On Thursday, the Stoxx 600 closed 1.8% below last Friday’s close. The index remains in a Confirmed Uptrend but with an elevated distribution day count of five. We downgraded the U.K., France, Norway, and Sweden markets to an Uptrend Under Pressure after they breached their respective 50-DMA support. Of the 17 indices we cover, six are now in an Uptrend Under Pressure while the others are in a Confirmed Uptrend
Author: Midhun Parameswaran
Global Focus Developed
Australia’s ASX All Ordinaries Index declined 2.2% this week. The index closed at a new 52-week high and has immediate support along its 21-DMA (-2%). It is in a Confirmed Uptrend. It has four distribution days currently, after adding two this week. One distribution day will expire next week.
Global Focus Emerging
The CSI 300 ended 3.57% lower on higher and above average volume this week. The market was shifted to an Uptrend Under Pressure following a greater than 2% loss on higher volume Tuesday. The distribution day count increased to three from one last week. The index tested but failed to break above short-term resistance at its 5- (~4,861, +1.9%) and 21-DMA (~4,913, +3.0%). Support lies at July 28’s low (~4,664, -2.2%) followed by July 2020’s low (~4,500, -5.6%).
Global Focus Frontier
Ho Chi Minh City Development Joint Stock Commercial Bank (HD Bank) is one of the top banks in Vietnam and is a constituent of the VN30 Index. Its industry-leading growth and key financial ratios, along with its exposure to the consumer finance industry, will drive its growth.
China A Shares
The CSI 300 gained 0.5% on lower but above average volume this week. The market remains in a Confirmed Uptrend with one distribution day. The index ended below the short-term 5- (4,993, +1.0%) and 21-DMA (~4,975, +0.6%), pulling back off its weekly high. Support is at July 28’s low (~4,664, -5.7%) and resistance is at ~5,100 (+3.1%), the lower edge of the consolidation range since June this year and where the 50-, 100- and 200-DMA sit. Sentiment was dampened by weaker-than-expected growth in total social financing (RMB 1.06T versus consensus of RMB 1.52T). The domestic economic recovery is slowing, indicated by lower-than-expected trade data on falling demand. A faster-than-expected surge of factory-gate prices is adding to business cost pressures. Banks, developers, and food & beverage companies rallied after months of pullback, while semiconductor stocks sold off. Auto and clean energy fluctuated over the week, with mixed performance by individual stocks. Upward momentum was weak with quick sector rotation on position rebalancing. Upcoming earnings also increased market volatility. We would like to see the CSI 300 regain its 5- and 21-DMA to be constructive. Investors should stay patient and focus on stocks with sound fundamentals and strong technical profiles.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 is trending into all-time highs, while the Nasdaq continues to consolidate within 1% of a new high and above 21-DMA support. Distribution has mostly been avoided over the last two weeks, with the count now standing at four each, with two set to expire on the S&P 500 and three on the Nasdaq next week.
European Focus
On Thursday, the Stoxx 600 ended 1.04% above last Friday’s close. Of the 17 indices we cover, 15 are in a Confirmed Uptrend and two in an Uptrend Under Pressure. This week, we upgraded Germany, the U.K., Austria, Ireland, and Italy to a Confirmed Uptrend after they reclaimed their prior rally high.
Global Focus Developed
Australia’s ASX All Ordinaries Index gained 1.2% this week. The index closed at a new 52-week high and has immediate support along its 21-DMA (-2%). It is in a Confirmed Uptrend and has three distribution days. One distribution day will expire next week.
Global Focus Emerging
The CSI 300 gained 0.5% on lower but above average volume this week. The market remains in a Confirmed Uptrend with one distribution day. The index ended below the short-term 5- (4,993, +1.0%) and 21-DMA (~4,975, +0.6%), pulling back off its weekly high. Support is at July 28’s low (~4,664, -5.7%) and resistance is at ~5,100 (+3.1%), the lower edge of the consolidation range since June this year and where the 50-, 100- and 200-DMA sit.
Global Focus Frontier
o Chi Minh City Development Joint Stock Commercial Bank (HD Bank) is one of the top banks in Vietnam and is a constituent of the VN30 Index. Its industry-leading growth and key financial ratios, along with its exposure to the consumer finance industry, will drive its growth.
