In this briefing:
- Global Bottoming Process Continues; Remain Overweight China
- S&P 500 and S&P 600 Testing Resistance
- LG Electronics Resistance Rejection
- Gold Topside Pivot Barrier Short Set Up
1. Global Bottoming Process Continues; Remain Overweight China
The MSCI ACWI and ACWI ex-US have managed to break above their respective 200-day moving averages, and are now bumping up against overhead resistance. Supportive of a bottoming global market, cyclical Sectors are emerging as leadership. We examine the technical state of major developed and EM markets and highlight in today’s report and highlight attractive and actionable stocks within the Materials, Manufacturing, and Technology sectors.
2. S&P 500 and S&P 600 Testing Resistance
We believe the market is at short-term overbought extremes and is contending with resistance. Resistance levels we are monitoring include 2,810-2,817 on the S&P 500 and the 200-day moving average on the S&P 600 Small Cap index… see charts below. We would welcome some consolidation or a mild pullback which would be a healthy correction of the current extended market conditions.
In today’s report we highlight attractive Groups and stocks within Manufacturing and Technology: Construction Equipment, Industrial Rental Equipment, Data Storage Solutions & Devices, Small-Cap, and Software, Financial Mgmt. Solutions.
3. LG Electronics Resistance Rejection
Lg Electronics (066570 KS) is seeing a rejection from 74.5k resistance that acts as an important intermediate if not macro inflection level. Weakness below 74k implies a test on lower pattern support.
Daily MACD rising wedge accompanied by a flat or triangle corrective range, typically is a bear set-up for a break lower. Making the 74k level pivotal and a short level with a stop above 75k. Very often indicators gyrating higher to relieve oversold conditions with a failure for price to make headway labels the sideways range as corrective in a stair case sequence.
Shorts need to focus on the 75k pivot as the stop and risk level. Longer term investors will need to remeasure lower entry points barring a break above pivot resistance which would initiate upside bull targets.
4. Gold Topside Pivot Barrier Short Set Up
Our bullish gold view from 1,200 just kissed the formidable topside resistance near 1,350 with increasing signs of the current up leg exhausting.
The standout chart feature stems from the most recent highs have not been confirmed by the daily RSI and MACD for a case of bear divergence amid a rising wedge. This divergence along with the physical barrier at 1,350-60 sets up a compelling short trade.
Well defined MACD triangulation denotes clean breakout points. RSI will give us good lead signals on a break below trend/pattern support.
A peak in gold may tie in with a firming USD bias and exhaustive moves in base metals.
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.
