Tag: Confirmed Uptrend

Market View

Posted on by Raj Gupta

The U.S. market is in a Confirmed Uptrend. The Nasdaq staged a day 5 follow-through day Wednesday, and has since consolidated

gains constructively. The S&P 500 also rallied strongly, and similarly has consolidated those gains constructively for the last two ses-
sions. Both indices are now facing resistance at their respective 50 and 200-DMA.

Technical action among growth ideas has been strong. Multiple risk-on ideas are now forming the right side of their respective ba-
ses, however, many are now also facing price and/or moving average resistance. Forty-three Nasdaq 100 stocks are trading below

their 50-DMA, despite rallying a median of 4% over the last five sessions.
To gain conviction in this new follow-through day, we will need to see both the major averages and ideas regain moving average
resistance over the next several sessions, which should lead to a broadening of leadership. Conversely, if we see the major averages
and ideas begin to fade at these levels, the follow-through day is at risk of failing.
Our recommendation is to gradually increase risk, buying only high-quality growth ideas that are breaking out of earlier-stage bases.

As the market progresses through resistance, additional ideas will emerge for new buying opportunities. We anticipate our U.S. Fo-
cus list count to increase when and if the market progresses higher.

Key Points from the latest Strategy View
• There are three main categories that encompass 27 prior instances when the S&P 500 has fallen to 9% or more from highs
and closed below its 200-DMA since 1970.
• Forward gains post-follow-through-day in bulls are substantially better. If the market struggles for the forward
four/eight/thirteen weeks post-follow-through-day, this has typically been a bad sign.
• One follow-through-day failure is fine, in fact, outcomes are even better. But, when two follow-through-day failures have
occurred (undercut of lows before new highs), each time this has led to a bear market.
o Bears have an average of six failed follow-through days before lows.

Stocks on our U.S. Focus List: Current Sentiment
Our USFL of 38 ideas gained 4.7% on average this week, underperforming the S&P 500 (+4.8%) and the Nasdaq (+5.6%).

Actionable Focus List ideas: Aon ( AON ), Astrazeneca ( AZN ), Canada Goose ( GOOS ), Chefs’ Warehouse ( CHEF ), Ciena ( CIEN ), Dr Red-
dys Labs ( RDY ), Edwards Lifesciences ( EW ), Fabrinet ( FN ), Horizon Pharma ( HZNP ), Johnson & Johnson ( JNJ ), Livent ( LTHM ), Mi-
crosoft ( MSFT ), Nextera Energy ( NEE ), Planet Fitness ( PLNT ), PRA Health Sciences ( PRAH ), Procter & Gamble ( PG ), Rogers Communi-
cations ( RCI ), Starbucks ( SBUX ), Unitedhealth ( UNH ), Veeva Systems ( VEEV ), Zoetis ( ZTS ).

European Focus Long

Posted on by Midhun Parameswaran

On Thursday, the Stoxx 600 closed 0.019% below last Friday’s close and remains in a confirmed Uptrend This week, we moved Norway and Italy to an Uptrend Under Pressure after they saw another distribution day and closed below support We also upgraded Germany to a Confirmed Uptrend after the DAX closed up 1.30% and downgraded Luxembourg to a Downtrend after it closed below April lows. of the 17 indices we cover, mine are in a Confirmed Uptrend,five are in a Rally Attempt, two are in an Uptrend Under Pressure, and one is in a Downtrend.

Market View

Posted on by Raj Gupta

The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq staged a Day 7 follow-through day ( FTD ) on
Wednesday, rising more than 2% on above average volume. The FTD, however, is beginning to show signs of
failing following poor technical action on Friday. The Nasdaq closed back below its 200-DMA, while the S&P
500 retraced the FTD move and is now testing support at its 200-DMA. It is not uncommon to see near-term
profit taking shortly after a FTD given the size and quickness of the move off the bottom, however, in order to
stay constructive, we will need to see support come back into both the major averages and leading ideas alike
over the next few sessions. Further downside in both the S&P 500 and Nasdaq, coupled with failed breakouts in
leading ideas, will result in a failed FTD. Our recommendation remains the same. Take a gradual and selective
approach to increasing risk, buying only high-quality ideas that have held up well, as we remain in an overall
trendless and choppy market environment.
Stocks on our U.S. Focus List: Current Sentiment

Our USFL of 49 ideas gained 1.1% on average this week, underperforming the S&P 500 ( +2.1% ) but outper-
forming the Nasdaq ( +0.7% ).

Actionable Focus List ideas: Aon ( AON ), Chefs’ Warehouse ( CHEF ), Ciena ( CIEN ), Edwards Lifesciences ( EW ), Fab-
rinet ( FN ), Healthequity ( HQY ), Horizon Pharma ( HZNP ), Illumina ( ILMN ), Microsoft ( MSFT ), Nomad Foods

( NOMD ), Paypal ( PYPL ), Planet Fitness ( PLNT ), PRA Health Sciences ( PRAH ), Procter & Gamble ( PG ), RBC Bear-
ings ( ROLL ), Twilio ( TWLO ), Ulta Beauty ( ULTA ), Unitedhealth ( UNH ), Vertex ( VRTX ), Visa ( V ), Wright Medical

