Brief Technical Analysis: MSCI ACWI, STOXX 600 Breaking Out, Adding Fuel for Further U.S. Equity Market Rally and more

In this briefing:

  1. MSCI ACWI, STOXX 600 Breaking Out, Adding Fuel for Further U.S. Equity Market Rally
  2. Future Bright Base Buy Zone and Rally Hurdle
  3. BHP and RIO Buy Levels and New High Targets with FCX Closing the Margin

1. MSCI ACWI, STOXX 600 Breaking Out, Adding Fuel for Further U.S. Equity Market Rally

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In today’s report we reiterate our bullish U.S. investment thesis, recap significant technical levels across indexes, and highlight attractive Groups and stocks within Health Care and Technology: Biotech, Mid-Cap, Biotech, Small-Cap, Semiconductors, Large-Cap, and Semiconductors, Mid-Cap..

2. Future Bright Base Buy Zone and Rally Hurdle

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Future Bright Holdings (703 HK) did not hold our 0.33 bottoming target Future Bright Bottom Projection but is in a basing process with improved volumes on the back of accumulation. Spikes continue to face risk of fades back to base line support near 0.25 with fresh support just above this area.

A bottom cycle on the back of the mature descending wedge is the stand out chart feature along with MACD bull divergence.

Bull wedge formations display a 70% or higher probability of seeing a powerful bull breakout.

MACD held major low support which is a strategic positive (non confirming new price lows as sellers are squeezed out) after the initial upside break in late October, the MACD is now staging a fresh rise off of backswing support.

We have cleared buy level and macro hurdle resistance at 0.65 as our intermediate target after a fresh pullback cycle within the basing process. Above 0.65 opens up the macro cycle.

Future Bright still shows risk of a value trap but as the global equity bull cycle matures in late Q1, Future Bright will become a more attractive rotation play.

3. BHP and RIO Buy Levels and New High Targets with FCX Closing the Margin

Bhp Billiton Ltd (Adr) (BHP US) and Rio Tinto Ltd (RIO AU) are beginning to see upside acceleration and part of a Q1 metals theme with Freeport Mcmoran (FCX US) undergoing a bullish breakout off of pivot resistance.

We have recommended rotation into metal stocks in recent weeks amid the pro China theme that should take hold in Q1 2020. Below we outline supports levels, a long strategy and upside tactical macro targets for BHP, RIO and FCX.

Weekly MACD cycles demonstrate strong cyclicality and support a multi quarter rally cycle.

FCX has broken out of a bull wedge and cleared resistance that will act as fresh buy support. RIO and BHP are moving into tactically extended readings with good underpinning to buy weakness.

We touch on copper support and upside potential. We have been bullish gold and we now expect broader commodity linked equities to perform in Q1 and into early Q2 2020.

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