Market Leader informed
Last week markets were neutral. On Thursday and Friday there the US celebrated Thanksgiving Day, so the stock market volume was low.
The last week was also noticeable for the worsening of the sovereign ratings in Europe. The treasury-bond yield of Spain, Portugal and Ireland exceeded the levels of the corporate emitters of the CIS states. For example, the current interest rate for 10-year treasury bonds is 9% in EUR. Such yields are unlikely to be offered even by the local banks.
One more negative cause was the situation around the inter-Korean conflict.
Out of some positive “drivers” we can single out the data on the initial jobless claims which came out better than expected. The latest value is 407.000, which is the minimal level over the last 2 years in terms of average estimation.
In the last article we shared with you the results of the “New Year rally” analysis and the seasonal factor connected with it. The general conclusion is that the market has very big chances to grow during the period from December to May, when it usually sees uptrend. Then it is replaced with retracement in summer and consolidation in autumn (fall).
To continue discussing the topic, it is supposed that the seasonality during the Thanksgiving Day period tends to retrace 2 weeks before the holiday and to grow 3-4 weeks after it.
Moreover, one should avoid buying the shares of retailers and companies engaged in producing toys and household electronics. Usually investors start work out (earn on) the seasonal increase in the sales volume and revenues of such companies long before the season starts while on the New Year’s Eve they take profit by closing their positions.
The following companies can be interesting for buyers: internet and telecommunication providers, mass media and entertainment and tourist companies. These kinds of companies are not very popular with investors during the period while they will also get big profits.
Over the last 3 weeks after the 1200 level of S&P500 was worked out (after which many institutions fixed the earned profits) the market has been seeing a slight correction.
We consider that the current consolidation phase is almost finished that is why we offer to focus on trend tactics, not on swing trading, as the trend may start this week.
You may use the following trading tactics (taking into account the New Year rally and the post-holiday growth):
· To start purchasing one should wait until today’s triangle is broken through. The closest objective is the resistance level at 1200 (S&P500). In the long-term perspective one may close the deal at the signs of strong overheating in May-June 2011.
· The risky scenario is the breakout of the 1180-1170 range supported by volumes. In this case we may suppose that the New Year rally has already been taken into account and worked out by the market in November while the market will continue retracing down to 1140.
We have sorted out the most significant papers in terms of fundamental analysis from all the sectors. All the shares meet the following requirements: they show an increase in the actual fundamental values and improvement of our forecasts on operational activity.
The focus-list is made by the analysts of the Sub-Department of Portfolio Investment on Nov 29th 2010
We also attach the analysis of the fundamental values and investor sentiments for TEMPUR-PEDIC INTERNATIONAL (TPX).
The selection of shares basing on their fundamental and technical values:
Alexey Afanasiev, Natalia Kovtun, Sergey Ovsienko, Tatsiana Mordvitseva.
The analysis of TEMPUR-PEDIC INTERNATIONAL - Tatsiana Mordvitseva.
Each analyst confirms that the assets (shares) were chosen independently, without the influence of their emitters or affiliated persons and that he/she doesn’t benefit from the assets recommended by him/her.
The material is provided by the Sub-Department of Portfolio Analysis, the Department of Investments, Masterforex-V Academy.
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