Weekly Technical Review

Transcription

1 Ucap Hong Kong Asset Management Limited Weekly Technical Review 8 th December 2015

2 Highlights (1) Equity Markets MSCIWorldIndex Weekly We are currently retesting the resistance& a weekly break above this level would confirm a resumption of the global bull trend of equities. Be cautious on the downside given that a break below on a daily close would most probably lead the market to revisit to increasing uncertainty. S&P500 Weekly&Daily The main US Equity index is currently the most robust amongst all markets. Afterbreakingthroughthe50weekmovingaverage,weareseeinga5thweek ofconsolidationwithdownsidesupportintheareaof2 030to2 045onadaily close. On the upside, a daily break above would lead the market to test yearly highs. DJEurostoxx50-Daily European equities that have been our favored market since a few months showed extreme weakness last Thursday linked to positioning on the EUR/USD currency pair. We recommend to play a rebound in the short term as long to holds on the downside, otherwise we believe investors should tactically reduce exposure.

3 Highlights (2) Global Markets DollarIndex Daily We had been selling US dollar exposure during the upside stretch we saw over the past 2 weeks and start buying after the ECB comments of Last Thursday. We are buyers as long as holds on a daily close (200 Day MA) since the global uptrend remains intact. EUR/USD- Monthly TheEURUSDistheleaderintheUSDollarmixandissettingthetrend.Themedium to long term trend has only started resuming and a retest of the 2015 lows is imminent. The underlying should reach 0.98 over the coming 6 months in an attempt to replicate the last 6 month range amplitude. Gold-Monthly We remain structurally bearish on Gold and have a short term target at USD We shorted the recent bounce and believe that many investors are uninterested in the precious metal even if we are in times of increased volatility for risky assets. OnlybuyaclearbreakofUSD1 185onaWeeklyclose. CrudeOil-Weekly Crude Oil remains in a downtrend and even though we had a serious rebound last week, we believe that until is not broken on a weekly closing level investors should take advantage of spikes to exit.

4 Highlights (3) Sectors and relative value EuroStoxxvs.S&P500-Daily We see more upside on the EuroStoxx than the S&P 500 given our view on the Dollar and the technical pattern of each index. The relative performance remains close to multi years lows and there is ample room for a rebound. This view can be implemented as a long/short trade using mini-futures. European Banks(iShares EStoxx Banks) Daily The sector has lagged the broader market after the recent earnings season. Momentum is looking negative in the very short term and we recommend to be cautious if ever EUR breaksonadailyclose. USBanks(SPDRS&PBankETF) Daily Higher rates and good economic growth in the US offer a good environment for US banks. The sector should continue to outperform in A break above $37.30 could free up the way to $45. USPharma(SPDRS&PHealthCareETF) Weekly After years of a strong and regular performance, the US Health Care sector entered a corrective movement in October. The noise about price controls was a excuse for investors to take some profit and reduce their overweight positions. The sector fundamentals remain strong and this correction offers an opportunity to reenter the trade. US Consumer Discretionary(SPDR ETF) Daily ThesectorhasfailedtomakeanewhighafterThanksgiving.Ashorttermpullbackwillofferan opportunity to reenter the trade. Technicals show an upside target at USD in the short term(3 months).

5 Global Equities - YTD Performance Review Equity Indices Value Local YTD % Chg USD YTD % Chg EUR YTD % Chg North America Dow Jones 17' % -0.73% 10.73% S&P 500 2' % 0.64% 12.25% Nasdaq 100 4' % 10.57% 23.33% Europe EuroStoxx 50 3' % -4.26% 6.79% FTSE 6' % -2.07% 2.32% SMI 8' % -2.33% 8.80% DAX 10' % -0.47% 11.02% CAC 4' % -0.20% 11.32% MIB 22' % 3.92% 15.91% IBEX 10' % % -2.31% Asia & Emergings Nikkei 19' % 9.57% 22.10% HSCEI 9' % % -8.73% Kospi % -8.34% 2.74% TAIEX 8' % % -2.60% IBOV 45' % % % Nifty 7' % % -1.01% Russian RTS 11' % 3.54% 19.32% MSCI EM % % -5.56% MSCI World 1' % -0.87% 10.57%

6 EQUITY MARKETS

7 MSCI World Index Weekly We are currently retesting the resistance & a weekly break above this level would confirm a resumption of the global bull trend of equities. Be cautious on the downside given that a break below on a daily close would most probably lead the market to revisit to increasing uncertainty.

8 S&P 500 Weekly & Daily The main US Equity index is currently the most robust amongst all markets. After breaking through the 50 week moving average, we are seeing a 5 th week of consolidation with downside support in the area of to on a dailyclose.ontheupside,adailybreakabove2 100wouldleadthemarkettotestyearlyhighs.

