Key points from this week’s report:
Please refer to the attached PDF for the full report.
- The Stoxx 600 (EXSA.DE) has successfully held its June 23 low and remains in a Rally Attempt. Over the past week, the index continued to consolidate along
Author: Tristan d'Aboville
Tristan d’Aboville is an Executive Director, Research Analyst, managing the European Research Product.
Mr. d’Aboville has more than 16 years of experience in equity research and sales. Since joining the firm in 2012, he has applied his client-centric style with analysts and portfolio managers, anticipating and exceeding their needs. He writes the well-received weekly European commentary, and follows it with a client conference call to discuss findings.
Prior to William O’Neil + Co., Mr. d’Aboville was a top-producing salesperson at Kepler Capital Markets, formerly known as Julius Baer, and at Natixis Bleichroeder, covering European equities for large U.S. institutional clients. He started his career as an equity analyst at Aurel-BGC, later moving to Natixis Bleichroeder, where he became the lead analyst for the European Hotels, Leisure and Catering Sector. He was recognized as a Top Analyst for Predictability & Recommendations by AQ Publications in 2003. Extel named him one of the top three European analysts covering the business services and hotel & leisure industries. Prior to the securities industry, Mr. D’Aboville was an auditor with Arthur Anderson.
Mr. d’Aboville earned a Master of Science in Managerial and Financial Economics from ISC Paris School of Management. Later, he studied Global Affairs at New York University. He is a Certified International Investment Analyst (CIIA).
A sportif, Mr. d’Aboville enjoys kite surfing, sailing, skiing, tennis, chess, and spending as much of his free time as possible with his wife, young daughter, and son.
O’Neil Consumer/Retail Weekly
Consumer Staples (XLP): The index fell ~1.6% in the past one week and breached its 100- and 200-DMA on above average volume. It is trading below all its key moving averages. Support is at $79.3 (-1%), followed by $77.2 (-3.7%).
Best-performing IGs: Food-Packaged and Food-Confectionary were the Industry Groups which showed improvement over the last four weeks, with the rank improving to 112 from 152 and 108 from 127, respectively. Food-Misc Preparation and Beverages-Alcoholic were the other Industry Groups which showed improvement over the last few weeks. Tobacco remains the top rated Industry Group with a Rank of #19.
Worst-performing IGs: Food- Meat Products has been the worst-performing group in the last eight weeks, with Group Rank declining to 162 from 71. Beverages-Non-Alcoholic also saw the Industry Group Rank declining to 77 from 42 in the last eight weeks. Soap & Cleaning Preparations and Food-Meat Products are the lowest rated Industry Groups with Group Ranks of #163 and #162.
Consumer Cyclical (XLY): The discretionary index traded flat during the week and is testing support at its near-term moving averages. Next level of support at its converging 50 and 200-DMA. It forms a stage-two consolidation base, trading 9% from pivot. Acc/Dist Rating deteriorated below one during the week suggesting selloff. Up/Down Volume ratio weakened slightly but remains constructive. RS line is trending sideways with an RS Rating of 69. Add risk in quality names that are breaking out of proper bases or holding their logical support levels in improving industry groups.
European Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- Last week, European indices closed mostly higher. Most European markets are trading above their short-term moving averages and are near/at their 52-week high. France, Germany, the U.K., Finland, Sweden, Austria, and the Netherlands gained 1–2%. Meanwhile, Denmark underperformed, declining ~1.1%. The index is facing heavy resistance at the 50-DMA and trading 39% off its 52-week high. Switzerland declined 0.3% and is facing resistance at the 200-DMA, while Norway fell 0.2% and is 2% off its 52-week high. Italy and Portugal declined 0.5–0.7%, after hitting a new 52-week high during the week. France’s CAC 40 retook all its key moving averages after bouncing off the 200-DMA. The index is 5% off its 52-week high.
