ETF and stock technical analysis: Avio stock jumps 5.81% in Milan, Brazil plunges after Lula, Banco do Brasil stock falls 29.33%, the Petrobras ADR 13.99%, Texas Instruments stock rises 4.72%
On Monday 26 October markets split in two. São Paulo collapsed: Lula's win in Sunday's runoff, with just over 51% of the vote against Flávio Bolsonaro, sent the Ibovespa down 13.9% in a single session, its worst day since March 2020, with trading halted for half an hour in the morning. Wall Street and Europe went the other way. On the Milan market the FTSE MIB ETF MIB rose 1.27%, the best of the large European markets, on banks and defence. The S&P 500 ETF SPY gained 0.71%, the Nasdaq 100 ETF QQQ 1.11%, the US technology ETF XLK 1.69% and the semiconductor ETF SOXX 2.85%.
In this edition you will find the technical analysis of the names that made the session, with our model's position. In Milan Avio stock jumped 5.81% on a Berenberg upgrade, Prysmian rose 3.86% and the banks gained between 1.5% and 2.9% ahead of the ECB. On Wall Street Texas Instruments stock rose 4.72% after its chief executive ruled out any slowdown in data-centre demand, Tesla stock gained 5.21% on a wave of upgrades and Lockheed Martin 5.13% on a Morgan Stanley upgrade. In Brazil Banco do Brasil fell 29.33%, Cosan 46.73% and the Petrobras ADR 13.99%, while Vale rose 4.01%. In London Experian lost 6.69% with no stated cause.
Our model was on the right side of many of the day's names. On oil, Petrobras in São Paulo is still up 32.72% since 13 July, and on the short side Braskem is up 63.78%. Among the longs Tesla is up 7.93%, Eni 18.27%, the energy ETF XLE 20.74% and the S&P 500 ETF 12.64%. Among the shorts FMC is up 54.31%, Hermès 36.99% and Stellantis 37.36%.
- ETF technical analysis: technology and industrials bounce
- Brazil: São Paulo collapses after Lula
- Semiconductor stocks: Texas Instruments, Arm, Intel, Tesla
- Defence and power: Lockheed, Rolls-Royce, Avio, GE Vernova
- News: Merck, EssilorLuxottica, Experian, FMC
- Milan: banks, Avio, Prysmian, Stellantis
- Europe: banks, Bayer, Hermès
- European indices: Milan the best
- This week's new buy signals
- This week's earnings
- This week's economic calendar
- SPY and QQQ technical analysis
ETF technical analysis: the semiconductor ETF rises 2.85%, the technology ETF 1.69%, industrials 1.42%; in Europe industrials and banks lead, Brazil ETFs lose more than 20%
An ETF is a listed fund that packs a whole basket of stocks into a single instrument, and it is the quickest way to see which sectors led the session. On Monday the leaders were the sectors sold hardest last week.
In the US SOXX, the iShares Semiconductor ETF, rose 2.85%, XLK, the US technology ETF, 1.69%, closing near the high, XLI, the industrials ETF, 1.42%, and XLY, the consumer discretionary ETF, 1.03%. Our model stays on the sell side of the first three: SOXX closed 8.25% below its weekly level, XLK 4.14%, XLI 2.53%. At the bottom XLC, the communication services ETF, fell 1.57%, closing near the low as Meta, Alphabet and Netflix slipped: the short is up 1.57%. XLE, the US energy ETF, rose 0.45%: long since 13 July and up 20.74%, 5.24% above the level. XLV, the US health care ETF, was flat and is up 19.94% since 26 May. MAGS, the Magnificent Seven ETF, gained 0.90% and stays long, 0.12% above the level.
In Europe the session belonged to the month's hardest-hit sectors: EXH4, the iShares STOXX Europe 600 Industrial Goods, the European industrials ETF, rose 1.66%, EXV1, the European banks ETF, 1.32%, EXHG, the European autos ETF, 1.14%, and EXV6, basic resources, 0.84%. All four are model shorts and stay in profit, up 4.16%, 5.42%, 2.24% and 8.11%. EXH9, the European utilities ETF, short since 10 August, has this week's candle turning to buy, 2.88% above the level: a provisional change, decided by Friday's close. According to the financial press, Brazil ETFs lost more than 20%.
The global ETF technical analysis, with every basket we follow, sits on the dedicated Market Pulse page.
Brazilian stocks: Cosan down 46.73%, Cyrela down 44.81%, MRV down 42.53%, Localiza down 39.58%, Banco do Brasil down 29.33%, Petrobras ADR down 13.99%; Vale up 4.01%
According to The Rio Times the Ibovespa closed down 13.88%, its steepest fall since March 2020, and the exchange halted trading for thirty minutes after the open. The trigger was Sunday's vote: according to NPR, Lula won the runoff with just over 51% against Flávio Bolsonaro's 48%, overturning the polls of the week before. The heaviest blow fell on domestic names and banks: CosanLong down 46.73%, also hit by news that Raízen's capital increase could reach 39.8 billion reais, CyrelaLong down 44.81%, MRVLong down 42.53%, QualicorpLong down 39.91%, LocalizaLong down 39.58%, EvenLong down 36.72%, Lojas RennerLong down 33.61%, Banco do BrasilLong down 29.33%, BradescoLong down 20.65%, ItaúLong down 13.66%. The PetrobrasLong ADR lost 13.99% in New York and the PETR3Long line 6.81% in São Paulo; MercadoLibreLong fell 7.81% on its exposure to Brazilian consumers.
