HKTL.HK – WILLIAM O'NEIL+CO

Global Technology/Cyclical Sector–Internet and Media

Posted on December 12, 2018February 1, 2019 by Derek Higa

Key Points

After worsening in the first half of 2018, all Old Media industry groups recovered in the second half of the year, and now rank among the top 30 positions in our 197 Industry Groups (IG).

The Media-Radio/Tv (IG Rank 7) and Telecom Svcs-Cable/Satl (IG Rank 15) are now in the top 20 in our IG ranking.

The New Media value chain continues to evolve. Netflix still leads the way in OTT streaming, but the upcoming launches of comparable platforms such as Disney+ in late 2019 will change the competitive landscape.

Internet stocks continue to be under pressure, led by FB (March 20 removal) and GOOGL (November 19 removal). Other Internet names, including YELP, MTCH, GRUB, and ROKU, declined sharply following disappointing earnings results or guidance.

Stocks detailed in this report include: DIS, CMCSA, VZ, NFLX, FB, TWTR, and RCI/B.CA (the latter is on our Focus List). In Asia, Info Edge (

), PVR (

), Studio Dragon (

), and VGI Global Media (

APAC Weekly Summary

Posted on November 14, 2018February 1, 2019 by Derek Higa

APAC markets have retested resistance levels in recent weeks, but none have displayed any progress. For many, including the MSCI Asia, the 50-DMA continues to be impenetrable. Several major markets ( Japan, South Korea, China, India ) had follow-through days recently, which could be an initial indication of a trend change. However, many have failed before, and in recent days, distribution has picked up. Overall, until we see a break above resistance, our conviction will remain low. Our recommendation is to still lean on the side of caution and be selective in allocating capital, focusing on ideas that have already developed constructive technical bases.

This week we look at Hong Kong’s Hang Seng Index, which remains in a Rally Attempt and in bear territory. Although we are still waiting for an official follow-through day, accumulation volume in early November was encouraging. In sector rotation, it is still unclear and possibly too early to get aggressive in our view, as defensive sectors in Hong Kong continue to stand out. On a stock level, we are looking for ideas that have developed constructive stage one bases, in search of nascent leadership. Unfortunately, many stocks are still from defensive areas. We also share our thoughts on Tencent ( TCNT.HK; 700:HK ) following Q3 earnings results and circle back to Asahi Intec ( AS@H.JP; 7747:JP ), which is actionable after reporting a strong Q1.

Global Sector Commentary

Posted on October 12, 2018February 1, 2019 by Kenley Scott

Key points:

The Russell Global had a clear breakdown this week. U.S. and major European markets, which had held better previously, all broke down this week.

Screening the entire investable universe of >$1B market cap and $3M ADV stocks (6,400 stocks), there are only 110 which are 1) within 10% of 52-week highs, 2) above their 200-DMA, 3) traded higher this week, 4) have traded higher in the trailing four weeks. Of these, 44 with the best charts are included below.

APAC Weekly Summary

Posted on October 10, 2018February 1, 2019 by Derek Higa

Over the last three days we downgraded Hong Kong to a Downtrend as a second follow-through day failed. We also downgraded Australia and Taiwan to a Downtrend. With U.S. markets clearly displaying pressure (also downgraded to a Downtrend today), we have gotten more bearish on global market conditions overall. In APAC, major markets have declined quite orderly, unable to rally much above key moving averages (50- or 200-DMA) before breaking down further again. This seemingly systematic selling leaves markets at risk to capitulation. If this should occur, we expect selling to pick up sharply on heightened investor fears. Furthermore, along with market declines, the number of APAC Focus List removals has increased significantly since September. We reiterate caution and advise raising cash if possible or implementing a defensive approach.

Despite poor market conditions and increased caution, our team ran a PANARAY screen for ideas with improving relative strength, especially for investors who must put capital to work. We cut this list down to 34 ideas, provided below. Lastly, we highlighted small-cap idea, Bangkok Chain Hospital (BCHP.TH; BCH:TB).

APAC Market Update

Posted on October 8, 2018February 1, 2019 by Sambit Mohanty

We are downgrading Hong Kong to a Downtrend as the Hang Seng undercut September lows and closed at new lows for the year. This is the second failed follow-through day since August and the fourth failed attempt to rally above the 50-DMA since July for the Hang Seng. The 50-DMA continues to serve as consistent resistance as the number of stocks breaking out remains near historical lows. Moreover, we believe selling has been orderly thus far, leaving the market at risk to capitulation, which would involve accelerated declines on heightening investor fears.