Tag: Confirmed Uptrend

Market View

Posted on by Raj Gupta

The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq both regained their respective 50-DMA. We will look
for this level to act as support should the market pullback. The next level of major resistance is the 200-DMA (S&P 500:
2,741 (+2.6%); Nasdaq: 7,451 (+4.1%)). Action remains constructive with just one distribution day on the S&P 500 and
zero on the Nasdaq.

Since the follow-through day, five sectors have rallied more than 10%, including Transportation and Consumer Cyclical,
which each rallied more than 11%. Further, nine of 11 sectors regained their respective 50-DMA, with only Utility and
Consumer Staple still trading below that level. The rally has been broad, led by industry groups across multiple sectors
including Apparel, Banks, Biotech, Brokers, Computer Tech Services, Internet, Medical Products, Mortgage Services, Rails,
Software, and Trucks, among others.

US Focus

Posted on by Midhun Parameswaran

Te U.S. market is in a Confrmed Uptrend. Te S&P 500 and Nasdaq both regained their respective 50-DMAs. We will be looking for this level to act as support should the market pullback. Te next level of major resistance is the 200-DMA (S&P 500: 2,741 (+2.7%); Nasdaq: 7,451 (+4.1%)). Action remains constructive with just one distribution on the S&P 500 and zero on the Nasdaq.

European Focus

Posted on by Midhun Parameswaran

On Tursday, the Stoxx 600 closed 0.4% higher on a weekly basis. European markets, having tested two-year lows the frst week of January, have shown resilience the past two weeks amid growing concerns of a slowdown in China’s economy and uncertainty over Brexit. Tis week, we upgraded Finland to a Rally Attempt after Monday’s close and downgraded Luxembourg and Austria to an Uptrend Under Pressure after Monday’s and yesterday’s close, respectively. Overall, the week has revived hopes of recovery. Of the 17 indices we cover, twelve are in a Confrmed Uptrend, three are in a Rally Attempt, and two are in an Uptrend Under Pressure.

China A Shares

Posted on by Midhun Parameswaran

Te CSI 300 rose 2.37% for the week on decreased volume. On January 15, we upgraded the market to a Confrmed Uptrend as it recorded a follow-through day, its seventh attempt (six have failed since 2018). Te CSI 300 broke above its 50-DMA on above average volume on Friday. Our conviction will increase if the index can hold above this level, which has been a consistent source of resistance. We reiterate the need to be cautious because we are still in bear market territory and concerns still exist about China’s slowing economy and China-U.S. trade talks. China’s Central Bank has been trying to stimulate the market through reverse repos and by cutting reserve ratios, producing some signs that the market is bottoming. It is still too early to be aggressive, as we have not seen any signals of strong and clear upward momentum. We recommend staying patient and taking a selective approach.

Market View

Posted on by Raj Gupta

The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq made progress since last Friday’s follow-
through day, and are both now testing resistance at their respective 50-DMA (S&P 500: 2,628 (+1.2%);

Nasdaq: 6,988 ( +0.3% )). Though this is an obvious resistance level, we would still like to see the indices close
above this and consolidate for several sessions, which should lead to broader leadership.
Since the follow-through day, Consumer Cyclical, Transportation, Energy, and Technology are leading, each up
more than 7%. Further, Consumer Cyclical and Retail both regained their respective 50-DMA. We are seeing
better technical action, however, just like the major averages, most sectors are also set to hit moving average
resistance over the next several sessions. At the industry group level, Biotech, Computer Tech Services, Electronic
Measuring, Homebuilders, Internet, Medical Equipment, Payment Processors, Rails, Semiconductors, and
Software made notable moves higher.
The number of breakouts is increasing, but most ideas are still rounding out the right side of their respective
bases and have not reached risk-optimal entry points. Since the follow-through day, there were ~20 ideas with
a greater-than-$1B market cap that broke out from consolidation. We will look for more ideas to break out if the
market regains its 50-DMA in the coming days. Ideas we are watching include ADSK, CHGG, CYBR, DXCM,
EPAM, ETSY, FIVE, FIVN, GLOB, HUBS, ISRG, LULU, MEDP, NOW, PANW, RPD, SAVE, SPLK, TSLA, TWLO, ZEN,
and ZS, among others.
We continue to recommend a selective approach, gradually increasing risk in only fundamentally sound ideas
breaking out from consolidation. If the major averages can rise above their respective 50-DMA, there could be
another move higher to the 200-DMA. Should this occur, additional buy opportunities will emerge.
Stocks on our U.S. Focus List: Current Sentiment
Our USFL of 28 ideas gained 4.1% on average this week, outperforming the S&P 500 (+2.5%) and the Nasdaq
( +3.5%. )
Actionable Focus List ideas: Atlassian ( TEAM ), Dorman ( DORM ), Dr. Reddy’s Labs ( RDY ), Fabrinet ( FN ), Keysight
Technologies ( KEYS ), Paypal ( PYPL ), Planet Fitness ( PLNT ), Union Pacific ( UNP ), Veeva Systems ( VEEV ), Vertex
Pharma ( VRTX ), Wingstop ( WING ), Workday ( WDAY ), Wright Medical ( WMGI ), Xilinx ( XLNX ).

