Technical Analysis

In this briefing:

1. US 10yr Triangle Geared for a Power Breakout
2. Global Equity Strategy: Constructive Outlook Intact, Bottoming Process Continues
3. Petrochina Breakout and Laggard Play
4. Baking in a Trade Deal and China Fade the Fact Levels

1. US 10yr Triangle Geared for a Power Breakout

Our macro stance touted a bearish yield scenario from 3.26% and again once below 3% with a target of 2.62% and has since been revised lower. Recent yield fade call from 2.80% targets much lower yields and will have a ripple effect globally.

A fresh plunge in yield would favor rate sensitive assets and warn of a harder slow down cycle. The bond market is pounding the table that global growth will slow more dramatically than what is currently priced into market and equities.

The offset is clearly a more dovish CB tone, China stimulus and closing in on sentiment capitulation.

Triangulation breakout will offer a powerful trade. Yields are set for a big move.

2. Global Equity Strategy: Constructive Outlook Intact, Bottoming Process Continues

We remain constructive overall and continue to believe that global equities (MSCI ACWI) are going through a bottoming process. Opportunities exist but Sector leadership is mixed.  In our February International Strategy document, we explore various themes which lead to our overall constructive outlook, as well as a technical appraisal of each Sector and the investable opportunities therein.

3. Petrochina Breakout and Laggard Play

Petrochina Co Ltd H (857 HK) has remains suppressed but with oil perking up there is a laggard upside play taking shape as we begin to see distribution in HK upside leaders. On weakness we like positioning on the long side and can be used as a pair with an index short or one of the steel counters.

Given stock leaders are showing deteriorating upside momentum, we expect laggards to attract more attention.

RSI and MACD breakout patterns outlined as well as the price breakout at 5.10.

A bigger descending wedge also shows promise as a secondary breakout trigger.

MACD pattern resistance will help define the trending capability post breakout.

4. Baking in a Trade Deal and China Fade the Fact Levels

Shanghai composite breakout above 2,650 is a bullish catalyst for HK and pushing into secondary resistance. Typically, a re test of the breakout zone is often seen.

Shanghai A50 futures face a formidable barrier that has capped rally attempts for the last 7 months.

H share and the HSI are both exhibiting signs of distribution into strength. Choppy rising patterns warn that the rise is getting extended with breadth starting to struggle.

Tencent is exhibiting upside momentum deterioration amid divergence.

We question just how much trade deal euphoria is now priced into the HK market (and for that matter global cycle) and must take into account odds of a deadline extension deflating the current rally as the reality sets in that major trade issues remain unsettled.

Any trade deal would give us an exhaustive spike higher while an extension would knock us back to re cycle supports.

In this briefing:

1. Global Equity Strategy: Constructive Outlook Intact, Bottoming Process Continues
2. Petrochina Breakout and Laggard Play
3. Baking in a Trade Deal and China Fade the Fact Levels

1. Global Equity Strategy: Constructive Outlook Intact, Bottoming Process Continues

We remain constructive overall and continue to believe that global equities (MSCI ACWI) are going through a bottoming process. Opportunities exist but Sector leadership is mixed.  In our February International Strategy document, we explore various themes which lead to our overall constructive outlook, as well as a technical appraisal of each Sector and the investable opportunities therein.

2. Petrochina Breakout and Laggard Play

Petrochina Co Ltd H (857 HK) has remains suppressed but with oil perking up there is a laggard upside play taking shape as we begin to see distribution in HK upside leaders. On weakness we like positioning on the long side and can be used as a pair with an index short or one of the steel counters.

Given stock leaders are showing deteriorating upside momentum, we expect laggards to attract more attention.

RSI and MACD breakout patterns outlined as well as the price breakout at 5.10.

A bigger descending wedge also shows promise as a secondary breakout trigger.

MACD pattern resistance will help define the trending capability post breakout.

3. Baking in a Trade Deal and China Fade the Fact Levels

Shanghai composite breakout above 2,650 is a bullish catalyst for HK and pushing into secondary resistance. Typically, a re test of the breakout zone is often seen.

