European Weekly Summary

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • We are yet to see a follow-through day on the Stoxx 600. Majority of the indices in Europe are in a Rally Attempt. European Equities had a muted week, with most ending flat on a close-to-close basis. Most majors have held their support levels and key moving averages since bouncing off their March 20 lows.
  • We recommend a cautious but selective approach to adding risk, with a focus on high relative strength ideas that are part of leading and/or improving industry groups.
  • Sector participation was mixed. Energy and Utility led the advance, while Transportation and Capital Equipment led the decline. On our rotation chart, Consumer Staple, Technology, and Retail are showing improvements in their short-term momentum. All other sectors are lagging in their short-term momentum (over four weeks).
  • European Focus List Update:
  • Actionable names include Deutsche Boerse (Xet) (DB1X.DE; DB1 GR), ASM International (ASIN.NL; ASM NA), Straumann Holding (STMN.CH; STMN SW), Edenred (EDEN.FR; EDEN FP), Evolution (EVOG.SE; EVO SS), Ferrari (Mil) (RACE.IT; RACE IM), Wolters Kluwer (WSG.NL; WKL NA), Compass Group (CPG.GB; CPG LN), ASML Holding (ASML.NL; ASML NA), and Swedish Orphan Biovitrum (SOBI.SE; SOBI SS).
  • Addition: ASM International (ASIN.NL)
  • Removal: Sika (SIKA.CH)

European Weekly Summary

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The Stoxx 600 logged a 4% gain last week bouncing off its March 20th lows. It regained all its moving averages including the 21 and 50-DMA and is now trading 2% off highs and 20% off lows. The index remains however in a Rally attempt as it didn’t record a Follow Through day last week (unlike the Nasdaq) which would have given us more conviction of an established uptrend. Thus, we remain cautious in adding risk as breadth overall remains poor. We recognize however few pockets of strength that are currently working in this environment such as Large cap staples and Tech.
  • All indices participated in the rally and closed in the green, with Retail, Energy, and Capital Equipment leading the gains. On our rotation chart, Transportation, Tech, Retail, Cyclical, and Capital Equipment are showing improvements in their short-term momentum. All other sectors are lagging in their short-term momentum (over four weeks).
  • European Focus List Update:
  • Actionable names include Deutsche Boerse (Xet) (DB1X.DE; DB1 GR), Burckhardt Compression (BCHN.CH; BCHN SW), Straumann Holding (STMN.CH; STMN SW), Nibe Industrier (NIBE.SE; NIBEB SS), Epiroc A (EPIA.SE; EPIA SS), Edenred (EDEN.FR; EDEN FP), Evolution (EVOG.SE; EVO SS), Ferrari (Mil) (RACE.IT; RACE IM), Infineon Technologies (Xet) (IFXX.DE; IFX GR), Wolters Kluwer (WSG.NL; WKL NA), Compass Group (CPG.GB; CPG LN), Edenred (EDEN.FR; EDEN FP), Asml Holding (ASML.NL; ASML NA), and Swedish Orphan Biovitrum (SOBI.SE; SOBI SS).
  • Addition: Deutsche Boerse (Xet) (DB1X.DE)

European Weekly Summary

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 European Equities closed the week in the red, erasing marginal gains on Friday. Indices were flattish amid a slew of earnings during the week. The indices
are still acting constructively near their short-term moving averages, above which they are holding since early January. The Stoxx 600, along with 12 other
indices are in a Confirmed Uptrend and the average distribution count in Europe is at 2.9.
 We recommend an incremental but a selective approach to adding risk. Focus on high relative strength ideas that are part of leading and/or improving
industry groups.
 Energy outperformed last week while Retail, Basic Material, and Cyclical led the underperformance. On our rotation chart, Technology and Health Care
are showing improvements in their short-term momentum. Most other sectors are lagging in their short-term momentum (over four weeks).
o European Focus List Update: Actionable names include Swedish Orphan Biovitrum (SOBI.SE; SOBI SS), Saab B (SAAB.SE; SAABB SS), Ashtead Group
(AHT.GB; AHT LN), Asml Holding (ASML.NL; ASML NA), Bic (BIC.FR; BB:FP), Deutsche Telekom (Xet) (DTEX.DE; DTE GR), Finecobank Spa (FCBK.IT; FBK
IM), Moncler (MONC.IT; MONC IM), and Relx (REL.GB; REL LN)
o Addition: Saab B (SAAB.SE) and Swedish Orphan Biovitrum (SOBI.SE)
o Removal: Aixtron (Xet) (AIXAX.DE) and Terna Energy (TEN.GR)