The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq held slightly above 21-DMA support (S&P 500: 4,086; Nasdaq: 11,981) last week, consolidating sharp gains off recent lows in choppy fashion. The next level of l ogical resistance for both indices is the sharply falling 50-DMA (S&P 500: 4,249; Nasdaq: 12,773). Following last Tuesday’s rebalancing volume spike, volume came in well below average for the remaining three sessions allowing the distribution day count to stay at one each.
Author: Vidhya M
Won Europe Today
On Friday,
- European markets closed in negative territory on the news that the U.S. economy added 390K jobs, above street estimates of 328K, raising concerns that the Fed will have to continue to pursue its hawkish policies to control its 40-year-high inflation. The continuing conflict in Ukraine, along with EU’s partial ban on Russian oil imports, continue to drag the market sentiments. Although the European markets are in a Confirmed Uptrend, the leadership remains narrow. As breakouts are limited and technicals are weak outside of top names in Energy, Transportation, and Utilities, we recommend that investors remain cautious, focus on relative strength when adding names, and reduce risk in ideas breaking below their logical levels of support.
- The Stoxx 600 declined 0.26% with Technology, Auto, and Banking sectors leading the losses. Among other major indices, France’s CAC declined 23bps and is trading between its 100-DMA and 50-DMA with a solid support at its 50-DMA. Germany’s DAX and the U.K.’s FTSE are trading above their key support levels, with the DAX declining 17bps and the U.K. remaining closed.
- Among the 17 indices we track in Europe, nine closed in the red, seven closed in the green, while the U.K was closed. Fourteen indices are in a Confirmed Uptrend, Luxembourg and Italy are in a Rally Attempt, and Belgium is in an Uptrend Under Pressure. The average distribution day count stands at 1.7, with the Stoxx 600 recording a distribution day.
- Actionable names in the Focus List include the Compass Group (CPG.GB; CPG:LN), Man Group (EMG.GB; EMG:LN), and Rwe (Xet) (RWEX.DE; RWE:GR)
Won Global View
The U.S. market is in a Confirmed Uptrend. The Nasdaq staged a day five follow-through on Thursday, gaining 2.7% in
higher day/day volume. The index regained both its 10-DMA (11,687) and 21-DMA (11,925) which will now act as nearterm downside support. The rolling 50-DMA (12,920) is now the next level of logical resistance. The S&P 500 rallied in
lower volume, but also regained its 10-DMA (4,024) and 21-DMA (4,066), with the 50-DMA (4,277) now also the next level
of resistance.
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 include Ferrovial
(FERC.ES; FER:SM), L’Oreal (OR@F.FR; OR:FP), Hannover Rueck (XET) (HNR1X.DE; HNR1:GR), Fnac Darty
(FNAC.FR; FNAC:FP), Dassault Systemes (DSY.FR; DSY:FP), and Rightmove (RMV.GB; RMV:LN)
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq declined 63bps and 41bps, respectively, adding two distribution days post the Nasdaq’s follow-through. Despite the small pullback, both are still holding near-term support along their respective 10- and 21-DMA (S&P 500: 4,072; Nasdaq: 11,939). Upside resistance remains the declining 50-DMA (S&P 500: 4,270; Nasdaq: 12,884).
WON Europe Today
esterday,
- European markets declined after four straight days of gains. Preliminary CPI data for Eurozone jumped to a record 8.1% in May, above consensus of 7.7% and up from 7.4% in April. The inflationary concerns and hawkish stance of central banks, weighed on the majors. We recommend adding names breaking out of bases with focus on high relative strength. Reduce risk in ideas breaking below their logical levels of support.
- The Stoxx 600 ended in the red, declining 0.7% on below average volume. The index faced resistance at ~446 zone, which coincides with its 50-DMA. The index has support at ~438 (1.7% below), its prior consolidation resistance. It sits 3% below its 200-DMA and 9% off highs. Sectors were mixed. Personal-Goods stocks outperformed while Technology and Retail underperformed.
- Among major indices, France’s CAC and Germany’s DAX have retaken their 21- and 50-DMA while still trading below their 200-DMA. The U.K.’s FTSE has retaken its 21- and 50-DMA and is trading above all its key moving averages.