( WMGI ), Zoetis ( ZTS )
By Sector
Health Care ideas led this week. New additions HZNP and WMGI broke out from early stage bases,
while UNH and ZTS broke into new highs on the follow-through day. PRAH and EW regained their respective
50-DMA, while ILMN and VRTX are now building the right side of new bases. Consumer Staple ideas remain
resilient continuing to make new highs each session. LW, MKC, and PG continue to trend into higher highs,
while NOMD and CHEF both regained their respective 50-DMA following earnings results. Lower beta Financial
names also continue to hold up well. AON is making new highs, while MA, PYPL, FIS, and V are all forming the
right side of new bases. The action within Technology has been mixed. New ideas TWLO and FN broke into new
highs post earnings, while PAYC, GOOGL, NOW, CRM, and SSNC continue to consolidate in choppy fashion.
New Ideas or Deletions
We added Aon ( AON ), Horizon Pharma ( HZNP ), Microsoft ( MSFT ), Twilio ( TWLO ), Paypal
( PYPL), Fabrinet ( FN ), Ulta Beauty ( ULTA ), Wright Medical ( WMGI ), and Ciena ( CIEN ), and removed Match
( MTCH ) from the U.S. Focus List this week.

China A Shares Long

Posted on by Midhun Parameswaran

The CSI 300 dropped 3.7% for the week on decreased volume. The market has moved to an Uptrend Under Pressure, as it logged two distribution days after Friday’s gap-down. The index failed to hold up well and now is 2.7% below its 50-DMA with a five-day losing streak, undercutting the intraday low of the previous follow-through day. The decreased trading volume produced our current wait-and-see sentiment, and we think the market is still under significant downward pressure. The CSI 300’s next support would be at ~3,000. We recommend staying cautious and looking for defensive ideas.

US Focus Long

Posted on by Midhun Parameswaran

The U.S. market is in a Confirmed Uptrend. The S&P 500 and Nasdaq staged a Day 7 follow-through day (FTD) on Wednesday, rising more than 2% on above average volume. The FTD, however, is beginning to show signs of failing following poor technical action on Friday. The Nasdaq closed back below its 200-DMA, while the S&P 500 retraced the FTD move and is now testing support at its 200-DMA. It is not uncommon to see near-term profit taking shortly after a FTD given the size and quickness of the move off the bottom, however, in order to stay constructive, we will need to see support come back into both the major averages and leading ideas alike over the next few sessions. Further downside in both the S&P 500 and Nasdaq, coupled with failed breakouts in leading ideas, will result in a failed FTD. Our recommendation remains the same. Take a gradual and selective approach to increasing risk, buying only high-quality ideas that have held up well, as we remain in an overall trendless and choppy market environment.

European Focus Long

Posted on by Midhun Parameswaran

On Thursday, the Stoxx 600 closed 0.82% above last Friday’s close. This week, we changed France, the U.K., Denmark, Italy, Spain, Belgium, and the Netherlands to a Confirmed Uptrend after a follow-through day in these markets. We also moved the Stoxx 600 to a Confirmed Uptrend from a Rally Attempt after it staged a follow-through day yesterday. Of the 17 indices we cover, ten are in a Confirmed Uptrend and seven are in a Rally Attempt.

China A Shares Long

Posted on by Midhun Parameswaran

The CSI 300 rose 3.7% for the week on increased volume. The index closed up 3.6% on Friday on increased volume, recording a follow-through day and moving to a Confirmed Uptrend. China’s President Xi gave some positive signals of support for the development of private enterprises on Thursday night, boosting market sentiment. The good conversation between President Xi and U.S. President Trump relieved worries about the trade war. Although the CSI 300 breached its 50-DMA and recorded a follow-through day, we recommend staying patient as the market is still volatile due to the uncertainties such as the trade war, U.S. midterm elections, and the equity pledge issue. We will be looking for the index to stay above its 50-DMA and break through the next level of resistance at the 100- DMA.

European Focus Long

Posted on by Midhun Parameswaran

The Stoxx 600 closed 4.45% lower on a weekly basis on Thursday. Concerns over Italy’s deficit and China’s economic slowdown pushed markets downward for most of the week. We downgraded Portugal and Ireland to a Downtrend last Friday; Italy, Netherlands, the U.K., and the Stoxx 600 Monday; Germany and Belgium Tuesday; France and Sweden Wednesday; Austria, Spain, and Switzerland yesterday. Norway was downgraded to an Uptrend Under Pressure yesterday. Of the 17 indices we cover, 15 are in a Downtrend and only Luxembourg and Norway remain in an Uptrend Under Pressure. This morning, markets are showing signs of recovery. The Stoxx 600 gained 0.7%, while Germany’s DAX 30, the U.K.’s FTSE 100, and France’s CAC 40 rose 1.04%, 0.35%, and 0.94%, respectively, in early trading.

European Focus Long

Posted on by Raghavendra K

The Stoxx 600 closed 0.91% lower on a weekly basis on Thursday. We downgraded Italy to Under Pressure on Tuesday, and Denmark and Finland to a Downtrend today. Of the 17 indices we cover, two are in a Downtrend, two are Under Pressure, three are in a Confirmed Uptrend, and ten are in a Rally Attempt. As of this morning, the index is in negative territory and continues to trade below its 50- and 200-DMA.