The CSI 300 fell 0.68% on higher, above average volume. The market remains in a Confirmed Uptrend with the number of distribution days increasing to five. The index hit a new high of 5,645 Wednesday but pulled back the following two sessions. It faces resistance at the new high (5,645, +3.2%) and had support at the 21-DMA (5,244, -3.9%). December CPI and PPI rose 0.20% and fell 0.4% y/y, respectively, stronger than expectations and previous readings. December’s liquidity data fell versus November and M2 rose 10.10% y/y, slightly lower than expectations of 10.66%. Incremental RMB loans were RMB 1.26T, higher than consensus of 1.21T. Social financial was RMB 1.72T, lower than the previous 2.13T. December exports and imports rose 18.1% and 6.5% y/y (in $), respectively, stronger than expectations. Low-valuation sectors Communication Service, Financial, and Real Estate led the market this week while long-term leading sectors Consumer Staple, Defense, and EV retreated. Market sentiment was dampened by the surge of COVID-19 cases and tightening liquidity data. We noticed that capital is flowing out of those leading and large-cap stocks and searching for new ideas. We expect the index to be range-bound in the near term considering the recent rally and consolidation of leading stocks. We advise investors to stay disciplined and focus on quality stocks breaking out of proper bases. Avoid chasing extended ideas.
Tag: Confirmed Uptrend
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq pulled back off alltime highs this week, consolidating sharp gains over the last several weeks. Despite the pullback, both indices held above their respective 21-DMA (S&P 500: 3,747; Nasdaq: 12,860) while avoiding any big pick up in distribution.
Market View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq made new all-time highs for a sec-
ond straight week, continuing to hold trend above their respective 21-DMA (S&P 500: 3,718; Nasdaq: 12,732).
The distribution day count stands at four each, with one day expiring on each index next week.
China A Shares
The CSI 300 rose 5.45% on significantly higher volume. The market remains in a Confirmed Uptrend with four distribution days. The index hit new highs for four consecutive sessions but closed with a loss on Friday. The index now faces resistance at new highs at 5,547 (+0.9%), with the next resistance at January 2008’s high of 5,730 (+4.3%). December’s Caixin manufacturing and service PMI were 53.0 and 56.3, respectively, both lower than November’s readings but still in the expansion range. New energy vehicle battery-related, solar energy, and defense stocks led the gain due to high growth expectations in 2021. Consumer Staple also surged as dairy product prices increased. We noticed that capital clustered around leading and large-cap companies. We expect the index to remain range-bound in the near term after the recent rally and advise investors to focus on quality stocks with sound fundamentals breaking out of proper bases. Avoid chasing highs.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq made new alltime highs for a second straight week, continuing to hold trend above their respective 21-DMA (S&P 500: 3,718; Nasdaq: 12,732). The distribution day count stands at four each, with one day expiring on each index next week.
European Focus
On Wednesday, the Stoxx 600 ended 2.37% above last Thursday’s close. Of the 17 indices that we cover, 15 are in a Confirmed Uptrend and two in an Uptrend Under Pressure. During the week, we shifted Finland, Ireland, Spain to a Confirmed Uptrend after they reached their respective new rally high.
China A Shares
The CSI 300 advanced 3.4% on slightly higher-than-average volume this holiday-shortened week. The market remains in a Confirmed Uptrend with five distribution days. The index broke above the previous high of 5,090 (-0.5%), with no clear resistance until June 2015’s high (5,380, +5.2%). We look for immediate support of the 21-DMA at ~5,012 (-3.8%), followed by the 50-DMA at 4,934 (-5.3%). Industrial profit and PMI data continue to show an economic recovery. Positive progress in a Sino-Europe investment agreement lifted the market’s mood ahead of the New Year’s holiday. We maintain a positive view of the market as the index holds its trend. We recommend investors follow a disciplined and selective approach and buy ideas breaking out of sound bases with rising relative strength. Avoid and trim ideas that are extended.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq closed the year at all-time highs and above all major moving averages with limited distribution. Near-term support remains the rising 10- and 21-DMA (S&P 500: 3,689; Nasdaq: 12,612). The distribution day count stands at four and two, respectively, with one day expiring on the S&P 500 next week.
European Focus
On Wednesday, the Stoxx 600 ended 1.08% above last Thursday’s close. Of the 17 indices that we cover, 10 are in a Confirmed Uptrend and seven in an Uptrend Under Pressure. During the week, we shifted Portugal, Germany, Ireland, Switzerland, and the Netherlands to a Confirmed Uptrend after they reached their respective new rally high.
Market View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq continue to display constructive
technical action, trading at or near all-time highs and above all major moving averages with limited distribution.
Support remains the rising 10- and 21-DMA (S&P 500: 3,668; Nasdaq: 12,492). The distribution day count
stands at five and two, respectively, with one day expiring on the S&P 500 next week.
