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PATRIS Weekly Technical Outlook - 9 November 2018

9 Nov 2018

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S&P500

The recovery from the October lows has been stronger than expected, with the S&P500 able to trade again above its 200-day moving average. The index has already recovered 61.8% of the decline recorded in October. 2757/2774 is a key support for the current pullback. Below this interval, our attention would be on 2734. Daily momentum indicators remain favourable. We see as possible new attempts to extend the upward move to the 50-day moving average (2829) or even closer to 2861. Despite the strong recovery from the October low, we still have concerns on the medium-term momentum indicators…A further move towards “zero” in the MACD would support the index in the near-term…

Euro Stoxx 50

Following a sharp move upwards from the October low, the Euro Stoxx 50 has stabilised. The index reached our first target (3233) but not the second level defined last week (3277). Daily momentum indicators have recovered from oversold and are now closer to neutral levels. Short-term pullback could target 3198. A move below 3177 could be a warning signal. Daily momentum indicators are still seen as able to continue their recovery, which would support the Euro Stoxx 50 and allow further attempts to reach the 50-day moving average (3289). Weekly technical indicators are at a low level. Here, a recovery is also possible, which would support the index in the near-term. A further move towards “zero” in the MACD would support the index in the near-term…

PSI20

The rebound from the October low remains weak. Focus in the short-term in on the ability of the PSI20 to move closer to 5097. Daily technical momentum indicators continue to recover from oversold levels. They will likely reach a neutral level over coming days, which could then push again the index lower if positive momentum remains so weak…RSI could still push higher in the short-term…

Bovespa

The recent high was not confirmed by daily technical momentum indicators. Weaker daily technical momentum indicators could push lower the Bovespa in the near-term. Focus should be on 83724. A move below 82000 would be a warning signal for the uptrend seen since the June low. Weaker MACD could be a headwind to Bovespa in the near-term.

WTI

WTI continued to fall since last week’s commentary. WTI is down by more than 22%, as we type, since the October high. Daily technical momentum indicators have reached an oversold condition, which increases the chances of a rebound in the near-term. WTI is not far from the February low. We would define $63.59 - $64.43 as a target for a near-term rebound.

Gold

Gold has stabilised following the upward move seen since the August low. Momentum indicators still support further attempts to extend the upward move. A 50% retracement of the January-August decline would target $1263. A move below the 50-day moving average ($1210) could be a warning sign. Medium-term outlook remains cautious. RSI did not reach an overbought reading…

EUR/USD

EUR/USD reached the target defined last week at 1.1498$/€. The last couple of days showed new signs of weakening, as the index moved again towards its recent low. After not being able to break above the 50-day moving average in October, EUR/USD did not show this time positive momentum to even move closer to the same DMA. EUR/USD is likely to keep a downward bias. A move towards 1.1187$/€ would represent a 61.8% retracement for the December 2016 - February 2018 up-move.

MSCI US vs. MSCI DM ex US 

Despite the sharp correction recorded by the S&P500 in October, the US equity index continues to outperform the MSCI DM excluding the US.

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Disclaimer

The information and opinion contained in this report was prepared by PATRIS - SOCIEDADE CORRETORA, SA ("Patris"), which is part of the group of companies whose holding is PATRIS INVESTIMENTOS, SGPS, SA (Patris Group), listed in Alternext, which holds 100% of the share capital and voting rights of REAL VIDA SEGUROS SA which, in turn, holds 100% of the share capital and voting rights of Patris.

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