Brief Industrials: Robotics Earnings: Nabtesco and HDS Results Strong; Still No Reason to Own Fanuc and more

In this briefing:

1. Robotics Earnings: Nabtesco and HDS Results Strong; Still No Reason to Own Fanuc
2. Fanuc Bullish Trade Points off of Base Line Support

1. Robotics Earnings: Nabtesco and HDS Results Strong; Still No Reason to Own Fanuc

Following a long period of weakness, robotics related stocks are displaying stronger performance recently as 3Q results have come in weak, but generally done so with management reassurances that this is the bottom.

We had been negative on the sector for some time before turning more constructive in mid January following Yaskawa’s earnings. We concur with the general messaging that this is the bottom based on our analysis of order levels for the companies and regional trend breakdowns. We do not expect a particularly sharp rebound in orders and sales in the near future and believe there is still some risk of these stocks returning toward the lows over the course of the year. However, we believe that the next significant move should be upwards and longer term investors should be looking for entry timings.

2. 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.