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 Aena Sme
(AENA.ES; AENA:SM), Coloplast B (COL.DK; COLOB:DC), Ericsson B (SL@G.SE; ERICB:SS), and Renault
(RENU.FR; RNO:FP).
Author: Vidhya M
Won Global View
The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq recovered off intraday lows but still closed slightly lower on the session. Indices remain below all key moving averages with no support until year-to-date lows (S&P 500: 3,636; Nasdaq: 10,565). Distribution day counts remain at three and two, respectively.
Won Europe Today
Yesterday,
- European markets closed lower after a higher than expected U.S inflation data raised the possibility of rapid and
significant rate hikes by the Fed. This resulted in Euro falling below parity with the U.S. Dollar for the first time since
2002. Concerns of an economic slowdown persist as the Fed is expected to raise interest rates by 75bps in its July
meeting. 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 102bps while continuing to form the right side of a stage-one 13-week-long flat base,
trading below key support levels and 11% below the pivot. Auto, Travel & Leisure, and Banks were among the worst
affected sectors losing 230bps, 177bps, and 145bps, respectively. Among other major indices, France’s CAC,
Germany’s DAX, and the U.K.’s FTSE all closed in the red, declining 73bps, 116bps, and 74bps, respectively. - All the 17 indices we track in Europe closed in the red. With no change in market condition, one index is in an
Uptrend Under Pressure, eight in a Rally Attempt, one in a Downtrend, and the remaining seven in a Confirmed
Uptrend. As Belgium, Denmark, the Netherlands, Portugal, and Switzerland recorded a distribution day, the average
count currently stands at 3.3. - Actionable names in the Focus List include AstraZeneca (AZN.GB; AZN:LN), Compass Group (CPG.GB; CPG:LN),
Edp Renovaveis (EDPR.PT; EDPR:PL), Man Group (EMG.GB; EMG:LN) and Neoen (NEOP.FR; NEOEN:FP).
O’Neil Capital Equipment Sector Weekly
Siemens India (SIM.IN; SIEM IN) – $12B market cap; $10M ADV: We added Siemens India to our Emerging Markets Focus List after the stock broke out of a stage-one 12-week cup-withhandle base. The company has seen strong and broad-based order inflow growth during H1 FY22 and is expected to benefit from (1) high capital spending plans in the transportation and
renewable energy sectors, and (2) increased adoption of digitalization and automation solutions in both industrial and retail segments. Fundamental & Technical note
Won Europe Today
Yesterday,
- European markets closed marginally in the green, after trimming intraday losses. The fall in oil prices brought some
support to the market. We wait for the major indices to hold the current levels and retake their short-term moving
averages for a structural change. We recommend a cautious approach to adding risk, but becoming more
incremental is encouraged. Focus on high relative strength ideas that are part of leading and/or improving industry. - The Stoxx 600 ended 0.5% higher on below average volume and currently sits 15% off highs. The index continues
to hold above its 10- and 21-DMA and trade at the upper end of the consolidation base (400–418), where it has
been trading in the last three weeks. Next resistance is at its 50-DMA (2.1% above), followed by 445 levels (6.9%
above) and its 200-DMA (8.3% above). The support for the index remains at ~400 (4% below). Retail and Financial
Services stocks outperformed, while Energy underperformed. - Among major indices, France’s CAC and the U.K.’s FTSE have retaken their 21-DMA, while Germany’s DAX is still
below its 21-DMA. All these majors are trading below their 50- and 200-DMA. - The 17 indices we cover closed mixed. Spain was shifted to a Downtrend from a Rally Attempt and Sweden was
shifted to a Confirmed Uptrend from a Rally Attempt. One index is in an Uptrend Under Pressure, eight in a Rally
Attempt, one in a Downtrend, and the remaining seven in a Confirmed Uptrend. - Actionable names in the Focus List include Neoen (NEOP.FR; NEOEN:FP), Edp Renovaveis (EDPR.PT;
EDPR:PL), Compass Group (CPG.GB; CPG:LN), Man Group (EMG.GB; EMG:LN), and AstraZeneca (AZN.GB;
AZN:LN).