Shanghai A50 futures face a formidable barrier that has capped rally attempts for the last 7 months.

H share and the HSI are both exhibiting signs of distribution into strength. Choppy rising patterns warn that the rise is getting extended with breadth starting to struggle.

Tencent is exhibiting upside momentum deterioration amid divergence.

We question just how much trade deal euphoria is now priced into the HK market (and for that matter global cycle) and must take into account odds of a deadline extension deflating the current rally as the reality sets in that major trade issues remain unsettled.

Any trade deal would give us an exhaustive spike higher while an extension would knock us back to re cycle supports.

In this briefing:

1. Petrochina Breakout and Laggard Play
2. Baking in a Trade Deal and China Fade the Fact Levels

1. Petrochina Breakout and Laggard Play

Petrochina Co Ltd H (857 HK) has remains suppressed but with oil perking up there is a laggard upside play taking shape as we begin to see distribution in HK upside leaders. On weakness we like positioning on the long side and can be used as a pair with an index short or one of the steel counters.

Given stock leaders are showing deteriorating upside momentum, we expect laggards to attract more attention.

RSI and MACD breakout patterns outlined as well as the price breakout at 5.10.

A bigger descending wedge also shows promise as a secondary breakout trigger.

MACD pattern resistance will help define the trending capability post breakout.

2. Baking in a Trade Deal and China Fade the Fact Levels

Shanghai composite breakout above 2,650 is a bullish catalyst for HK and pushing into secondary resistance. Typically, a re test of the breakout zone is often seen.

Shanghai A50 futures face a formidable barrier that has capped rally attempts for the last 7 months.

H share and the HSI are both exhibiting signs of distribution into strength. Choppy rising patterns warn that the rise is getting extended with breadth starting to struggle.

Tencent is exhibiting upside momentum deterioration amid divergence.

We question just how much trade deal euphoria is now priced into the HK market (and for that matter global cycle) and must take into account odds of a deadline extension deflating the current rally as the reality sets in that major trade issues remain unsettled.

Any trade deal would give us an exhaustive spike higher while an extension would knock us back to re cycle supports.

In this briefing:

1. Baking in a Trade Deal and China Fade the Fact Levels

1. Baking in a Trade Deal and China Fade the Fact Levels

Shanghai composite breakout above 2,650 is a bullish catalyst for HK and pushing into secondary resistance. Typically, a re test of the breakout zone is often seen.

Shanghai A50 futures face a formidable barrier that has capped rally attempts for the last 7 months.

H share and the HSI are both exhibiting signs of distribution into strength. Choppy rising patterns warn that the rise is getting extended with breadth starting to struggle.

Tencent is exhibiting upside momentum deterioration amid divergence.

We question just how much trade deal euphoria is now priced into the HK market (and for that matter global cycle) and must take into account odds of a deadline extension deflating the current rally as the reality sets in that major trade issues remain unsettled.

Any trade deal would give us an exhaustive spike higher while an extension would knock us back to re cycle supports.

In this briefing:

1. Global Solar Energy Stocks Are Bottoming

1. Global Solar Energy Stocks Are Bottoming

In today’s report we highlight the following actionable solar energy names: First Solar (FSLR), SolarEdge Technologies (SEDG), GCL-Poly Energy (3800-HK), Meyer Burger Technology AG (MBTN-CH), Enphase Energy (ENPH), JinkoSolar Sponsored ADR (JKS), TerraForm Power (TERP), Beijing Enterprises Clean Energy Group (1250-HK), GCL New Energy (451-HK), and Viatron Technologies (141000-KR).

In this briefing:

1. Global Solar Energy Stocks Are Bottoming
2. U.S. Equity Strategy: Upgrading Manufacturing Sector

1. Global Solar Energy Stocks Are Bottoming

In today’s report we highlight the following actionable solar energy names: First Solar (FSLR), SolarEdge Technologies (SEDG), GCL-Poly Energy (3800-HK), Meyer Burger Technology AG (MBTN-CH), Enphase Energy (ENPH), JinkoSolar Sponsored ADR (JKS), TerraForm Power (TERP), Beijing Enterprises Clean Energy Group (1250-HK), GCL New Energy (451-HK), and Viatron Technologies (141000-KR).