- Among the 17 indices we cover, most closed in the red with Finland declining the most, down 1.8%. Ten indices recorded a distribution day. Three indices are in a Rally Attempt while the remaining 14 are in a Confirmed Uptrend.
- Actionable names in the Focus List include GlaxoSmithKline (GSK.GB; GSK:LN), Ipsos (IPS.FR; IPS:FP), Compass Group (CPG.GB; CPG:LN), Rwe (Xet) (RWEX.DE; RWE:GR), and Edp Renovaveis (EDPR.PT; EDPR:PL).
Won Global View
The U.S. market remains in a Confirmed Uptrend. Nasdaq staged a day five follow-through last Thursday, gaining 2.7% in higher day/day volume. The index regained both its 10-DMA (11,687) and 21-DMA (11,925), which will now act as near-term downside support. The rolling 50-DMA (12,920) is now the next level of logical resistance. The S&P 500 rallied in lower volume, but also regained its 10-DMA (4,024) and 21-DMA (4,066), with the 50-DMA (4,277) acting as the next level of resistance.
WON Europe Today
Yesterday,
European markets advanced for the fourth straight day. China’s partial relaxation of its strict lockdowns added
some support to the majors. We recommend adding names breaking out of bases with focus on high relative
strength. Reduce risk in ideas breaking below their logical levels of support.
The Stoxx 600 ended in the green, advancing 0.6% on below average volume. The index is likely to face resistance
at ~447, which also coincides with its 50-DMA. This comes after the index broke out of its ~440 range, where it had
been consolidating since early May. The index sits 2.3% below its 200-DMA and 8% off highs. Sectors were mixed.
Consumer Staple and Technology outperformed, while Telecom and Utilities lagged.
Among major indices, France’s CAC and Germany’s DAX have retaken their 21- and 50-DMA while still trading
below their 200-DMA. The U.K.’s FTSE has retaken its 21- and 50-DMA and is trading above all its key moving
averages.
Among the 17 indices we cover, most closed in the green, with Denmark advancing the most, up 4.1%. Denmark
was shifted to a Confirmed Uptrend after recording a follow-through day. Three indices are in a Rally Attempt, while
the remaining 14 are in a Confirmed Uptrend.
Actionable names in the Focus List include GlaxoSmithKline (GSK.GB; GSK:LN), Ipsos (IPS.FR; IPS:FP),
Compass Group (CPG.GB; CPG:LN), Rwe (Xet) (RWEX.DE; RWE:GR), and Edp Renovaveis (EDPR.PT;
EDPR:PL).
WON Europe Today
We released our European Weekly Summary today. Click here to access the report. Key points from it include:
It was a bullish week for European markets. The Stoxx 600 is in a Confirmed Uptrend after a follow-through day on
Friday. The index broke out of its ~440 range, where it was consolidating since early May. Economic data and the
Fed’s commentary provided some support to the market amid the ongoing inflationary pressures, economic health,
and war. We recommend adding names, breaking out of bases with high relative strength. Reduce risk in ideas
breaking below logical levels of support.
Among the 11 O’Neil sect Rotation Chart rising short-term momentum (over four weeks) among Retail and
Financials. Also, short-term momentum among leading (over 26-weeks) Transportation and Energy is not abating.
However, momentum in Health Care and Basic Resources is fading.
European Focus List Update:
New addition last week: Man Group (EMG.GB; EMG:LN)
Removals last week: None
Won Global View
The U.S. market has been upgraded to a Confirmed Uptrend. The Nasdaq staged a day five follow-through, gaining 2.6% in higher day/day volume. This index cleared above its 10-DMA (11,589), which will now act as immediate downside support. The 21-DMA (11,904) remains near-term upside resistance. The S&P 500, despite a strong price move, rallied in lower volume. This index also cleared above its 10-DMA (3,994) and is now sitting directly on its 21-DMA (4,057). Should indices hold above these moving averages, the next level of logical resistance is the rolling 50-DMA (S&P 500: 4,282; Nasdaq: 12,949). This is now the fourth follow-through day of the year, with three already failing. The seven bear markets since 1971 had a median of six failed FTDs.