Won Global View
The U.S. market remains in an Uptrend Under Pressure. The S&P 500 and Nasdaq fell for a second straight session, falling back below all key moving averages with primary resistance still at the sharply rolling 50-DMA (S&P 500: 3,957; Nasdaq: 11,605). There remains no clear support above year-to-date lows (S&P 500: 3,636; Nasdaq: 10,565). Distribution day counts increased to three and two, respectively.
Won Global View
The U.S. market remains in an Uptrend Under Pressure. Indices pulled back after bouncing higher last week. The S&P 500 sold off 1% on slightly higher volume, while the Nasdaq faded 2% off 50-DMA resistance on lower volume as both indices are at/testing their 10-DMA support (S&P 500: 3,853; Nasdaq: 11,373). The S&P 500 picked up a distribution day, increasing the count to two on each index.
Won Europe Today
Yesterday,
- European markets ended marginally in the red, after closing in the green in the previous three sessions. The
declines came as Chinese stocks dropped on concerns over resurgence of COVID-19 in the country and fresh
fines for tech giants. We wait for the major indices to hold the current levels and retake their short-term moving
averages for a structural change. We recommend a cautious approach to adding risk but becoming more
incremental is encouraged. Focus on high relative strength ideas that are part of leading and/or improving industry. - The Stoxx 600 ended 0.5% lower on average volume and currently sits 16% off highs. The index has retaken its 10-
and 21-DMA last week.It is trading at the upper end of the consolidation base (400–418), where it has been trading
in the last three weeks. Next resistance is at its 50-DMA (2.6% above), followed by 445 levels (7.3% above) and its
200-DMA (8.7% above). Support for the index remains at ~400 (3.5% below). Automakers, Miners, and Travel &
Leisure stocks underperformed, while defensive sectors like Health Care and Utilities outperformed. - Among major indices, France’s CAC and the U.K.’s FTSE have retaken their 21-DMA, while Germany’s DAX is still
below its 21-DMA. All these majors are trading below their 50- and 200-DMA. - The 17 indices we cover closed mixed. Norway advanced the most, up 0.7%, while Ireland led the decline, down
1.8%. Austria and Spain were shifted to a Rally Attempt from a Downtrend. One index is in an Uptrend Under
Pressure, 10 in a Rally Attempt, and the remaining six in a Confirmed Uptrend. - Actionable names in the Focus List include Neoen (NEOP.FR; NEOEN:FP), Solaria Energia Y Medio Ambiente
(SEM.ES; SLR:SM), Edp Renovaveis (EDPR.PT; EDPR:PL), Compass Group (CPG.GB; CPG:LN), Man Group
(EMG.GB; EMG:LN), GSK (GSK.GB; GSK:LN), and AstraZeneca (AZN.GB; AZN:LN).
Won Global View
The U.S. market remains in an Uptrend Under Pressure. Some of the immediate pressure was relieved as the S&P 500 (+1.9%) and Nasdaq (+4.6%) posted solid gains for the week and retook their respective 21-DMA (S&P 500: 3,872; Nasdaq: 11,392). The 21-DMA will now act as the first level of support for each before recently established lows at the end of June (S&P 500: 3,839; Nasdaq: 10,850). Indices avoided distribution all week, and the distribution day count stands at one and two, respectively.
Won Europe Today
We released our European Weekly Summary today. Click here to access the report. Key points from it include:
- European majors closed in the green with the best weekly gain since May after bouncing off support levels. The
Stoxx 600 was shifted to a Confirmed Uptrend following Thursday’s follow-through day. The majors are trading near
the upper end of the consolidation base that they have built in the last three weeks. Investors look forward to
upcoming earnings that will offer insight into corporate resilience amid the current economic headwinds. - We want to see the major indices hold the current levels and retake their short-term moving averages for a
structural change. There are many levels of overhead resistance going ahead. We recommend a cautious
approach to adding risk but becoming more incremental is encouraged. Focus on high relative strength ideas that
are part of leading and/or improving industry groups. - Rotation Charth Care, and Staple showed improvement in the short-term momentum while Energy, Basic
Materials, and Transportation continue to lag in short-term momentum (over four weeks).
European Focus List Update: No addition while one removal occurred last week.
