The CSI 300 fell 0.11% on lower but still above average volume this week. The market remains in an Uptrend Under Pressure with four distribution days. The index continued to consolidate around the 200-DMA (~5,120, +0.6%) with no clear support until May’s low of ~4,900 (-3.7%). The index faces next resistance at 100-DMA (5,133, +0.9%), 21-DMA (~5,140, +1.0%), and 50-DMA (~5,180, +1.8%).
Symbol: SKJ.KR
Global Focus Emerging
The CSI 300 gained 0.5% on much higher and above average volume this week. The market remains in an Uptrend Under Pressure with four distribution days. The index continued to consolidate around the 200-DMA (~5,110, +0.3%), with no clear support until May’s low at ~4,900 (-3.8%). The index faces resistance at the 21-DMA (~5,140, +0.9%), 100-DMA (~5,150, +1.1%), and 50-DMA (~5,170, +1.5%).
Global Focus Emerging
The CSI 300 fell 0.23% on higher and above average volume this week. The market remains in an Uptrend Under Pressure with the number of distribution days decreasing to four. The index traded around the 200-DMA (5,095, +0.5%), with no clear support until May’s low of ~4,900 (-3.3%). The index faces resistance at the 21-DMA (~5,150, +1.6%), 50-DMA (~5,170, +2.0%), and 100-DMA (5,180, +2.2%).
Global Focus Emerging
The CSI 300 fell 3.03% on lower and below average volume this week. The market remains in an Uptrend Under Pressure with the number of distribution days increasing to five. The index traded around the converged 21- and 100- DMA (~5,200, +2.3%) for four sessions but Friday gapped down to open below these two key support levels and breached the 50-DMA (~5,170, +1.8%) and 200-DMA (5,085, +0.1%) with no clear support until May’s low at ~4,900 (-3.6%).
O’Neil TMT Weekly
Software ( IGV ): The software benchmark is slightly below a pivot of $389 from an 18-week consolidation. RS Rating 59
and A/D Rating C+. The index is likely to pause or form a short handle after rising for six consecutive weeks. Leading
constituents (NET, ADBE) remain intact and above their 10- and 21-DMA while an increasing number of high-quality
stocks (VEEV, PANW, NOW) continue to form the right side of bases and set up constructively. Recent IPOs (DOCN ,
APP, ASAN ) are under accumulation and worth your attention. This is the time to increase allocations to software as the
IGV and the majority of constituents are still setting up.
Market View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 shook out briefly below its 50-DMA last week
only to push right back into new all-time highs this week. The Nasdaq, which has been leading over the last few
weeks, broke out from a 19-week consolidation into new all-time highs. We continue to view the rising 21-DMA
as a key level of near-term support. The distribution day count has declined to a reasonable three and four days,
respectively, with one additional day set to expire on the S&P 500 next week.
Global Focus Emerging
The CSI 300 rose 2.69% on higher but below average volume this week. The market remains in an Uptrend Under Pressure with the number of distribution days decreasing to four. The index retook the 50-DMA (~5,150, -1.7%) and converging 21-DMA and 100-DMA (~5,220, -0.4%), with the next support at the 200-DMA (5,076, -3.1%). Resistance lies at May’s high of ~5,380 (+2.7%).
Won Global View
The U.S. market remains in a Confirmed Uptrend. The Nasdaq remains at all-time highs after breaking out on Tuesday, while the S&P
500 is only a few points below its all-time highs. Near-term support is at the rising 10- and -21-DMA (S&P 500:4,219; Nasdaq: 13,940). The
distribution day count fell to three on the S&P 500 due to expiration and remains at four on the Nasdaq.
Market View
The U.S. market is now in a Rally Attempt. Indices declined for another week, however the Nasdaq (6,686) and S&P 500 (2,280) are slightly off lows for the third consecutive session, as the market status was moved to a Rally Attempt. If indices undercut recent lows, the status will be moved back to a Downtrend.
All 11 sectors declined for the week, led lower by Energy (-20%). The majority of sectors are bouncing around recent lows, led by poorly ranked industry groups (1=best, 197=worst). More than half of the 12 best performing groups for the week were ranked 103 or worse. Industry groups showing an improvement in rank or with RS lines at or near highs are primarily defensive in nature including Cleaning Products (CLX), Discount Retail (COST), Medical-Software (VEEV), Super Markets (KR), Water Utilities (AWR), Food (FDP), and Telecom (CCOI).
Despite the possibility of a follow-through day as early as next week, we maintain a very cautious and defensive approach. Indices remain near lows and low-quality stocks from poorly ranked industry groups are attempting to bounce higher. A lot of technical damage has occurred to stocks, and we believe it will take some time to repair. In the meantime, continue to monitor high relative strength quality stocks as they will be a valuable resource for fresh ideas when market conditions improve.
Global Focus Emerging
The CSI 300 fell 6.2% on lower volume this week. We downgraded the market to a Downtrend as the index, following the global selloff, slumped 4.3% and breached its 200-DMA Monday. The index hit 52-week lows of 3,503 intraday Thursday and is testing persistent support at the gap of 3,520–3,556. If 3,520 (-3.6%) fails, there would no clear support until the 2019 lows of 2,935. The next resistance lies at the 200-DMA at 3,900 (+6.7%). As the coronavirus pandemic and fear of economic recession in Europe and the U.S. continue hitting overseas markets, domestic market sentiment will suffer even though China’s market has been resilient. The CSI 300 bounced off recent lows, and we will shift the market to a Rally Attempt should it hold above this low for two days. Investors are advised to stay cautious and focus on defensive names with RS Ratings near highs.
