RBC Capital Technicians Like Financials And Tech, Sees Asset Managers Weakening
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.
Improving Relative Performers
Sluymer noted sectors that are showing improving relative performance include:
Diversified financials and exchanges are showing "accelerating" momentum.
Select regional banks/thrifts are "rebuilding relative performance."
- Bank Of The Ozarks Inc (NASDAQ: OZRK)
- Signature Bank (NASDAQ: SBNY)
- Commerce Bancshares, Inc. (NASDAQ: CBSH)
Food products continue to "build upside leadership."
Restaurants leaderships is "intact."
Weakening Relative Performers
Asset managers are showing "weakness," which is extending to new lows.
- Affiliated Managers Group, Inc. (NYSE: AMG)
- Franklin Resources, Inc. (NYSE: BEN)
- Invesco Ltd. (NYSE: IVZ)
Durables "remain under pressure" and are making new multi-week/month relative lows.
Ongoing "weakness" in machinery is showing its market in the industrial sector.
- Triumph Group Inc (NYSE: TGI)
- Esterline Technologies Corporation (NYSE: ESL)
- Honeywell International Inc. (NYSE: HON)
The list of new relative lows are "expanding again."
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