The S&P 500 remains just short of formidable resistance at its 200-day MA. Yet, there are signs of continued breadth improvement. Technology in particular continues to top our Sector RSR rankings, fueled by strengthening price and RS action for semiconductors, semi-suppliers, and numerous Software groups. Last week we upgraded our weighting for Technology and its strength continues to broaden out. In this week’s report we highlight a number of actionable Technology stocks across our various Groups.
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Broad global indexes (MSCI ACWI, ACWI ex-U.S., and EAFE) are showing signs of bottoming due to positive short-term price inflections topside their respective downtrends. Additionally, cyclical Sectors Technology, Consumer Discretionary, and Manufacturing exhibit early signs of price and RS bottoms throughout Europe, Japan, and EM. In today’s report we highlight attractive and actionable opportunities within these cyclical Sectors, and provide a technical appraisal of major global indexes.
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The S&P 500 has paused just below logical resistance at the downtrend, and we believe the equity market is in wait-and-see mode for incremental information on a variety of issues including trade talks, Fed action and earnings. Meanwhile, We are upgrading equal-weighted Technology to overweight.Our equal-weightedTech Sector has surged to the top of our RSR ranks due to broad-based strength in semiconductors last week. Solar stocks are another Group that is emerging as leadership.In today’s report we highlight attractive small-cap Technology stocks, as well as selection of key stocks (MSFT, AMZN, GOOGL, V, NFLX, and ADBE) and subsectors (semis, biotech, and homebuilders) which are all up against logical price resistance.
Brent’s rise from 52 support has so far fallen in line with a corrective rise that is starting to run out of steam. In this webcast we outline key pivot levels to buy and where we see a rally exhausting ahead of a fresh re test on lower support levels.
Oil remains a good barometer of global growth, which is set to slow into the summer and more so in 2020. Oil will also respond to a improved sentiment on China/US trade. Venezuela’s supply concerns failed to induce any real reaction as major players appear to be building short positions into strength. Tactically, oil is reaching for a minor new high and the failure to rally on potential supply constraints does play into a pending cycle peak.
We run through our tactical sequence as well as our macro view into 2020 (more bearish).
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Brent’s rise from 52 support has so far fallen in line with a corrective rise that is starting to run out of steam. In this webcast we outline key pivot levels to buy and where we see a rally exhausting ahead of a fresh re test on lower support levels.
Oil remains a good barometer of global growth, which is set to slow into the summer and more so in 2020. Oil will also respond to a improved sentiment on China/US trade. Venezuela’s supply concerns failed to induce any real reaction as major players appear to be building short positions into strength. Tactically, oil is reaching for a minor new high and the failure to rally on potential supply constraints does play into a pending cycle peak.
We run through our tactical sequence as well as our macro view into 2020 (more bearish).
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TSMC has struggled after breaking trend support last summer and from pressure stemming from the double top.
Underlying support is starting to take shape as the weekly cycle wrestles with a cycle trough amid a constructive descending wedge forming in the daily cycle. There are still a number of overhead hurdles to clear for a sustainable up cycle to resume. Current support is critical to hold as we hover just above this inflection point. A break below outlined support would take TSMC into a lower trading range.
Galaxy Entertainment Group (27 HK) exhibits some valid chart support in the form of a key low at 61.8% retracement and physical price support at the 40 level. This low should stay in place for 2019.
Price and RSI wedge formations are building steam for an upside breakout. MACD bull divergence and the triangle breakout back in November will provide forward upside energy. MACD triangles are some of the most powerful chart set ups.
Currently at an attractive risk to reward support zone for an entry with a reasonably tight stop.
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Bull wedge outlined in the daily MACD calls for a near term rally with odds favoring a rally stall near the formidable resistance from peak/lows in 2016-2017 that will act as an intermediate cap.
Volumes do show accumulation from late last year and we will be looking for buy volumes to improve on a break above the 298k pivot level.
Long risk to reward is compelling here for an intermediate rise with tactical underpinnings.
Macro resistance hurdle is well defined with the major trend break
Samsung Electronics (005930 KS) and SK Hynix Inc (000660 KS) have cleared key resistance levels that open the way for intermediate gains with a ST peak due in late January that will offer better entry points on weakness in February.
The rally from late December is moving into extended territory. Buy volumes have improved as has upside momentum.
This breakout has also induced a tactical buy signal in the Kospi 200 index above the pivotal 278 resistance but breadth is still mixed to weak. We need to see better upside action in the broader market for a sustainable rise in Korea.
Our overall global outlook remains cautious and continued downward pressure on global equities remains our expectation. One bright spot is EM (more on this below), which continues to give us hope that global equities can bottom out. We provide a technical appraisal of major markets and highlight actionable setups within the global Utilities and Staples Sectors.
Tactical buy supports are compelling for a bigger upside drive given the successful macro backswing support test and ascent that very often opens the way for the macro cycle to make headway, once a corrective cycle terminates. It is this corrective cycle that shows promise for an entry point.
Japan Post Holdings (JPH) does have a short history of volatile swings and will be the challenge within an ongoing basing cycle. We have well defined levels to trade this range tactically while aligning some strong risk pivot supports to reign in risk.
Macro pivot support will define the long term trend for JPH.
The weight of the evidence suggests that the pullback has begun. This belief is supported by overbought conditions combined with the S&P 500, MSCI ACWI, and nearly all Sectors hitting logical resistance. Assuming the pullback continues, the next question is how deep or damaging will it be? In this report we highlight various market/technical indicators we are monitoring, as well as pointing out attractive set ups within Consumer Discretionary and Health Care Sectors.
