The CSI 300 gained 1.71% on higher and above average volume. The market remains in a Confirmed Uptrend with the number of distribution days decreasing to three. The index made a new high of ~5,090 (+0.5%) Wednesday, with no clear resistance until June 2015’s high (5,380, +6.2%). The Trump administration plans to add China’s top chipmaker SMIC and national offshore oil and gas producer CNOOC to a blacklist of companies with military ties to restrict them from buying U.S. goods and technologies. Official manufacturing and non-manufacturing PMI in November were 52.1 and 56.4, respectively, both higher than October. November’s Caixin manufacturing and services PMI for small business were 54.9 and 57.8, both hitting new highs since 2010. Market sentiment was boosted by improving economic activity despite rising U.S.-China tensions. Health Care, Consumer Staple, and Technology rebounded after a period of consolidation. Low-valuation sectors such as Real Estate and Utility retreated. We look for the index to be more bullish if leading sectors can hold up constructively without quick sector rotation. We advise investors to focus on quality stocks breaking out of proper bases or key resistance levels and avoid chasing highs.
Tag: Confirmed Uptrend
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq are trending into new all-time highs after clearing out from consolidation this week. Near-term support for both indices remains this rising 10-DMA (S&P 500: 3,642; Nasdaq: 12,215). The distribution day count declined, falling to four and three, respectively, with no further expiration next week.
Market View
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq are trading at all-time highs. Sup-
port remains the rising 10- and 21-DMA (S&P 500: 3,546; Nasdaq: 11,790). Each index has six distribution
days, however three expire on each next week, including one on Monday.
China A Shares
The CSI 300 gained 0.76% on slightly higher volume. The market remains in a Confirmed Uptrend with the number of distribution days decreasing to four. The index made a new high of ~5,030 Monday but trended downward the following two sessions and reversed back to hold above the 10- DMA. The index faced resistance at Monday’s high (5,030, +1.0%) and support lies at the 21-DMA (4,890, -1.8%). Industrial profits in October rose 28.2% y/y, significantly higher than September’s 10.1%, mainly due to accelerating chemical product manufacturing growth. Low-valuation sectors Financial and Energy led the market this week. Health Care lagged on the news of a second round of collective medical supply purchases. Consumer Cyclical underperformed mainly due to the pullback of home appliance stocks. Sector rotation has been quick and there has been no consistent leadership after the index retreated from 5,030 Tuesday. We expect the CSI to remain in consolidation and advise investors to adopt a selective approach amid current strong sector rotation.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq are trading at all-time highs. Support remains the rising 10- and 21-DMA (S&P 500: 3,546; Nasdaq: 11,790). Each index has six distribution days, however, three expire on each next week, including one on Monday.
European Focus
On Thursday, the Stoxx 600 ended 0.52% above last Friday’s close. Of the 17 indices that we cover, 16 are in a Confirmed Uptrend and one is in an Uptrend Under Pressure.
Market View
U.S. Market
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq traded relatively flat on the week,
consolidating within 2% of all-time intraday highs. Both indices tagged and held 10-DMA support this week.
Support below that level remains the rising 21-DMA (S&P 500: 3,512; Nasdaq: 11,665). The distribution day
count stands at seven and six, respectively, with one day expiring on the S&P 500 next week.
China A Shares
The CSI 300 gained 1.78% on slightly lower but above average volume. The market remains in a Confirmed Uptrend with five distribution days. The index consolidated around its 50-DMA, with resistance at recent highs of ~5,000 (+1.1%) and support at the 21-DMA (4,830, -2.3%). Sentiment hurt by recent bond market defaults improved on optimism about the Regional Comprehensive Economic Partnership signed last weekend and mixed but improving economic data Monday. Property developers, with relatively low valuation, led the gain as improving starts, completions, and sales data increased its attractiveness. Financials outperformed, with banking and insurance rallying on a better domestic economic outlook. Materials and energy were strong on hopes of improving demand strengthened by recent vaccine progress. Consumer cyclical was up, driven by automobile stocks after the government launched fresh stimulus to encourage auto consumption. Selling pressure in long-term leading COVID-19 beneficiaries, mainly health care and information technology, continued. We expect the CSI to remain in consolidation and recommend that investors stay patient and adopt a selective approach amid current strong sector rotation.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq traded relatively flat on the week, consolidating within 2% of all-time intraday highs. Both indices tagged and held 10-DMA support this week. Support below that level remains the rising 21-DMA (S&P 500: 3,512; Nasdaq: 11,665).
Market View
U.S. Market
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq are trading near all-time highs,
holding above 21-DMA support (S&P 500: 3,466; Nasdaq: 11,532) after reversing off intraday highs on Mon-
day. The distribution day count stands at seven and six, respectively, with one expiring on the S&P 500 Monday
and another on Tuesday.