- Last week, sector performance was mostly positive. Transportation (+2.6%) led the gains, followed by Consumer Cyclical (+2.5%) and Capital Equipment (+2.1%). Energy, Financial, Basic Material, and Technology gained 1.5–2.0%. Retail was up 0.5%. Utility (-1.3%) lagged the most, while Consumer Staple and Health Care fell less than 0.5%.
- We remain constructive on the European markets as indices continue to consolidate near their 52-week highs. Indices continue to trade constructively above their short-term moving averages, with nine major indices now in a Confirmed Uptrend.
O’Neil Consumer/Retail Weekly
Consumer Staples (XLP): The index fell ~0.8% in the past one week and breached its 21- and 50-DMA on above average volume. Support is at its 100-DMA (-0.2%), followed by its 200-DMA (-0.6%).
Best-performing IGs: Food-Confectionary and Food-Packaged were the only Industry Groups which showed improvement over the last four weeks, with the rank improving to 126 from 135 and 138 from 152, respectively. Tobacco remains the top rated Industry Group with a Rank of #16.
European Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- The Stoxx 600 declined ~0.4% last week, trading below both its 50-DMA and 21-DMA and now sits ~4% below its 52-week highs. The index remains in a Rally Attempt, having held above the June 23 lows. The window remains open for a follow-through day (FTD); if one occurs, the market status would be upgraded to a Confirmed Uptrend. Conversely, a break below the June 23rd lows would shift the index back into a Downtrend.
O’Neil Consumer/Retail Weekly
Consumer Staples (XLP): The index rose ~4% in the past one week and reclaimed all its key moving averages. It is trading 2% below the pivot of its recent stage-one flat base, which is its immediate resistance level. Next resistance is at $84.35 (+3%). Support is at the confluence of its 10- and 21-DMA (-1.5%), followed by the confluence of its 100- and 200-DMA (-2%).
European Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- The Stoxx 600 is in a Rally Attempt. The index gained approximately 1.3% last week and is currently trading around its 50-DMA, slightly below the 21-DMA. It remains 3% off its 52-week high. Most European markets closed higher last week, with several indices rebounding from recent lows and reclaiming short-term moving averages. However, Denmark, which is in a Downtrend, underperformed significantly, falling ~4% and dropping back below all key moving averages; it now sits 40% below its 52-week high. Norway, in a Confirmed Uptrend, declined 2.7% from its all-time high and broke below its 21-DMA. The U.K. FTSE 100 (Rally Attempt) rose modestly by 0.3%. Sweden, in a Confirmed Uptrend, reclaimed its 50-DMA, while Switzerland (Rally Attempt) remains below all key moving averages, both trading 9% off their 52-week highs. France (Rally Attempt) is 7% off its 52-week high and trading around its 50- and 200-DMAs.
- Sector performance was broadly positive, led by strong gains in Capital Equipment (+3.8%), Technology (+3.3%), and Consumer Cyclical (+2.8%). Financials, Basic Materials, and Transportation rose 1–2%. Utilities and Retail edged up 0.2% each. Energy (-3.4%) and Consumer Staples (-2.5%) were the worst-performing sectors, while Health Care declined slightly by 0.3%. On our rotation graph, Utilities and Capital Equipment continue to show positive short-term momentum and remain in the leading quadrant (long-term outperformance). Financials and Retail continue to show muted momentum.
- Sector Score Cards – Stocks of Interest: Actionable, top-rated names (based on our fundamental quantitative ratings) currently breaking out of bases include Jungheinrich (JUN3X.DE), Airbus (AIRS.FR), HeidelbergCement (HEIX.DE), Holcim (HOLN.CH), Scatec (SCAT.NO), and Medicover (MEDI.SE, FL-rated). Deutsche Bank (DBKX) is also actionable but is emerging from a late-stage base.
- European Focus List update:
- Actionable names include Alk-Abello B (ALK.DK), Odfjell Drilling (ODDR.NO), Safran (SGM.FR), Medicover B (MEDI.SE), and Bawag Group (BWGP.AT).
- Addition: Odfjell Drilling (ODDR.NO) and Selcuk Ecza Deposu (SLC.TR).
