The U.S. market has been upgraded to a Confirmed Uptrend.The Nasdaq staged a day-six follow-through, rising 1.9% on volume greater than Monday’s. The S&P 500 rose 1.5% also on higher day-over-day volume. Despite the follow-through day, the overall market continues to whipsaw with few ideas set up technically to buy. Therefore, we still advise a patient approach allowing the market to prove itself over the next several sessions before increasing risk in a meaningful way. We would still like to see both indices close and hold above their respective 50-DMA (S&P 500: 2,943; Nasdaq: 8,022), which they failed to do last week and again yesterday. More importantly, we need to see ideas emerge from consolidation in heavy volume, which did not occur yesterday despite strong price action. Tighter action at the index level should allow additional ideas to emerge in the coming days if this follow-through day proves to be successful.
Symbol: BPC.BR
Global Focus Emerging
The CSI 300 fell 3% for the week on slightly increased volume. We downgraded the market to a Downtrend Tuesday as it gapped down and logged its fifth distribution day after the U.S. designated China a currency manipulator. The CSI 300 has attempted to rally after hitting new lows of ~3,575, but the market is still weak. We will watch for 3,754–3,791 to provide the first level of resistance and 3,856–3,861 to provide the second. Near-term support is at 3,520–3,556 or the 200-DMA (-2.7%). China’s July import and export data were better than expected and MSCI confirmed it will raise A-shares weighting in its benchmark indices as scheduled, boosting sentiment. However, the overall market remains under considerable pressure. The trade war between China and the U.S. has been escalating, and risk aversion has increased significantly.
Global Focus Emerging
The CSI 300 dropped 2.9% for the week on increased volume. We downgraded the market to an Uptrend Under Pressure as the index fell below its 50-DMA on increased volume. The distribution day count has risen to four. The CSI 300 fell below its 100- and 50-DMA on higher volume in the second half of the week, influenced by overseas market fluctuations. The next immediate support is at the gap of ~3,715
Global Focus Emerging
The CSI 300 increased 1.3% for the week on lower volume and remains in a Confirmed Uptrend with three distribution days. Trading on the Nasdaq-style board enhanced activity in the technology sector and improved market sentiment and risk appetite. The market as a whole rebounded this week but volume remained low, indicating wait-and-see sentiment. The CSI 300 is 2.7% above its 100-DMA and 3.2% above its 50-DMA. Next support is at ~3,800 and ~3,700 and resistance is at ~3,900. China and the U.S. will have high-level face-to-face trade talks in Shanghai on July 30 and 31 for the first time since talks broke down in May, but no major breakthroughs are expected. In the near term, market focus shifted to the U.S. Federal Reserve meeting and domestic policy direction (the results of the July politburo). We believe that the index will continue sideways in a narrow range, and we suggest that investors focus on leading stocks that have broken out of patterns or key support levels on heavy volume.
Global Focus Emerging
The CSI 300 fell 0.02% for the week on slightly increased but still-belowaverage volume. The market remains in a Confirmed Uptrend with two distribution days. Recently released macro data was not as expected, and there is still the possibility of U.S.-China trade war tensions, leading to a strong wait-and-see market sentiment and continuous volatility. Interest rate cuts by several countries’ central banks boosted global capital markets. The CSI 300 is still weak, oscillating around ~3,800. We are looking for the index to hold support above the 100-DMA, near 3,796. Failure to hold this level would raise concern. The next support is the 50-DMA or the gap below (~3,715). Given that the market is waiting for the opening of Nasdaq-style tech board next Monday, we expect it to continue sideways. We advise investors to stay patient and focus on leading stocks that are trading constructively with a high probability of excellent Q2 earnings results.
Global Focus Emerging
The CSI 300 fell 2.17% for the week on lower volume. The market remains in a Confirmed Uptrend with two distribution days. It moved sideways following a sharp correction Monday due to the lower expectations of interest rate cuts in the U.S. Trading volume fell further and market sentiment was depressed, driven by interest rates and the launch of China’s Nasdaq-style tech board. However, we believe these influences are short-term. With the upcoming earnings announcements, fundamentals will drive market direction. Key June import/export trade and financial data released after market close Friday showed the economy has not improved fundamentally. The CSI 300 faces consistent resistance at ~3,900; we expect the index to continue moving sideways in the near term, with support at the 100-DMA (~3,774) and 50-DMA (~3,700).
Global Focus Emerging
The CSI 300 gained 1.77% for the week on slightly increased volume. The market remains in a Confirmed Uptrend with one distribution day. The leaders of the U.S. and China agreed to resume trade talks, and the U.S. agreed to suspend new tariffs on Chinese goods, causing the market to gap up on increased volume Monday but pull back since then on shrinking volume. The CSI 300 faces great pressure after breaking through the gap, with the next immediate resistance at ~3,942 then at rally highs of ~4,126. Immediate support is at ~3,854 and then ~3,715. Chinese macro data for June will be released next week, and earnings season will start soon, so we expect the market to focus on fundamentals.
Global Focus Emerging
The CSI 300 fell 0.22% for the week on lower volume. The A-share market remains in a Confirmed Uptrend with two distribution days. We saw rangebound action in the market this week as investors await the Trump-Xi meeting at the G20, scheduled for this weekend. Uncertainty weighed on market sentiment and investors remain cautious. The CSI 300 faces resistance of the upper gap at ~3,856, and our conviction will increase if the index can break through it on increased volume. The lower gap at ~3,556 is the next level of support. Economic data showed improvement in industrial companies’ year-over-year profit growth in May, a sign that China’s economy is gradually stabilizing. Trade remains a big uncertainty, so investors are advised to stay patient and gradually buy actionable growth ideas as they break out from sound bases or the 50-DMA level. As the market enters the earnings preannouncement season, investors should watch ideas with high or better-than-expected earnings growth.
Global Focus Emerging
The CSI 300 gained 4.9% for the week on increased volume. We upgraded the
market to a Confirmed Uptrend after it rose 3% on heavy volume and retook
its 50-DMA. The number of distribution days fell to two. U.S. President Trump
and Chinese President Xi announced they will meet at the G20 next week,
lifting markets and spurring hopes for a trade truce. Major stock indexes rose
sharply this week, with the Shanghai Composite index and CSI 300 regaining
their 50-DMA and the Shenzhen retaking its 100-DMA. The CSI 300 is trading
1.5% above its 50-DMA, the next level of support, and faces resistance along
the gap above (~3,885). The RMB recovered against the U.S. dollar as the U.S.
Federal Reserve signaled an interest rate cut. Our conviction has increased and
we recommend gradually buying actionable growth ideas as they break out from
sound bases or looking for aggressive entries on high conviction names as they
break through their 50- or 200-DMA. Meanwhile, stay cautious, as the market is
waiting for further clarity on U.S.-China talks.
Global Focus Emerging
The CSI 300 rose 2.53% for the week on trading volume in line with the 50-day
average. It remains in an Uptrend Under Pressure with a distribution day count
of three. Driven by the policy that special bond funds can be used as capital
for major projects, the index rallied more than 3% on Tuesday, followed by a
three-day losing streak, which indicated that short-term policy stimulus may not
be sustainable; the index is expected to continue to consolidate. The CSI 300 is
testing the 100-DMA, which provides the next immediate support. If the index
cannot hold up, the next support is at ~3,556. The previous two highs of ~3,723
and ~3,745 provide the next resistance. Published after Friday’s close, China’s key
macroeconomic data for May continued to weaken. May’s industrial production
and fixed investment growth continued to fall, showing that the economic
downturn pressure has increased.