Software (IGV): The software benchmark pulled back 3.3% last week on rising volume and is testing support at its 50-DMA ($353). The index is forming the right side of a stage-two flat base with a pivot of $371.56. Quantitative metrics are mixed, with its numerical A/D Rating turning negative while Up/Down Volume ratio improved slightly week-over-week. RS line is trading sideways, with an RS Rating of 88. If the index decisively breaches its 50-DMA, next support is at its 100-DMA ($336). Key stocks acting constructively include a mix of value (IBM, CTSH, among others) and GARP names (CDNS, SNPS). Growth stocks continue to act volatile and are at risk of further downside should the IGV breach its 50-DMA. Several large cap names are currently at or near key moving average supports (50-/100-DMA) – MSFT, CRM, ADBE, and NOW. Overall, monitor extended stocks and those breaking logical levels of support.
Author: Romeo Alvarez
Romeo Alvarez is a senior equity analyst at William O’Neil + Co., a registered investment advisor serving 400 top-performing institutional portfolio managers worldwide. The firm employs 150 associates in Los Angeles, New York, Boston, and London.
Based in the firm’s Los Angeles office, Mr. Alvarez is a senior equity analyst covering the Americas region and a member of the Global Focus List Committee, which approves all equity recommendations for developed, emerging, and frontier markets. Romeo also selects equity initiations to be covered in the Technology sector and regularly reports to clients on innovation and technology developments in Trend Watch.
Mr. Alvarez earned a B.S. in Business Economics from the University of California, Riverside, and an MBA with a focus in Finance from Loyola Marymount University, Los Angeles.
LATAM Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- Brazil’s Bovespa was up 3.0% last week. It remains in a Rally Attempt. We recommend clients wait for the market status to change to a Confirmed Uptrend to add risk in Brazilian equities.
- Mexico’s main benchmark was down 2.2% last week. It remains in a Downtrend. We recommend clients avoid adding risk in Mexican equities.
- The total number of Focus List stocks in the LATAM region remains at eight.
LATAM Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- Brazil’s Bovespa was down 2.2% last week. It remains in a Rally Attempt. We recommend clients wait for the market status to change to a Confirmed Uptrend to add risk in Brazilian equities.
- Mexico’s main benchmark was down 1.2% last week. It was shifted to a Downtrend from an Uptrend Under Pressure. We recommend clients avoid adding risk in Mexican equities.
- The total number of Focus List stocks in the LATAM region remains at eight.
- Stocks of interest: Petrobras (POB.BR; PETR4:BZ), Caixa Seguridade (CS6.BR; CXSE3:BZ), Mahle Metal (LV3.BR; LEVE3:BZ), Qualitas (QCC.MX; Q*:MM) and Vesta (VES.MX; VESTA*:MM). Additional names are listed on page 3.
O’Neil TMT Weekly
Software (IGV): The software benchmark is forming the right side of a seven-week cup base with a pivot of $371 and remains constructive. Quantitative metrics (RS Rating of 91 and A/D Rating of C+) continue to improve amid market volatility. Focus List ideas – CRM, NOW, and WDAY – as well as recent additions – CRWD and VEEV – continue to remain strong despite broader market weakness. Cybersecurity group continues to improve, with multiple ideas – CRWD, ZS, QLYS, PANW, and CYBR – trading nearing their pivot range. Key earnings this week include ADBE and ORCL.
O’Neil TMT Weekly
Software (IGV): The software benchmark bounced off price support near $333 after pulling back for three consecutive weeks.
However, the IGV remains below and is testing resistance at its 50-DMA ($348). Quantitative metrics remain mixed, with weak A/D
metrics, due to distribution over the last month. However, long-term metrics like RS line remain favorable. Very few growth ideas
(SPLK and QLYS) are setting up to break out, while most ideas (MSFT, HUBS, and CRM) are consolidating and testing their key
levels of support. Software industry groups have also slightly declined in rank. Although seven of the 11 groups are still ranked in the
top 50, most have dropped out of the top 20 from a month ago. Key earnings worth monitoring this week include CRM and CRWD on
Wednesday and MDB on Thursday.
LATAM Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- Brazil’s Bovespa was up 0.4% last week. The Brazilian market is in a Rally Attempt. We recommend clients avoid adding risk in Brazilian equities until we upgrade the market to an Uptrend.
- Mexico’s main benchmark ended flat last week. It remains in an Uptrend Under Pressure with four distribution days. We recommend clients selectively add risk in Mexican equities.
