Consumer Cyclical (XLY). The index has broken below its 21-DMA on high volume and is trading 5% off highs. RS line is
flat with RS Rating of 88 and A/D Rating C. We recommend a patient approach to adding risk and reducing exposure in
ideas breaking below logical levels of support.
Symbol: COM7.TH
Global Focus Emerging
The CSI 300 gained 0.84% on higher and about average volume and remains in
an Uptrend Under Pressure with the number of distribution days falling to six
from eight. The index retook its 50-DMA (~4,882, -0.4%) with next resistance
at the 100-DMA (~4,917, +0.3%) and immediate support at November 10’s low
(4,754, -3.0%).
Market View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq pulled back sharply this week, with both closing below their respective 21-DMA. The next level of support is September highs at 4,545 and 15,403, respectively, which may also coincide with the rising 50-DMA. The distribution day count remains low at three and one, respectively, with one day expiring on the S&P 500 next week.
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq held support at their 21-DMA after pulling back to this
level earlier in the week. Support below the 21-DMA is at the September highs or the prior pivot at ~4,545 and 15,403, respectively,
which may also coincide with a rising 50-DMA. The distribution day count stands at three and two, respectively, with one day expiring on
the Nasdaq after the close.
O’Neil Consumer/Retail Weekly
Consumer Cyclical (XLY): The index is trading along its rising 21-DMA support and is trading 2% off highs. RS line is
moving higher with RS Rating of 85 and A/D Rating C-. We recommend investors Look for stocks with good
fundamentals breaking out of long consolidation on good volume
Global Focus Emerging
The CSI 300 lost 0.74% on higher yet below average volume and
remains in an Uptrend Under Pressure with eight distribution
days. The index continued moving sideways around its 50-DMA
(~4,892, +0.7%) with key resistance at the 100-DMA (~4,930,
+1.4%) and major support at July 28’s low (~4,664, -4.0%).
Market View
U.S. Market
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq staged downside reversals Friday
but continue to hold trend with a low number of distribution days. Near-term support remains the rising 10- and
21-DMA. Distribution stands at three days on the S&P 500 and two on the Nasdaq, with one day expiring on
each Tuesday.
Ten of 11 sectors, 152 of 197 industry groups, and 73% of S&P 500 stocks are trading above their respective
50-DMA. Leading industry groups over the past week include Software ( CRM ), Internet ( GOOGL ), Medical
Equipment ( ISRG ), Managed Care ( UNH ), Aerospace/Defense ( CAE ), and Payment Processors ( GPN ). Lagging
industry groups over the past week include Transportation Equip Mfg ( TRN ), Oil & Gas ( NBL ), Mining ( AG ), and
Discount Retail ( OLLI ).
Global Focus Emerging
The CSI 300 rose 0.44% this week on higher volume and remains in a Confirmed Uptrend with four distribution days. Although U.S.-Iran tensions disturbed the market, stronger-than-expected December price data eased worries about the economy to some degree. News that China is sending a team to the U.S. early next week to sign a phase-one trade deal also boosted sentiment. We remain positive on the general market as the CSI 300 is holding well above support at ~4,100, and we see the next level of resistance at ~4,403. Investors are advised to stay patient as significant distribution could occur with the expiration of lockup periods of a large number of shares approaching the end of January. We recommend focusing on ideas emerging from solid bases or rebounding from key support levels with heavy volume. Also, be mindful of companies’ announcements going into the season of preliminary FY19 earnings results.
Won Global View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq made new all-time highs, continuing to trend off 10-DMA
support. Distribution fell for a second straight session to three and two days, respectively.
Global Focus Emerging
The CSI 300 rose 3% this week on higher volume. The market remains in a Confirmed Uptrend with two distribution days. Boosted by better-than-expected factory activity in December and signs of easing monetary policy, the A-share market rallied strongly for the first three trading sessions. We remain positive on the general market, however, given the strong move higher over the last several weeks, a correction would not be unexpected. Since the Chinese economy still faces great downturn pressure and global market volatility could increase due to tensions in the Middle East, we advise remaining patient and focusing on quality ideas emerging from solid bases or rallying off key levels of support. Also consider trimming positions in ideas that are extended 20% or more above buy points. The CSI 300 broke above 2019’s high of 4,126 and is expected to consolidate. We are looking for the next level of resistance at 2018’s high of ~4,403 and the next level of support at the 50-DMA (~3,940) if immediate support at ~4,120 fails.