- Removal: None.
O’Neil Consumer/Retail Weekly
Consumer Staples (XLP): The index rose ~1.1% in the past one week and reclaimed its 100- and 200-DMA. It is testing resistance at its 21-DMA. Next resistance is at its 50-DMA (+0.1%). Support is at its 10-DMA (-0.1%), followed by its 100-DMA (-0.4%)
European Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- The Stoxx 600 declined 2.5% last week and is now testing its 50-DMA support after breaching its 10- and 21-DMA the prior week. The index is in an Uptrend Under Pressure with five distribution days.
- Most European indices closed lower, with Denmark underperforming after declining ~6%, followed by Ireland, Italy, and Switzerland, which were down >2% each. On the positive side, Norway gained ~1%, hitting a fresh 52-week high, while Finland was up 0.3%. Most of the markets have now breached their 21-DMA and are set to test support at their 50-DMA. Denmark and Ireland were shifted to an Uptrend Under Pressure last week, while France was downgraded to a Downtrend. The average distribution stands elevated at 3.9.
- Sector performance was mostly negative except Energy (+1.3%). Utility and Financial were down slightly during the week. Health Care (-3.9%) lagged the most, followed by Transportation (-2.6%), while the remaining sectors were down 1.0–2.0%.
- We are turning increasingly more cautious on European markets as indices have breached their first level of support. The number of breakouts has declined by more than 50% in the last two weeks, with an increasing number of failed breakouts. Recent developments in the Middle East, particularly the risk of Iran closing the Strait of Hormuz following the U.S. strike, could further accelerate the negative earnings revisions already observed this year. Extended areas, such as banks, appear the most vulnerable in the event of a market pullback, driven by rising geopolitical tensions. A rotation into defensive sectors could accelerate under such a scenario.
- European Focus List Update:
- Actionable names include Bawag Group (BWGP.AT; BG:AV) and Safran (SGM.FR; SAF:FP).
- Addition: None.
- Removal: None.
European Weekly Summary
Key points from this week’s report:
Please refer to the attached PDF for the full report.
- The Stoxx 600 (EXSA.DE) was shifted to an Uptrend Under Pressure after the index breached its 21-DMA on rising distribution. Most European markets are pulling back from 52-week highs to their short-term moving averages. Germany, Finland, Austria, Spain, Belgium, and the Netherlands declined 1–3%, breaching their 21-DMA and subsequently were also moved to an Uptrend Under Pressure. On the positive side, Norway gained 3%, hitting a fresh 52-week high, while the U.K. and Portugal were slightly up and trending at a 52-week high. Denmark also outperformed, gaining ~2.5%, and retook resistance at 100-DMA, 35% off highs. France, Sweden, and Switzerland continue to underperform, 8–11% off 52-week highs and are set to test support at their 50-/200-DMA. The average distribution day increased to 4.2 from 3.3 last week.
- Last week, sector performance was mostly negative except for Energy (+5.2%), Utility (+1.5%), and Health Care (+0.7%). Financial (-3.0%) lagged the most, followed by Technology (-2.6%) and Retail (- 2.2%). The remaining sectors were down 1–2%.
- On the daily Datagraph@, the iShares Djsxx.600 Oil & Gas (EXH1.DE) is breaking out of a cup-with-handle formation; stocks of interest related to the industry include Weir Group (WEIR.GB) and Gtt (GTT.FR).
- Form our rotation chart, momentum in lagging (over 26-weeks) Health Care continues to improve; stocks of interest include: Ypsomed (YPSN.CH) and Eurofins (EUF.FR) are currently basing on improving technical characteristics. Refer to page 14.
- We turn cautious on the European markets as indices are extended with elevated distribution day counts and showing early signs of weakness. We recommend calculated risks when adding new ideas, as indices are breaking their first level of support. Reduce exposure in stocks that are extended or breaking key support levels/moving averages. Focus on ideas emerging from proper early-stage bases in constructive markets and sectors.
