The CSI 300 declined 5.46% on higher and above average volume this week. The market was shifted to a Rally Attempt Friday after being downgraded to a Downtrend on a sharp selloff Monday. The index remains pressed by its short- and long-term moving averages. Immediate resistance lies at the 5-DMA (4,820, +0.2%) followed by the 21-DMA (~5,041, +4.8%).
Author: Midhun Parameswaran
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 fell 0.11% on lower but still above average volume this week. The market remains in an Uptrend Under Pressure with four distribution days. The index continued to consolidate around the 200-DMA (~5,120, +0.6%) with no clear support until May’s low of ~4,900 (-3.7%). The index faces next resistance at 100-DMA (5,133, +0.9%), 21-DMA (~5,140, +1.0%), and 50-DMA (~5,180, +1.8%). The loan prime rate, the country’s key benchmark lending rate, was unchanged in July for the fifteenth consecutive month. Basic Material and Industrial stocks led the market. Steel stocks rallied due to expectations of strong corporate earnings. EV and related sectors such as nonferrous metals and automobiles rallied. Military stocks also gained strongly. Consumer Staple and Health Care retreated sharply. The index has been consolidating around the tight area of 5,000– 5,200 with daily turnover mostly above RMB 1T since June. We advise investors to stay cautious in the highly volatile market with very quick sector rotation. Adopt a selective approach and pay attention to Q2 earnings. Focus on stocks with sound fundamentals and avoid chasing highs.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq rallied strongly off 50-DMA support early this week before gapping back to new all-time highs on Friday. Both are now pushing back towards their respective upper channel lines which are above 4,500 on the S&P 500 and 15,100 on the Nasdaq. Support is again the rising 10- and 21-DMA. The distribution day count declined to four and three, respectively, with no further expiration for two weeks
European Focus
On Thursday, the Stoxx 600 ended 0.40% above last Friday’s close. Of the 17 indices we cover, five are in a Confirmed Uptrend and 12 in an Uptrend Under Pressure. This week, we downgraded the Stoxx 600 and Belgium to an Uptrend Under Pressure
Global Focus Developed
Australia’s ASX All Ordinaries Index gained 0.5% this week. The index closed at a 52-week high. It is in a Confirmed Uptrend with five distribution days after adding one this week. One distribution day will expire next week.
Global Focus Emerging
The CSI 300 fell 0.11% on lower but still above average volume this week. The market remains in an Uptrend Under Pressure with four distribution days. The index continued to consolidate around the 200-DMA (~5,120, +0.6%) with no clear support until May’s low of ~4,900 (-3.7%). The index faces next resistance at 100-DMA (5,133, +0.9%), 21-DMA (~5,140, +1.0%), and 50-DMA (~5,180, +1.8%).
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 much higher and above average volume this week. The market remains in an Uptrend Under Pressure with four distribution days. The index continued to consolidate around the 200-DMA (~5,110, +0.3%), with no clear support until May’s low at ~4,900 (-3.8%). The index faces resistance at the 21-DMA (~5,140, +0.9%), 100-DMA (~5,150, +1.1%), and 50-DMA (~5,170, +1.5%). Q2 GDP grew 7.9% y/y, weaker than expectations of 8.4% y/y. June retail sales, industrial production, and fixed asset investment data were stronger than expected. Trade data came in stronger than expected in June, with U.S. dollar exports up 32.2% y/y (versus consensus of 21.4% y/y and the previous reading of 27.9% y/y) and U.S. dollar imports up 36.7% y/y (versus consensus of 26.2% y/y and the previous reading of 51.1% y/y). Cyclical sectors such as Steel, Energy, and Chemical led the market. Auto, Agriculture, and Semiconductor stocks lagged. Turnover stayed high, more than RMB 1T for twelve consecutive sessions. We advise investors to be cautious in the highly volatile market with very quick sector rotation. Adopt a selective approach and pay attention to Q2 earnings. Focus on stocks with sound fundamentals and avoid chasing highs.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq pulled back to their respective 21-DMA to close the week, with the Nasdaq closing just under that level of nearterm support. Should weakness persist, the next level of support on both indices is the rising 50- DMA which may coincide with the prior breakout highs. The distribution day count increased this week to five each, however, two are expiring on the S&P 500 and three on the Nasdaq next week.