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68.30 long entry was recommended to close at the 77-80 area with 80 acting as the macro bull/bear line in our insight Ping An Long Pair Working – Risk of New Lows . The rejection call at 80 was expected to usher in selling pressure to press on new lows.
Ping An’s safe haven status has evaporated and does exhibit future vulnerabilities in HK’s underlying cycle (late Q1 into Q2). In our last insight we outlined that Ping An shows increasing risk that its safer have position will come under pressure and so it has.
New lows are still targeted. The current bounce is knocking on formidable resistance that should be used to sell stale long positions or even take a short bet.
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68.30 long entry was recommended to close at the 77-80 area with 80 acting as the macro bull/bear line in our insight Ping An Long Pair Working – Risk of New Lows . The rejection call at 80 was expected to usher in selling pressure to press on new lows.
Ping An’s safe haven status has evaporated and does exhibit future vulnerabilities in HK’s underlying cycle (late Q1 into Q2). In our last insight we outlined that Ping An shows increasing risk that its safer have position will come under pressure and so it has.
New lows are still targeted. The current bounce is knocking on formidable resistance that should be used to sell stale long positions or even take a short bet.
Broad global indexes are bumping up against logical downtrend resistance. As a result, our outlook remains cautious and our baseline expectation for continued downward pressure on global equities remains intact. At the same time, we are seeing signs that the worst of the declines may be behind us as global cyclical Sectors show RS improvements while defensive Sectors display early signs of RS deterioration. In this report we review important technical levels for developed and EM indexes, and highlight a number of attractive opportunities across markets and sectors.
In this report we detail our U.S. investment thesis and provide a detailed technical appraisal of the broad market, as well as highlighting attractive investment opportunities within each of our 12 Sectors.
Holding floor support is vital for this trade to work. In absolute terms both APG and APC display similarly weak chart structures with risk of a final bout of weakness. APG displays a more depressed chart reading however.
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Broad global indexes are bumping up against logical downtrend resistance. As a result, our outlook remains cautious and our baseline expectation for continued downward pressure on global equities remains intact. At the same time, we are seeing signs that the worst of the declines may be behind us as global cyclical Sectors show RS improvements while defensive Sectors display early signs of RS deterioration. In this report we review important technical levels for developed and EM indexes, and highlight a number of attractive opportunities across markets and sectors.
In this report we detail our U.S. investment thesis and provide a detailed technical appraisal of the broad market, as well as highlighting attractive investment opportunities within each of our 12 Sectors.
Holding floor support is vital for this trade to work. In absolute terms both APG and APC display similarly weak chart structures with risk of a final bout of weakness. APG displays a more depressed chart reading however.
In absolute terms we see Toyota Motor moving into a top while Tsuruha shows risk of a final low to work into this pair position but has a very compelling bullish chart set up as Toyota fade from resistance.
Descending price wedge has and will dominate tactical swing cycles on the way down with fresh evidence of a bearish flat maturing and a tactical negative to test the lower end of the descending range. DBS is knocking on fresh sell resistance currently.
Relative stance also shows continued deterioration versus the STI barring an upside break of pattern resistance. Expected bottoming cycle due in May 2019 followed by a perform into year-end.
Indicator bear divergences are being unwound but we are starting to see basing bull divergence form in the daily MACD cycle.
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Tactical buy supports are compelling for a bigger upside drive given the successful macro backswing support test and ascent that very often opens the way for the macro cycle to make headway, once a corrective cycle terminates. It is this corrective cycle that shows promise for an entry point.
Japan Post Holdings (JPH) does have a short history of volatile swings and will be the challenge within an ongoing basing cycle. We have well defined levels to trade this range tactically while aligning some strong risk pivot supports to reign in risk.
Macro pivot support will define the long term trend for JPH.
The weight of the evidence suggests that the pullback has begun. This belief is supported by overbought conditions combined with the S&P 500, MSCI ACWI, and nearly all Sectors hitting logical resistance. Assuming the pullback continues, the next question is how deep or damaging will it be? In this report we highlight various market/technical indicators we are monitoring, as well as pointing out attractive set ups within Consumer Discretionary and Health Care Sectors.
TSMC has struggled after breaking trend support last summer and from pressure stemming from the double top.
Underlying support is starting to take shape as the weekly cycle wrestles with a cycle trough amid a constructive descending wedge forming in the daily cycle. There are still a number of overhead hurdles to clear for a sustainable up cycle to resume. Current support is critical to hold as we hover just above this inflection point. A break below outlined support would take TSMC into a lower trading range.
Galaxy Entertainment Group (27 HK) exhibits some valid chart support in the form of a key low at 61.8% retracement and physical price support at the 40 level. This low should stay in place for 2019.
Price and RSI wedge formations are building steam for an upside breakout. MACD bull divergence and the triangle breakout back in November will provide forward upside energy. MACD triangles are some of the most powerful chart set ups.
Currently at an attractive risk to reward support zone for an entry with a reasonably tight stop.
68.30 long entry was recommended to close at the 77-80 area with 80 acting as the macro bull/bear line in our insight Ping An Long Pair Working – Risk of New Lows . The rejection call at 80 was expected to usher in selling pressure to press on new lows.
Ping An’s safe haven status has evaporated and does exhibit future vulnerabilities in HK’s underlying cycle (late Q1 into Q2). In our last insight we outlined that Ping An shows increasing risk that its safer have position will come under pressure and so it has.
New lows are still targeted. The current bounce is knocking on formidable resistance that should be used to sell stale long positions or even take a short bet.
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
