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European Weekly Review
10 March 2014
             By S Gale, Analyst

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Europe Weekly Index Summary
 CloseWeekly
Volume
Weekly ChangeP&F TrendStop
Euro Stoxx 318.3213,149.5m-4.11-1.3% Bull 2 Jan 2014 312.50
Euro Stoxx 50 3095.313,287.3m-53.92-1.7% Bull 27 Dec 2013 3050.00
France CAC40 Index 4366.42689.3m-41.66-0.9% Bull 30 Jul 2012 4050.00
Germany DAX Index 9350.75496.3m-341.33-3.5% Bear 3 Mar 2014 9600.00
Netherlands AEX Index 396.28558.4m-2.26-0.6% Bull 9 Aug 2013 375.00
Spain IBEX 35 Index 10164.23,218.0m+50.00+0.5% Bull 7 Jan 2014 9800.00
Sweden OMX Index 1358.36522.4m-10.77-0.8% Bull 23 Dec 2013 1330.00
Switzerland SMI Index 8378.58209.6m-96.75-1.1% Bull 19 Sep 2013 8250.00
Closing prices last 5 days
European Macro Outlook

In general this past week, European indices have failed at recent highs and likely begin to trade lower ranges in the future. The ECB unexpectedly left monetary policy unchanged for this month, it announced on Thursday, despite calls from organisations such as the IMF to address the Eurozone's recent low inflation data. The US Dollar rose to new medium term highs against the Euro this week following the unexpected lack of action by the ECB.

Stock Index

The Euro STOXX 50 Index (SX5E) remains within its medium term uptrend but has not made new highs; on further failure, we would anticipate a short term trading range of 2,950 to 3,150.

 

The DAX Index failed below recent highs, forming a potential short term top with a possible downside to 9,000.

 

The ratio of the DAX against the SX5E also failed from recent highs.

Index Breadth

The All-Europe % 10 Week MA Breadth Indicator unwound from the top of the range to find support at 60% and now again approaches previous highs.

Sector Bulls & Bears

We note the European Energy sector as it develops its short term price base formation and tests its medium term relative downtrend.

 

The European Autos sector is failing to make new relative high; we become bearish and highlight the opening of our short position in BMW.

 

We note the European Basic Resources sector and it continues to make short term relative lows.

Stock Action

We close our short positions in European supermarkets Carrefour and Casino Guichard Perrachon as they both hit our stops as they retest recent highs.

We close our long position and take profits in Assa Abloy as it reasserted its short term top formation, after failing to break resistance from its 50-day MA.

 

We take profits in Skanska as it failed to make new highs and exhibits negative momentum divergence.

 

We open a short position in BMW as it reasserted its short term top and made a new relative lows. We target 76 and placed our stop at 84.5.

 

We open a short trade in Anheuser-Busch In Bev as it encountered short term price top resistance and relative downtrend. We target 65 and placed our stop at 78.5.

 

We opened a long position in Swedish Match as it made a short term price base formation above 200 and potential relative base at support. We target 225 and placed our stop at 195.

 

We bought Den Danske Bank as it made new short term price and relative highs. We target 170 and placed our stop at 134.

Model Portfolio
Longs
Date Stock Code Type Open Price Current Price % P&L Stop Comment
21 Mar 2013 Kabel Deutschland Holding AGKD8 Long 71.61 100.6 +40.48%99
20 Sep 2013 Hennes & MauritzHMB Long 266.4 284.8 +6.91%263
18 Oct 2013 SodexoSW Long 72.4 77.95 +7.67%71.5
30 Jan 2014 EricssonERICB Long 80.1 82.8 +3.37%76
4 Feb 2014 ABB LtdABBN Long 22.1 22.38 +1.27%21
4 Feb 2014 ING Groep NVINGA Long 9.726 10.205 +4.92%8.9
6 Feb 2014 Accor SAAC Long 36.165 38.305 +5.92%34
18 Feb 2014 Delhaize GroupDELB Long 49.77 53.12 +6.73%45
21 Feb 2014 Total SAFP Long 45.6 46.14 +1.18%43.5
21 Feb 2014 Saint-GobainSGO Long 42.78 42.4 -0.89%38
25 Feb 2014 GeberitGEBN Long 274.3 279.6 +1.93%255
27 Feb 2014 UBS AGUBSN Long 18.73 18.63 -0.53%17.6
27 Feb 2014 InvestorINVEB Long 227.5 224.9 -1.14%215
28 Feb 2014 Deutsche Post AGDPW Long 27.21 26.04 -4.30%25.5
4 Mar 2014 Swedish MatchSWMA Long 207.8 206 -0.87%195
5 Mar 2014 Den Danske BankDANSKE Long 145.8 148 +1.51%134

Shorts
Date Stock Code Type Open Price Current Price % P&L Stop Comment
8 Nov 2013 VallourecVK Short 42.17 38.165 +9.50%46
3 Dec 2013 ENIENI Short 17.21 17.34 -0.76%18.4
11 Dec 2013 Ebro PulevaEBRO Short 16.37 16.295 +0.46%17.3
21 Jan 2014 OMV AGOMV Short 34.795 32.175 +7.53%36.8
31 Jan 2014 Deutsche Bank AGDBK Short 35.89 33.9 +5.54%37.6
18 Feb 2014 Deutsche Boerse AGDB1 Short 58.8 57 +3.06%62
7 Mar 2014 BMW AGBMW Short 81.86 81.86 0.00%84.5
7 Mar 2014 ANHEUSER-BUSCH IN BEV NVABI Short 74.2 74.2 0.00%78.5
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