In this briefing:
- Lotte Chemical Bull Signals
- SEC and SK Hynix Breakouts
- Global Ex-U.S. Equity Strategy: MSCI EM in Early Stages of Bottoming
- Japan Post Holdings Basing Cycle with Clear Sell and Buy Levels
- U.S. Equity Strategy: Has “the Pullback” Begun?
1. Lotte Chemical Bull Signals
Lotte Chemical (011170 KS) exhibits a bull bias to break higher out of the current flat pattern.
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
2. SEC and SK Hynix Breakouts
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.
Refer to our insight SK Hynix Met Our Short to Long Reverse Target from October 2018. We were a bit early on picking the low.
3. Global Ex-U.S. Equity Strategy: MSCI EM in Early Stages of Bottoming
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.
4. Japan Post Holdings Basing Cycle with Clear Sell and Buy Levels
Japan Post Holdings (6178 JP) rise is moving into an exhaustive resistance zone and due for a hard give back cycle.
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.
5. U.S. Equity Strategy: Has “the Pullback” Begun?
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.
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.
