RBC Capital Technicians Like Financials And Tech, Sees Asset Managers Weakening

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  • Robert Sluymer, a technical analyst at RBC Capital Markets, suggested that a pullback in the markets over the coming weeks "appears likely."
  • Sluymer offered key support levels for the S&P 500 index: near 1925, 1920 followed by 1867.
  • Diversified financials and exchanges are among several sectors showing improving signs, while asset managers, energy and industrials extended to new lows.
  • Robert Sluymer, a technical research analyst at RBC Capital Markets commented in a note on Wednesday that short-term indicators that track two- to four-week shifts peaked at overbought territory last week.

    The analyst added that a pullback in the equity market over the coming weeks "appears likely" heading into the fourth quarter before a "more durable, investable, intermediate-term low" develops.

    S&P Key Resistance Numbers

    Sluymer noted the S&P has shown support at the 1925, 1911, 1900, 1867 levels and has met resistance at 2020, 2040/43, and 2070.

    Of note, the S&P 500's October 2014 lows fall within the 1815-1820 levels.

    Sluymer also pointed out the percentage of stocks trading above their 50 day moving average is beginning to rebound from "extremely oversold levels" and further supports a general market rebound in the fourth quarter.

    Related Link: Top Performing Industries For September 24

    Improving Relative Performers

    Sluymer noted sectors that are showing improving relative performance include:

    Financials:

    Diversified financials and exchanges are showing "accelerating" momentum.

    Examples include:

    • CBOE Holdings, Inc CBOE
    • Msci Inc MSCI
    • Nasdaq Inc NDAQ

    • CBOE Holdings, Inc CBOE
    • Msci Inc MSCI
    • Nasdaq Inc NDAQ

    Financials:

    Select regional banks/thrifts are "rebuilding relative performance."

    Examples include:

    • Bank Of The Ozarks Inc OZRK
    • Signature Bank SBNY
    • Commerce Bancshares, Inc. CBSH

    • Bank Of The Ozarks Inc OZRK
    • Signature Bank SBNY
    • Commerce Bancshares, Inc. CBSH

    Staples:

    Food products continue to "build upside leadership."

    Examples include:

    • Dean Foods Co DF
    • Flowers Foods, Inc. FLO
    • General Mills, Inc. GIS

    Discretionary:

    Restaurants leaderships is "intact."

    Examples include:

    However, Panera Bread co PNRA and Cheesecake Factory Inc CAKE are beginning to "emerge."

    Weakening Relative Performers

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    • Starbucks Corporation SBUX
    • Buffalo Wild Wings BWLD

    Technology:

    IT services such as Broadridge Financial Solutions, Inc. BR, along with Software providers like salesforce.com, inc. CRM are also showing leadership among technology firms.

    Related Link: China May Determine Outcome Of "Sell Rosh Hashanah, Buy Yom Kippur" Strategy

    Financials:

    Asset managers are showing "weakness," which is extending to new lows.

    Examples include:

    • Affiliated Managers Group, Inc. AMG
    • Franklin Resources, Inc. BEN
    • Invesco Ltd. IVZ

    Discretionary:

    Durables "remain under pressure" and are making new multi-week/month relative lows.

    Examples include:

    • Dana Holding Corporation DAN
    • BorgWarner Inc. BWA
    • Leggett & Platt, Inc. LEG

    Industrial:

    Ongoing "weakness" in machinery is showing its market in the industrial sector.

    Examples include:

    • Triumph Group Inc TGI
    • Esterline Technologies Corporation ESL
    • Honeywell International Inc. HON

    Energy:

    The list of new relative lows are "expanding again."

    Examples include:

    • Tidewater Inc. TDW
    • ENSCO PLC ESV
    • Denbury Resources Inc. DNR
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    Posted In: Analyst ColorTechnicalsTop StoriesAnalyst RatingsTrading IdeasRBC Capital MarketsRobert Sluymertechnical analysis
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