On Thursday, the Stoxx 600 ended 0.89% below last Friday’s close. All the 17 indices we cover are in a Confirmed Uptrend.
Tag: Confirmed Uptrend
China A Shares
The CSI 300 rose 1.56% this week on lower volume. We upgraded the market to a Confirmed Uptrend after Tuesday’s follow-through day on the fourth day of a Rally Attempt. There are no distribution days.
European Focus
On Thursday, the Stoxx 600 ended 3.79% below last Friday’s close. During the week, we upgraded Finland, Norway, Italy, and the Netherlands to a Confirmed Uptrend and Denmark, Sweden, Switzerland, Portugal, and Spain to a Rally Attempt. Of the 17 indices we cover, six are in a Confirmed Uptrend, seven are in a Rally Attempt, and four are in a Downtrend.
China A Shares
The CSI 300 surged 5.04% on lower volume this week. We shifted the market back to a Confirmed Uptrend from under pressure after seeing a strong rise Thursday. The number of distribution days fell to two, with one expiring. China’s market remains constructive and continues to stand out among global markets. The coronavirus epidemic is on track to be under control and is believed to bottom out going forward. China’s government announced the speedy construction of new infrastructure, such as 5G networks, data centers, new energy vehicle charging stations, and AI, to combat economic pressure. Investors are advised to focus on beneficial sectors and select leaders with healthy fundamental and technical profile. Meanwhile, avoid extended names because profit-taking pressure would increase should the overseas correction continued. The CSI 300 has immediate support at the 50-DMA ~4,050 (-2%), followed by the 100-DMA ~4,000 (-3%). The next resistance is January highs of ~4,220 (+2%).
China A Shares
The CSI 300 fell 5.05% this week, registering its biggest weekly loss since last April. The number of distribution days increased to three and we shifted the market to an Uptrend Under Pressure from a Confirmed Uptrend as the CSI 300 broke below its 50- and 100-DMA Friday. Rising fears of the coronavirus spreading outside China triggered selloffs around the world. China, seemingly unaffected the first few days of the week, joined the U.S. market in a correction. Previously leading technology stocks suffered more losses: the ChiNext index plunged nearly 7% this week on higher volume. We advise a defensive approach amid rising coronavirus concerns worldwide and trimming positions in extended names. As companies release their preliminary earnings reports for FY19, investors should watch for disappointing results. The CSI 300 is now trading 0.7% below its 100-DMA. Next support lies at the 200-DMA or ~ 3,870 (-1.7%).
Market View
U.S. Market
The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq pulled back to their respective 21-DMA
after making new all-time highs earlier in the week. Distribution did rise over the last several sessions, though
one day will expire on both indices next week. We will likely shift the market status back to an Uptrend Under
Pressure should indices close below the 21-DMA in the coming days. The next level of support below the 21-
DMA is the 50-DMA (S&P 500: 3,274, -1.9%; Nasdaq: 9,228, -3.8%).
Nine of 11 sectors, 110 of 197 industry groups, and 56% of S&P 500 stocks are trading above their respective
50-DMA.Technology and Consumer Cyclical pulled back sharply Friday, falling 2.3% and 1.6%, respectively.
Health Care, Consumer Staple, and Utility closed relatively flat on the session. The best performing industry
groups over the last several sessions include Mining ( PAAS ), Reits ( DLR ), Utilities ( PNW ), Building Products/Services ( DOOR ), Home Builders ( LGIH ), and Pharmaceuticals ( ABBV ). The worst performing groups include Semiconductors ( COHR ), Software (ZS ), Toys ( HAS ), Travel Booking ( BKNG ), and Oil & Gas ( DVN ).
China A Shares
The CSI 300 rose 4% on much higher volume this week. We upgraded the market to a Confirmed Uptrend from a Rally Attempt on February 17 as it registered a follow-through day. Major stock indexes rose as Chinese authorities launched new stimulus measures to steady the economy and curtail the impact of the coronavirus outbreak. Investors’ risk preference has improved on China’s strong credit growth in January and the expectation of more stimulus measures. Technology stocks continue to outperform, driving the tech-heavy ChiNext index to three-year highs. The CSI 300 retook its 50-DMA on high volume and hit new rally highs. As momentum has remained strong since February 3, we expect increased pullback pressure on the market. Investors are advised to stay patient and avoid chasing extended ideas. Select leading names that are trading constructively within a buy area. We see the CSI 300’s the next resistance near January highs of 4,200 and next support at the 50-DMA (~4,000) in the near term.
US Focus
The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq pulled back to their respective 21-DMA after making new all-time highs earlier in the week. Distribution did rise over the last several sessions, though one day will expire on both indices next week. We will likely shift the market status back to Uptrend Under Pressure should indices close below the 21-DMA in the coming days. The next level of support below the 21-DMA is the 50-DMA (S&P 500: 3,274 (-1.9%); Nasdaq: 9,228 (-3.8%).
Market View
U.S. Market
The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq continue to trend into higher highs,
above all major moving averages. Near-term support remains the rising 10- and 21-DMA. Distribution stands at
three days each with one day expiring on the Nasdaq next week.
Nine of 11 sectors, 117 of 197 industry groups, and 66% of S&P 500 stocks are trading above their respective
50-DMA. Eight sectors rose 1% or more this week, led by Retail, Utility, Technology and Consumer Cyclical
which rallied ~2% each. The best performing industry groups over the last several sessions include Solar (RUN),
Telecom (TMUS), Wholesale Drugs (MCK), Managed Care (UNH), Semiconductors (NVDA), and Software (AYX).
The worst performing groups include Coal (CNX), Oil & Gas (MRO), Auto Parts (GT), and Computer Networking
(ANET).
US Focus
The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq continue to trend into higher highs, above all major moving averages. Near-term support remains the rising 10- and 21- DMA. Distribution stands at three days each with one day expiring on the Nasdaq next week.