9 DJ Eurostoxx50 -Daily European equities that have been our favored market since a few months showed extreme weakness last Thursday linked to positioning on the EUR/USD currency pair. We recommend to play a rebound in the short term as long to holds on the downside, otherwise we believe investors should tactically reduce exposure.

10 GLOBAL MARKETS

11 Dollar Index Daily We had been selling US dollar exposure during the upside stretch we saw over the past 2 weeks and start buying after the ECB comments of Last Thursday. We are buyers as long as holds on a daily close (200 Day MA) since the global uptrend remains intact.

12 EUR/USD - Monthly The EURUSD is the leader in the US Dollar mix and is setting the trend. The medium to long term trend has only started resuming and a retest of the 2015 lows is imminent. The underlying should reach 0.98 over the coming 6 months in an attempt to replicate the last 6 month range amplitude.

13 Gold - Monthly We remain structurally bearish on Gold and have a short term target at USD We shorted the recent bounce and believe that many investors are uninterested in the precious metal even if we are in times of increased volatility for risky assets. Only buy a clear break of USD on a Weekly close.

14 CrudeOil-Weekly Crude Oil remains in a downtrend and even though we had a serious rebound last week, we believe that until is not broken on a weekly closing level investors should take advantage of spikes to exit.

15 SECTORS AND RELATIVE VALUE

16 EuroStoxxvs. S&P 500 -Daily We see more upside on the EuroStoxx than the S&P 500 given our view on the Dollar and the technical pattern of each index. The relative performance remains close to multi years lows and there is ample room for a rebound. This view can be implemented as a long/short trade using mini-futures. Relative performance of the EuroStoxx versusthes&p500since2011.

17 European Banks (ishares EStoxxBanks) Daily The sector has lagged the broader market after the recent earnings season. Momentum is looking negative in the very shorttermandwerecommendtobecautiousifevereur13.00breaksonadailyclose.

18 US Banks (SPDR S&P Bank ETF) Daily HigherratesandgoodeconomicgrowthintheUSofferagoodenvironmentforUSbanks.Thesectorshouldcontinue tooutperformin2016.abreakabove$37.30couldfreeupthewayto$45.

19 US Pharma (SPDR S&P HealthCare ETF) Weekly After years of a strong and regular performance, the US Health Care sector entered a corrective movement in October. The noise about price controls was a excuse for investors to take some profit and reduce their overweight positions. The sector fundamentals remain strong and this correction offers an opportunity to reenter the trade.

20 US Consumer Discretionary (SPDR ETF) Daily ThesectorhasfailedtomakeanewhighafterThanksgiving.Ashorttermpullbackwillofferanopportunitytoreenter thetrade.technicalsshowanupsidetargetatusd88.00intheshortterm(3months).

21 Disclaimer Ucap Hong Kong Asset Management Ltd has issued this document for information purposes only. This document may not be distributed to the United States, Canada, Australia or to any other jurisdiction in which its distribution is unlawful. If you require investment advice or wish to discuss the suitability of any investment decision, you should contact your professional advisers for financial, legal or tax advice when appropriate. This document is not and should not be construed as an offer to sell or a solicitation of an offer to purchase or subscribe for any investment or service. Ucap Hong Kong Asset Management Ltd has based this document on information obtained from sources it believes to be reliable but which it has not independently verified. Ucap Hong Kong Asset Management Ltd makes no guarantees, representations or warranties, and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion herein are subject to change without notice. Members of the Ucap Hong Kong Asset Management Ltd and/or their officers, directors and employees may have positions in any securities mentioned in this document(oranyrelatedinvestment)andmayfromtimetotimeaddtoordisposeofanysuchsecurities(orinvestment). In the case where this document is distributed in the United Kingdom by a person who is notauthorized by the United Kingdom FinancialServices Authority; itis only intended for persons who (i) have professional experience in matters related to investments or (ii) are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations, etc") of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (as amended) or to whom it may otherwise lawfully be communicated by such an unauthorized person (all such persons together being"relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons. Past performance is not necessarily a guide to future performance. The value of any investment or income may go down as well as up and you may not receive back the full amount invested. When an investment is denominated in a currency other than your local or reporting currency, changes in exchange rates may have an adverseeffecton thevalue, priceor incomeofthatinvestment. In thecaseofinvestments for which thereis no recognized market, itmay bedifficultforinvestors to sell their investments or to obtain reliable information about their value or the extent of the risk to which they are exposed. Investment in any market may be extremely volatile and subject to sudden fluctuations of varying magnitude due to a wide range of direct and indirect, influences. Such characteristics can lead to considerable losses being incurred by those exposed to such markets. Copyright. Ucap Hong Kong Asset Management Ltd 2015 ALL RIGHTS RESERVED No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, whether electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of Ucap Hong Kong Asset Management Ltd.