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

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

  • 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 (NASDAQ: CBOE)
    • Msci Inc (NYSE: MSCI)
    • Nasdaq Inc (NASDAQ: NDAQ)

    Financials:

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

    Examples include:

    • Bank Of The Ozarks Inc (NASDAQ: OZRK)
    • Signature Bank (NASDAQ: SBNY)
    • Commerce Bancshares, Inc. (NASDAQ: CBSH)

    Staples:

    Food products continue to "build upside leadership."

    Examples include:

    • Dean Foods Co (NYSE: DF)
    • Flowers Foods, Inc. (NYSE: FLO)
    • General Mills, Inc. (NYSE: GIS)

    Discretionary:

    Restaurants leaderships is "intact."

    Examples include:

    • Starbucks Corporation (NASDAQ: SBUX)
    • Buffalo Wild Wings (NASDAQ: BWLD)

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

      Technology:

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

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

      Weakening Relative Performers

      Financials:

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

      Examples include:

      • Affiliated Managers Group, Inc. (NYSE: AMG)
      • Franklin Resources, Inc. (NYSE: BEN)
      • Invesco Ltd. (NYSE: IVZ)

      Discretionary:

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

      Examples include:

      • Dana Holding Corporation (NYSE: DAN)
      • BorgWarner Inc. (NYSE: BWA)
      • Leggett & Platt, Inc. (NYSE: LEG)

      Industrial:

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

      Examples include:

      • Triumph Group Inc (NYSE: TGI)
      • Esterline Technologies Corporation (NYSE: ESL)
      • Honeywell International Inc. (NYSE: HON)

      Energy:

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

      Examples include:

      • Tidewater Inc. (NYSE: TDW)
      • ENSCO PLC (NYSE: ESV)
      • Denbury Resources Inc. (NYSE: DNR)

      Image Credit: Public Domain

      Posted-In: RBC Capital Markets Robert Sluymer technical analysisAnalyst Color Technicals Top Stories Analyst Ratings Trading Ideas Best of Benzinga

       

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