On Thursday, the Stoxx 600 ended the day 9% below last Friday’s close. During the week, we downgraded France, Germany, the U.K., the Stoxx 600, Ireland, Finland, Norway, Sweden, Switzerland, Austria, Italy, Portugal, Spain, Belgium, the Netherlands, and Luxembourg to a Downtrend. Denmark was downgraded to an Uptrend Under Pressure from a Confirmed Uptrend. Of the 17 indices we cover, 16 are in a Downtrend, and one is in an Uptrend Under Pressure.
Author: Saminathan Jaganathan
Global Focus Developed
Australia’s ASX All Ordinaries Index declined 9.94% this week and breached its 200-DMA support for the first time in last 52 weeks. We shifted the index to a Downtrend on Thursday as it declined below its 200-DMA support on high volume.
Global Focus Emerging
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%).
Global Focus Frontier
National Bank of Kuwait is the leading banking group in Kuwait in terms of assets, customer deposits, and customer loans and advances. Its strong leadership position across its product offerings will pave the way for its future growth.
China A Shares
The CSI 300 fell 3.6% for the holiday-shortened week on lower volume and was moved to an Uptrend Under Pressure as the distribution day count rose to six from four. The Wuhan coronavirus, which has infected more than 600 people and killed 17 people as of January 23, hurt investors’ risk appetite substantially. Stocks related to retailing, leisure services, airlines, and films suffered from strong selling pressure. The CSI 300 breached previous support at ~4,100 and tested 50-DMA support. The next immediate support is at ~3,925. We are looking for a reliable solution to control the epidemic in order to increase our conviction. Investors are advised to stay cautious and focus on quality ideas with strong expectations approaching earnings season.
US Focus
The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq staged downside reversals Friday, closing at their respective 10-DMA. Distribution rose to four and three days, respectively. We are now looking for indices to find support at their respective 21-DMA (S&P 500: 3,271; Nasdaq: 9,179) should weakness persist early next week. We will likely shift the market status to Uptrend Under Pressure should this level break as the next level of support is the 50-DMA, which is 3-5% below current levels.
European Focus
On Thursday, the Stoxx 600 ended the day 1.07% below last Friday’s close and remained in a Confirmed Uptrend. Of the 17 indices we cover, 14 are in a Confirmed Uptrend, two are in an Uptrend Under Pressure, and one in a Rally Attempt.
Global Focus Developed
Australia’s ASX All Ordinaries Index was up 0.32% and hit an all-time high this week. The index added one distribution day and remains in a Confirmed Uptrend. Currently, it has four distribution days, and two days will expire next week.
Global Focus Emerging
The CSI 300 fell 3.6% for the holiday-shortened week on lower volume and was moved to an Uptrend Under Pressure as the distribution day count rose to six from four. The Wuhan coronavirus, which has infected more than 600 people and killed 17 people as of January 23, hurt investors’ risk appetite substantially. Stocks related to retailing, leisure services, airlines, and films suffered from strong selling pressure. The CSI 300 breached previous support at ~4,100 and tested 50-DMA support. The next immediate support is at ~3,925. We are looking for a reliable solution to control the epidemic in order to increase our conviction. Investors are advised to stay cautious and focus on quality ideas with strong expectations approaching earnings season.
Global Focus Frontier
National Bank of Kuwait is the leading banking group in Kuwait in terms of assets, customer deposits, and customer loans and advances. Its strong leadership position across its product offerings will pave the way for its future growth.
