Global Focus Emerging
Symbol: ULK.TR
February 15, 2024 – Weekly Best Ideas
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Won Global View
The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq declined 9bps and 30bps, respectively, on lower d/d volume. Immediate support for the indices is along their respective 10-DMA (4,966/15,698), followed by the 21-DMA (4,907/15,478). The distribution day count stands at three and two, respectively.
Market View
The S&P 500 and Nasdaq rose for a fourth straight week, grinding higher in relatively light volume. We did pick up one distribution day on the S&P 500 and two on the Nasdaq, but overall the count still remains low. We con-tinue to anticipate a pullback in the major averages after such a sharp move higher. On the S&P 500, we would like to see 2120 hold, but ultimately we view the rising 50-day moving average as a key support level. On the Nasdaq, we view 5000 as a strong support level, but could see the index trading down to ~4970 while still re-maining constructive.
Market View
The S&P 500 and Nasdaq rose for a fourth straight week, grinding higher in relatively light volume. We did pick up one distribution day on the S&P 500 and two on the Nasdaq, but overall the count still remains low. We con-tinue to anticipate a pullback in the major averages after such a sharp move higher. On the S&P 500, we would like to see 2120 hold, but ultimately we view the rising 50-day moving average as a key support level. On the Nasdaq, we view 5000 as a strong support level, but could see the index trading down to ~4970 while still re-maining constructive.
Global Focus Emerging Long
Chinese markets advanced for a third consecutive week with the Shenzhen
rising 1.3% and the Shanghai climbing 2.2%. The Shenzhen has continued to
trend higher above its 40-week moving average, although the Shanghai has not
tested it since December 2015. A break above the 40-week moving average
for the Shanghai would be extremely positive, as it has not traded above it for
nearly a year. Markets have shown signs of bottoming since late March and
could be on their way to a sizeable move higher. Markets are in a Confirmed
Uptrend with only one distribution day for both indices.
Global Focus Emerging Long
Chinese markets continue to trend higher with the Shenzhen rising
more than 2% and Shanghai increasing 1.9% this week. The
Shenzhen edged higher for most of the week and is now trading at
the highest gap above the 40-week moving average since December
last year. The Shanghai has yet to break above its 40-week moving
average, trading 3-4% below it. The last time the Shanghai traded
above this resistance was nearly a year ago in August 2015. Volume
was strong, more than the previous week for both indices, which
is another positive sign. Markets are in a Confirmed Uptrend.
There are no distribution days for the Shenzhen as all have
dropped off in the recent market move.
Global Focus Emerging Long
Chinese markets had a strong week with the Shenzhen rising 3.7%
and the Shanghai advancing 2.7%. The Shenzhen is now trading above
the 40-week moving average, a level not achieved since December
2015. Volume was also strong coming in at over 1.5 times the average
weekly volume, which is encouraging. The Shanghai is still trading 5%
below the 40-week moving average and remains the weaker of the two
markets, although accumulation volume was strong after three weeks of
distribution. Markets have shifted to Confirmed Uptrend again and
going forward we look for the Shenzhen to hold above the 40-week
moving average. If momentum continues we view 2,400 as the
possible next level of resistance which would imply 22% upside.
Market View
U.S. indices continued the declines that began last week as Brexit fears increased, reflective of new poll figures favoring an “out vote.” However, the resiliency of the market remains impressive, trading 3% off highs and with only one distribution day on Monday for the Nasdaq. The market avoided a significant distribution on Thursday after it staged a strong upside reversal. The next week is likely to see similar volatility leading up to the Brexit vote on Thursday. We maintain a Confirmed Uptrend for the indices, as the distribution day count over the trail-ing five weeks is subdued at three each for the S&P 500 and Nasdaq and they continue to trade constructively in ranges established since April. We would change our view should distribution days increase and if the indices are unable to find support at their moving averages.
Market View
A slew of disappointing earnings from multiple mega-cap bellwethers led to some divergence in the major U.S. averages. The S&P 500 ended the week up half a percent, while the Nasdaq fell 0.6%. Alphabet, Visa, Mi-crosoft, and Starbucks all underwhelmed, resulting in a 1.5% decline for the Nasdaq 100 on Friday. Earnings are now beginning to play a critical role in the overall action of the indices. Currently, we remain above support levels and are still holding trend.