- The total number of Focus List stocks in the LATAM region remains at nine. Petro Rio (HRT.BR; PRIO3:BZ) and Oncoclínicas (ODB.BR; ONCO3:BZ) are actionable.
- Stocks of interest: Vivara (VPO.BR; VIVA3:BZ), Caixa Seguridade (CS6.BR; CXSE3:BZ), Gruma (GRM.MX; GRUMAB:MM), Qualitas (QCC.MX; Q*:MM), Vesta (VES.MX; VESTA*:MM), Grupo Cementos (GCC.MX; GCC*:MM) and Fomento Economico Mexicano (FMU.MX; FEMSAUBD:MM). Additional names are listed on page 3.
O’Neil TMT Weekly
Software (IGV): The software benchmark pulled back for the third straight week and closed ~1.5% lower. Support is at its
rising 100-DMA ($326), while resistance is seen at its 50-DMA ($347). Quantitative metrics are mixed but remained
steady week-over-week. RS Rating was unchanged at 87, while A/D Rating is weak at C. Within the broader software
universe, the only stocks currently at or near breakout levels include value ideas such as CHKP, CTSH, and PTC,
among others. Focus-List rated SNPS reported an overall beat set of results, but failed to reclaim its 50-DMA and is
basing. PANW (+12% pre-market) reported Q4 results and held its Analyst Day post market-hours on Friday. Key
earnings this week include ZM, SNOW, ADSK, WDAY, and SPLK. Overall, we remain cautious on the IGV, while
monitoring for ideas bouncing off logical levels of support.
LATAM Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- Brazil’s Bovespa was down 1.2% last week. It remains in an Uptrend Under Pressure with seven distribution days. We recommend clients selectively add risk in Brazilian equities.
- Mexico’s main benchmark was down 1.4% last week. It remains in an Uptrend Under Pressure with six distribution days. We recommend clients selectively add risk in Mexican equities.
- MercadoLibre (MELI) was added to the Focus List last week. The total number of Focus List stocks in the LATAM region increased to 11. Oncoclínicas (ODB.BR; ONCO3:BZ) and Alsea (ALE.MX; ALSEA* MM) are actionable.
- Stocks of interest: Rumo (P3M.BR; RAIL3:BZ), M. Dias Branco (MDB.BR; MDIA3:BZ), Weg (WG3.BR; WEGE3:BZ), Vivara (VPO.BR; VIVA3:BZ), Grupo Cementos (GCC.MX; GCC*:MM), Qualitas (QCC.MX; Q*:MM) and Gruma (GRM.MX; GRUMAB:MM).
O’Neil TMT Weekly
Software (IGV): The software benchmark pulled back 3.5% on rising volume after consolidating in a tight range over the prior three-weeks. The IGV breached its 21-DMA and is testing support at its 50-DMA ($344). Quantitative metrics have declined with its numerical A/D Rating turning negative for the first time in months, letter A/D Rating of C, and RS line breaking below its moving average. After strong price action into earning season, the number of stocks fading after posting good results continues to grow including HUBS and SHOP, most recently. Additionally, FTNT lowered its outlook which put selling pressure on peers (PANW and CHKP). Although most stocks are pulling back, TEAM and NET should be monitored and are attempting to emerge from a base consolidation after posting strong results. Key earnings this week include PLTR and DDOG. Overall, remain cautious as the IGV and constituents pull back to rising support.
LATAM Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- Brazil’s Bovespa was down 0.6% last week. It remains in an Uptrend Under Pressure with six distribution days. We recommend clients selectively add risk in Brazilian equities.
- Mexico’s main benchmark was down 1.7% last week. It remains in an Uptrend Under Pressure with five distribution days. We recommend clients selectively add risk in Mexican equities.
- We added Oncoclínicas (ODB.BR; ONCO3:BZ) to the Focus List, taking the total number of Focus List stocks in the LATAM region to 10. Oncoclínicas (ODB.BR; ONCO3:BZ), Rede Dor Sao Luiz (RD2.BR; RDOR3:BZ) and Grupo Mateus (GMO.BR; GMAT3:BZ) are actionable.
- Stocks of interest: Rumo (P3M.BR; RAIL3:BZ), Mahle Metal (LV3.BR; LEVE3:BZ), Weg (WG3.BR; WEGE3:BZ), Vivara (VPO.BR; VIVA3:BZ), Grupo Cementos (GCC.MX; GCC*:MM), Cemex (CMC.MX; CEMEXCPO:MM) and Gruma (GRM.MX; GRUMAB:MM). Additional names are listed on page 3.
