In this briefing:
- Semiconductors Are Breaking Out — Add Exposure/Overweight
- MSCI ACWI Ex-U.S. Breaking Topside Its Downtrend: Europe & The UK Look Attractive
- U.S. Equity Strategy: Positive Outlook Intact; Tech Leading
- Resona Holding Faces Further Pressure After Corrective Bounce Terminates
- U.S. Equity Strategy: Positive Outlook Intact; Cyclicals Leading; Opportunities in Tech Sector
1. Semiconductors Are Breaking Out — Add Exposure/Overweight
Relative strength for the PHLX Semiconductor index began a bottoming process in November of 2018. In mid-December. Since then we have expanded our recommendations substantially and upgraded Technology to overweight in late-January. Despite four months of outperformance, we believe the move for semis is just beginning. In today’s report we highlight our favorite technical setups, including: AMAT, MRVL, AMBA, STM, ON, MU, NVDA, SWKS, MCHP, TXN, AVGO, LRCX, NXPI, ASML, TER, MKSI, ICHR, ACLS, and TSEM.
2. MSCI ACWI Ex-U.S. Breaking Topside Its Downtrend: Europe & The UK Look Attractive
The MSCI ACWI ex-U.S. is breaking topside its nearly 14-month downtrend and above key resistance. The move is being fueled by improvements throughout most of Europe and the UK, along with strength in China over the past 2-3 months. We believe these positive developments are supportive of higher equity prices moving forward. We provide a technical appraisal of all major markets.
The STOXX 600 Banks and Insurance Sectors are exhibiting bullish price inflections and RS indicates these areas may be emerging as leadership. In today’s report we highlight actionable stocks throughout the int’l Financial Sector.
3. U.S. Equity Strategy: Positive Outlook Intact; Tech Leading
The S&P 500 is working through 2,817 resistance and our technical work continues to support an overall positive outlook. As markets improve in Europe and in EM countries, U.S. markets in turn should get a tailwind of improved global equity market conditions. In today’s report we highlight attractive Groups and stocks within Technology: Large- and Mid-Cap Semiconductors Large/Mid-Cap Semi Equip. (TE-04), Software, Enterprise Applications (TE-42), and Software, Design Solutions (TE-46). List of charts included: Intel Corp (INTC US) $TSM, Texas Instruments (TXN US), Analog Devices (ADI US) Xilinx Inc (XLNX US) Advanced Micro Devices (AMD US) Microchip Technology (MCHP US) Skyworks Solutions (SWKS US) Marvell Technology Group Ltd (MRVL US) On Semiconductor (ON US) Monolithic Power Systems, Inc (MPWR US) ASML Holding NV (ASML NA) , Applied Materials (AMAT US)Lam Research (LRCX US) Teradyne Inc (TER US)Mks Instruments (MKSI US)Microsoft Corp (MSFT US)Oracle Corp (ORCL US)Sap Se Sponsored Adr (SAP US)Now Inc (DNOW US)Workday Inc Class A (WDAY US) .
4. Resona Holding Faces Further Pressure After Corrective Bounce Terminates
Resona Holdings (8308 JP) key tactical resistance lies at 503.86, a level that if broken could spur a counter trend tactical bounce back to outlined trendline and physical resistance.
The daily cycle does show some underlying tactical support given the RSI has not confirmed recent lows. Any rally would be a counter trend move within the larger degree decline cycle. Buy volumes are not supportive in this rise (deteriorating) underscore the macro bear posture.
If the weekly cycle head and shoulders is true to course, Resona Holdings would face significant downside pressure looking ahead 2 quarters.
5. U.S. Equity Strategy: Positive Outlook Intact; Cyclicals Leading; Opportunities in Tech Sector
The market’s bounce off of the December, 2018 low was a swift “V” reversal. While we often see a retest of such events, our outlook since that time has repeatedly suggested that a retest may not occur. We continue to believe the market remains healthy with overall and leadership remaining centered in the cyclical Sectors, mainly Technology. In this publication we provide an overview of our U.S. equity strategy, and examine attractive opportunities in each of our 12 Sectors, beginning with Technology – our favorite.
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