2. U.S. Equity Strategy: Upgrading Manufacturing Sector

The S&P 500 continues to hover below critical resistance at its 200-day moving average while market participants remain in a wait-and-see mode for new developments on U.S.-China trade and details on the latest border security proposal. At the same time, breadth improvements have extended to our Manufacturing Sector – a welcomed sight given its cyclical nature.  We are Upgrading Manufacturing to market weight from underweight. Our cap-weighted Manufacturing Sector has steadily improved in our RSR ranks due in large part to strength in Aerospace & Defense Groups. In today’s report we highlight attractive Groups within Manufacturing and Technology..

In this briefing:

1. U.S. Equity Strategy: Upgrading Manufacturing Sector

1. U.S. Equity Strategy: Upgrading Manufacturing Sector

The S&P 500 continues to hover below critical resistance at its 200-day moving average while market participants remain in a wait-and-see mode for new developments on U.S.-China trade and details on the latest border security proposal. At the same time, breadth improvements have extended to our Manufacturing Sector – a welcomed sight given its cyclical nature.  We are Upgrading Manufacturing to market weight from underweight. Our cap-weighted Manufacturing Sector has steadily improved in our RSR ranks due in large part to strength in Aerospace & Defense Groups. In today’s report we highlight attractive Groups within Manufacturing and Technology..

In this briefing:

1. Fanuc Bullish Trade Points off of Base Line Support

1. Fanuc Bullish Trade Points off of Base Line Support

Fanuc Corp (6954 JP) shows increasing signs of a basing process and opportunities on weakness.

Macro retracements display clear synergy with the low at 15,570, suggesting this is a key low.

Use weakness back toward base line support to buy for a medium term rise to press on outlined resistance targets.

Risk lies with the signs of rally fatigue in the near term tactical cycle as the daily RSI fails to confirm recent highs that are knocking on pivotal resistance at 19,000 that acts as the immediate make or break level.

Pivot levels, action points and targets are outlined.

In this briefing:

1. Fanuc Bullish Trade Points off of Base Line Support
2. Suruga Bank Bottom Projection

1. Fanuc Bullish Trade Points off of Base Line Support

Fanuc Corp (6954 JP) shows increasing signs of a basing process and opportunities on weakness.

Macro retracements display clear synergy with the low at 15,570, suggesting this is a key low.

Use weakness back toward base line support to buy for a medium term rise to press on outlined resistance targets.

Risk lies with the signs of rally fatigue in the near term tactical cycle as the daily RSI fails to confirm recent highs that are knocking on pivotal resistance at 19,000 that acts as the immediate make or break level.

Pivot levels, action points and targets are outlined.

2. Suruga Bank Bottom Projection

Daily cycle indicators display a topside cap for Suruga Bank Ltd (8358 JP) and turn barrier to press for new lows with ideal downside projection the focus to align with RSI and MACD targeted supports.

The rise from December 2018 is labeled as corrective and biased for a new low. Price cap will act as resistance for those who favor the short side here.

Previous supports at 603 and 590 have been broken and are now upside hurdles to contend with and use as inflection points.

Oversold cycle readings are taking shape in the form of daily bull divergence from price as the weekly cycle attempts to find a foot hold in coming months.

In this briefing:

1. Suruga Bank Bottom Projection

1. Suruga Bank Bottom Projection

Daily cycle indicators display a topside cap for Suruga Bank Ltd (8358 JP) and turn barrier to press for new lows with ideal downside projection the focus to align with RSI and MACD targeted supports.

The rise from December 2018 is labeled as corrective and biased for a new low. Price cap will act as resistance for those who favor the short side here.

Previous supports at 603 and 590 have been broken and are now upside hurdles to contend with and use as inflection points.

Oversold cycle readings are taking shape in the form of daily bull divergence from price as the weekly cycle attempts to find a foot hold in coming months.