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 under weighted as they may be
vulnerable to further downside risk and underperformance. European names highlighted this week include Cie de Saint
Gobain (COD.GB; COD:LN), Boss (Hugo) (Xet) (BOSSX.DE; BOSS:GR), Kerry Group ‘A’ (KRZ.IE; KYGA:ID), PernodRicard (RCD.FR; RI:FP), Ucb (UCB.BE; UCB:BB), and Tesco (TSCO.GB; TSCO:LN).
Author: Vidhya M
WON Europe Today
Yesterday,
- European markets continued to trade below their key moving averages. Major indices are able to hold their recent
lows on made on May 19. We recommend that investors remain cautious and be very selective while adding any
new risk coming out of proper bases. - The Stoxx 600 continues to trade below 440 price level. Among other major indices, France’s CAC is finding
support at 6,300 price level. Germany’s DAX is finding resistance at its 50-DMA while the U.K.’s FTSE 100 is rising
along its rising 50-DMA. - Among sectors, Oil & Gas, Basic Resources, Banks, and Utilities led the bulls while Real Estate, Media, and
Financial Services lagged. - Among the 17 indices that we track in Europe, Sweden, Switzerland, Denmark, the Netherlands, and Luxembourg
closed in the red. Actionable names in the Focus List include Rew (Xet) (RWEX.DE; RWE:GR), GlaxoSmithKline
(GSK.GB; GSK:LN), Ipsos (IPS.FR; IPS:FP), Novo Nordisk (NON.DK; NOVOB:DC), and Compass Group
(CPG.GB; CPG:LN).
Won Global View
The U.S. market is in a Rally Attempt. The S&P 500 and Nasdaq bounced higher on below average volume. Near-term resistance remains the rolling 10-DMA (S&P 500: 3,979, Nasdaq: 11,555). We are monitoring for a follow-through day (+1.7% in higher d/d volume) and will upgrade the market status once we hold about last week’s low (S&P 500: 3,810, Nasdaq: 11,035).
Won Global View
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: 3,810,
Nasdaq: 11,035) for three days. 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: 3,979, Nasdaq: 11,581). We have already had three failed FTDs this year. The seven bear markets since 1971 had a median of six failed FTDs.
WON Europe Today
Yesterday,
- European markets had a weak day with some of the indices recording distribution days. Indices have to clear
multiple levels of resistance before we turn constructive on the markets. We recommend that investors remain
cautious and be very selective while adding any new risk coming out of proper bases. - The Stoxx 600 continues to trade below 440 price level and is awaiting a follow-through day. Among sectors,
Technology, Industrial Goods, and Utilities were the worst performers while Banks and Telecommunication stocks
were up half a percent. - Among other major indices, France’s CAC continues to lag after finding supply at its 50-DMA. Germany’s DAX and
the U.K.’s FTSE 100 recorded distribution days. DAX and FTSE 100 are finding resistance at 50-DMA and 7,500
price level, respectively. - Among the 17 major indices that we track in Europe, Portugal, Spain, and Switzerland closed in the green.
Germany, the U.K., Ireland, and Austria recorded distribution days. - Actionable names in the Focus List include Rew (Xet) (RWEX.DE; RWE:GR), GlaxoSmithKline (GSK.GB;
GSK:LN), Ipsos (IPS.FR; IPS:FP), Novo Nordisk (NON.DK; NOVOB:DC), and Compass Group (CPG.GB;
CPG:LN).
Won Global View
The U.S. market remains in a Downtrend. The S&P 500 and Nasdaq bounced higher for the second consecutive session. The next level of resistance is at the downward sloping 10-DMA (S&P 500:3,987, Nasdaq: 11,652). We will shift the market status to a Rally Attempt after the close if we continue to trade above last week’s low (S&P 500:3,810, Nasdaq: 11,035).
WON Europe Today
We released our European Weekly Summary yesterday. Click here to access the report. Key points from it include:
- The Stoxx 600 was shifted to a Rally Attempt last Tuesday. The index has held above May 9 lows for more than
three days. A follow-through day (+1.7% volume above the prior day) above these lows will shift the market back to
a Confirmed Uptrend. - While several markets, including France, Germany, Spain, Austria, and Finland, had a follow-through day and were
shifted to a Confirmed Uptrend, we continue to recommend that investors take a patient approach to adding risk as
the breadth remains very narrow. - Our rotation chart shows continued improvement in short-term momentum (over four weeks) in Transportation,
Staple, Utility, and Energy.
Won Global View
The U.S. market is in a Downtrend. The S&P 500 and Nasdaq staged a follow-through day (FTD) last Tuesday, before quickly failing on Friday by undercutting year-to-date lows. This is now the third failed FTD this year. Since 1971, there have been 33 S&P 500 corrections (9% off highs and below 200-DMA), of which seven turned into bear markets. These seven bear markets had a median of six failed FTD. Support is now ~3,700 on the S&P 500 and ~10,500 on the Nasdaq. Near-term resistance remains the declining 10-DMA (S&P 500: 3,991, Nasdaq: 11,679).
WON Europe Today
Friday,
- European markets had a strong day but volumes were low across the major indices. Indices should clear multiple
levels of resistance before we turn constructive on the markets. We recommend that investors remain cautious
and be very selective while adding any new risk coming out of proper bases. - The Stoxx 600 gained 0.7% on low volume. The index continues to trade below April lows after forming an outside
reversal on May 18, and found supply at 440 price levels. Among sectors, Travel & Leisure, Heath Care, and
Utilities led the gains. While personal & household and retail stocks lagged. - Among other major indices, France’s CAC continues to trade below its 50-DMA after forming outside reversal on
May 18. Germany’s DAX formed a downside reversal on finding resistance at its 50-DMA. The U.K.’s FTSE 100 is
finding resistance at its 50-DMA. It is awaiting a follow-through day. - Among the 17 major indices that we track in Europe, only Luxembourg closed in negative territory. Seven of the
indices are in a Confirmed Uptrend while others are awaiting follow-through days. Actionable names in the Focus
List include Rew (Xet) (RWEX.DE; RWE:GR), GlaxoSmithKline (GSK.GB; GSK:LN), Ipsos (IPS.FR; IPS:FP), Novo
Nordisk (NON.DK; NOVOB:DC), and Compass Group (CPG.GB; CPG:LN).
Won Global View
The U.S. market remains in an Uptrend Under Pressure. The market status will be downgraded to a Downtrend should year-to-date lows (S&P 500: 3,858, Nasdaq: 11,108) undercut. Support below these lows is ~3,700 on the S&P 500 and ~10,500 on the Nasdaq. Nearterm resistance remains the declining 10-DMA (S&P 500: 4,011, Nasdaq: 11,751). The distribution day count already stands at one each.