US Focus

Posted on by Midhun Parameswaran

The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq have made progress since last Friday’s follow-through day, and are both now testing resistance at their respective 50-DMA (S&P 500: 2,628 (+1.3%); Nasdaq: 6,988 (+0.3%)). Though this is an obvious level of resistance, we would still like to see the indices close above this level and consolidate for several sessions, which should lead to a broadening of leadership.

Market View

Posted on by Raj Gupta

The U.S. market has been upgraded to a Confirmed Uptrend. The S&P 500 staged a day seven follow-through
on Friday, rising 3.4%, on volume 15% greater than Thursday’s. The Nasdaq rose 4.3%, but volume was slightly

less than Thursday’s, despite coming in above the 50-day average. The next level of resistance is the downward-
trending 50-DMA, at 2,637 (+4%) on the S&P 500 and 7,012 (+3.9%) on the Nasdaq.

Growth ideas and industry groups rallied sharply higher, though most continue to repair technical damage from
the last few months. Eight of 11 O’Neil sectors rallied more than 3%, led by Technology and Consumer Cyclical,

both up more than 4%. At the industry group level, Software, Internet, Semiconductors, Payment Processors, Ma-
chinery, and Biotech led. Conversely, defensive sectors lagged, with Consumer Staple and Utility rising less than

2% each.
We believe in order for this follow-through day to develop into a new bull market, growth, not value, needs to

lead. Like the market, growth-oriented industry groups still have multiple resistance levels to regain. Our convic-
tion in this follow-through day will increase as the market rises through resistance, specifically at the 50-DMA.

Further, we need to see leadership broaden and growth ideas begin to break out from consolidation.

Our recommendation is to increase risk gradually, buying only high-quality growth ideas that have either recov-
ered quickly or held up well during this correction. Best-acting ideas on the U.S. Focus List include CIEN, PLNT,

PYPL, XLNX, VEEV, VRTX, and WMGI. Ideas we are watching include AYX, CHGG, DATA, ETSY, FIVN, SPLK,
TEAM, TWLO, WDAY, and ZS, among others. Future leading ideas tend to quickly move back into new highs
within the first three to four weeks of the market bottom.
We will begin adding ideas if the market progresses higher and leadership begins to broaden. As of today, the
majority of stocks are still forming new bases with very few at risk-optimal entry points. We will also monitor for
signs of a failed follow-through day, which include a clustering of distribution days shortly following the move,
coupled with failed breakouts in individual ideas.

US Focus

Posted on by Midhun Parameswaran

The U.S. market has been upgraded to a Confirmed Uptrend. The S&P 500 staged a day seven follow-through day Friday, rising 3.4% on volume 15% above Thursday’s volume. The Nasdaq rose 4.3%, but volume came in slightly under Thursday’s volume, despite coming in above the 50-day average. The next level of resistance is the downward trending 50-DMA at 2,637 (+4%) on the S&P 500 and 7,012 (+3.9%) on the Nasdaq.

US Focus Long

Posted on by Midhun Parameswaran

Te U.S. market is in an Uptrend Under Pressure. Te S&P 500 and the Nasdaq reversed off 50 and 200-DMA resistance this week and are again whipsawing back and forth with no clear direction. Should the indices undercut the October lows (S&P 500: 2,603; Nasdaq: 6,830), the November 28 follow-through day will ofcially fail, resulting in a market downgrade to Downtrend. Conversely, if the S&P 500 and the Nasdaq can rally off the lows, and clear and hold above their respective 50- and 200-DMA, we will move the market status back into a Confrmed Uptrend.

US Focus Long

Posted on by Midhun Parameswaran

The U.S. market is in a Confirmed Uptrend. The Nasdaq staged a day 5 follow-through day (FTD) Wednesday, and has since consolidated gains constructively. The S&P 500 also rallied strongly, and similarly, has consolidated those gains constructively over the last two sessions. Both indices are now facing resistance at their respective 50 and 200-DMA.