In this briefing:
- U.S. Equity Strategy: Positive Outlook Intact; Cyclicals Leading; Opportunities in Tech Sector
- WTI 59.50 Top and Turn Target
- Opportunities in U.S. Technology Sector
1. 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.
2. WTI 59.50 Top and Turn Target
WTI’s bullish counter trend rally cycle from the touted low at 45 is maturing and we are hunting for a fresh high to turn from long to short WTI. A peak in oil would align with a softer economic cycle in the next quarter.
Price triangulation is touted as a tactical bullish breakout pattern that will induce a fresh high near targeted dual projection/retracement. This rise is viewed as a more exhaustive rally that will begin to run out of steam with risk of a fade near 58-59. This is a tradable upside move.
RSI dual tops have show high confidence in market peaks from early 2018 and a final push higher out of the triangle bull flag would get us back to the 70 top resistance to nail down a double top. It is this dual top and MACD resistance that worn of an intermediate peak for oil into strength.
Energy shares are underperform oil and a frequent cycle leader to an oil peak.
3. Opportunities in U.S. Technology Sector
Technology is our favorite Sector within the U.S. equity landscape, and remains leadership – 73% of our Tech Groups are in the top 33% in terms of our Relative Strength Rankings (RSRs). Internally, semis and semi-suppliers continue to outperform and many names have pulled back to offer attractive entry points. In this report we highlight our favorite setups within the U.S. Technology Sector.
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