This is now the fourth failed follow-through day (FTD) since the market has been
in a correction since January.
We continue to recommend a cautious approach to adding risk. Major indices continue to make lower lows and
lower highs and, in the process, have breached their key short-term support levels. We recommend a high cash
position, but, if one must commit capital, remain defensive with a focus on high relative strength ideas that are part
of leading and or improving industry.
Rotation Chart starting to show signs of improvement in the short-term momentum.
European Focus List Update: Vantage Towers (VTWRX.DE; VTWR:GR) was removed last week.
Won Europe Today
On Friday,
- European markets were flat after giving up intraday gains. Most majors had a steep weekly decline, falling to levels
of February 2021. Rate hikes and the concern of an economic slowdown are weighing heavily on the markets. 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 key short-term support levels. - The Stoxx 600 ended 0.1% higher on average volume after giving up intraday gains of 1.4%. The index breached
the 405 support levels and has next support at ~395 (2% lower). It is trading 18% off highs. The index is 8.6% and
12.3% below its 50- and 200-DMA, respectively. Sectors were mixed; Tech shares led the gains, while Oil and
Metals were under pressure. - 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, the closes were mixed, with Belgium (+1.7%) advancing the most. Two indices are
in an Uptrend Under Pressure, while the remaining 15 are in a Confirmed Uptrend.
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 Astra
Zeneca (AZN.GB; AZN:LN).
Won Europe Today
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 are Bunzl (BNZL.GB;
BNZL:LN), The Swatch Group (UHRN.CH; UHRN:SW) and Pernod-Ricard (RCD.FR; RI:FP).
Won Global View
The U.S. market remains in a Downtrend. The S&P 500 and Nasdaq made new year-to-date lows yesterday in heavy volume. The next level of support on the S&P 500 is ~3,549, while support on the Nasdaq is ~10,519 before ~10,200. Near-term resistance remains the sharply falling 10-DMA (S&P 500: 3,876; Nasdaq: 11,290).
Won Global View
The U.S. market is in a Downtrend. The S&P 500 and Nasdaq bounced 1–2% off year-to-date lows. The first level of resistance is at the rapidly declining 10-DMA (S&P 500: 3,921; Nasdaq: 11,432), while support is at 3,662 and 10,519 on the S&P 500 and Nasdaq, respectively.
Won Europe Today
Yesterday,
European markets closed positive as indices found support at their March lows. We continue to recommend that
investors be very cautious and avoid adding any new risk as most indices are either in a Downtrend or an Uptrend
Under Pressure.
The Stoxx 600 gained more than 1.4% after finding support at its March lows of around 407 price levels. Almost all
sectors closed in positive territory, with Travel & Leisure gaining more than 3%.
Among other major indices, France’s CAC found support at its March lows, Germany’s DAX found support at its
May lows, and the U.K.’s FTSE 100 continues to find support at 7,200 price levels.
All 17 indices we track in Europe ended in the green, with 10 managing to hold on to their recent lows. Actionable
names in the Focus List include the Compass Group (CPG.GB; CPG:LN) and Man Group (EMG.GB; EMG:LN).
Won Global View
The U.S. market is in a Downtrend. The S&P 500 and Nasdaq traded relatively flat in lower volume, remaining near year-to-date lows. All moving averages are rolling toward current prices and will act as resistance on any short-term rebound. The S&P 500 has weak support at 3,662, while the next level of support on the Nasdaq is 10,519.
Won Europe Today
Yesterday,
European markets continued to slide as investors feared the tightening of monetary policy might induce recession.
Except for Norway, all indices again closed in the red, with some recording distribution days and some getting
downgraded. We recommend investors to be very careful and avoid adding any new risk.
The Stoxx 600 fell 1.3% and is testing its March lows. Given the sharp decline in recent sessions, we expect
markets to pause here. Next major support is around 400 price levels. Among sectors, Retail stocks led the losses,
while Banks gained more than 1%.
Among other major indices, France’s CAC and Germany’s DAX have been shifted to a Downtrend. CAC is testing
support at its March lows, while DAX is testing support at its May lows. The U.K.’s FTSE 100 is testing support at
7,200 price levels.
Sweden, Switzerland, Denmark, and Portugal recorded distribution days, while Austria was shifted to an Uptrend
Under Pressure. Actionable names in the Focus List include Compass Group (CPG.GB; CPG:LN) and Man Group
(EMG.GB; EMG:LN).