Regulated utilities followed: SabespLong down 20.98%, LightLong down 25.89%, CemigLong down 11.40%. Exporters moved the other way, because a weaker real lifts their revenue in local currency: ValeShort up 4.01%, KlabinShort up 2.21%, BradesparShort up 1.32%, GerdauLong up 0.91%. Many domestic names closed well off the low reached at midday: Itaú, Petrobras and MercadoLibre in the upper part of the range, Qualicorp and Even near the low.
Semiconductor stocks: Texas Instruments up 4.72%, Arm up 6.19%, Intel up 4.04%, Western Digital up 3.63%, AMD up 2.80%, Nvidia up 2.39%; Tesla stock up 5.21%
Texas Instruments priced 2 billion dollars of notes in four tranches to fund its Silicon Labs acquisition, according to the company's release, and its chief executive ruled out any slowdown in data-centre demand. Texas Instruments stockLong rose 4.72% and pulled the sector with it: ArmShort up 6.19%, IntelShort up 4.04% on its Classiq acquisition, Western DigitalShort up 3.63%, MicronShort up 2.98%, AMDShort up 2.80%, Applied MaterialsShort up 2.74%, NvidiaShort up 2.39%, BroadcomShort up 2.33%, MarvellShort up 2.31%, and in Milan STMicroelectronicsShort up 2.70%. Tesla stockLong gained 5.21% to a three-month high on a wave of upgrades.
Underneath the rally sits the bill. According to Bloomberg, Anthropic filed for its listing with a warning that it may need more capital than planned, Broadcom arranged 63 billion dollars of financing for its chips and Meta asked the market for up to 95 billion. The most indebted compute providers had a weak day: NebiusShort down 3.45%, Applied DigitalShort down 2.30%; TeraWulfShort went the other way, up 5.83%.
Defence stocks: Lockheed Martin up 5.13%, RTX up 3.39%, Northrop up 2.53%, Rolls-Royce up 6.06%, BAE Systems up 4.14%, Avio up 5.81%; GE Vernova up 4.92%, Bloom Energy up 5.49%
According to Investing.com, Morgan Stanley upgraded Lockheed MartinLong from Equal Weight to Overweight after the ten-year F-35 agreement, and the stock gained 5.13%. With it RTXShort up 3.39%, Northrop GrummanLong up 2.53%, ThalesShort up 2.15%. In Europe Rolls-RoyceShort rose 6.06% and BAE SystemsShort 4.14%, both closing on the high, with Airbus and BAE in talks on the European fighter; in Milan AvioShort up 5.81%, FincantieriShort up 3.49%, LeonardoShort up 1.87%.
The data-centre power chain followed: GE VernovaShort up 4.92% on the eve of results, Bloom EnergyShort up 5.49%, Siemens EnergyShort up 3.77%, Quanta ServicesShort up 3.20%, VertivShort up 2.81%, InfineonShort up 3.14% on new switches developed with Enphase. Solar went down instead: EnphaseShort down 3.92%, SolarEdgeShort down 5.04%.
Merck stock down 3.21%, EssilorLuxottica down 3.42%, Duolingo down 3.10%, Netflix down 2.96%, Verizon down 3.49%; Circle down 7.07%, FMC down 8.71%, Rivian down 3.38%
Three pieces of good news closed lower. MerckLong lost 3.21% on the day of three positive phase III trials, EssilorLuxotticaLong 3.42%, closing on the low after third-quarter sales up 9%, with the market focused on Alphabet's challenge in AI glasses, and DuolingoLong 3.10% on the day Goldman Sachs raised its target. NetflixShort fell 2.96% on a survey showing less viewing time, VerizonShort 3.49% on revenue below expectations despite raised guidance. In London ExperianLong lost 6.69%, closing on the low: according to Proactive Investors no company statement explains the drop.
Digital assets had a weak day: CoinbaseShort down 2.95% on a Bernstein target cut, CircleShort down 7.07%, StrategyLong down 4.24% after pausing its bitcoin purchases, RobinhoodShort down 2.35%. FMCShort fell 8.71%, still on its mid-October guidance cut; RivianShort down 3.38% to a 52-week low; GameStopLong down 3.71%.
Italian stocks: Avio stock up 5.81%, Prysmian up 3.86%, Stellantis up 3.83%, Banca Mediolanum up 2.85%, BPER up 2.72%, Unipol up 2.36%; Telecom Italia down 2.45%, Eni down 1.79%
Milan outperformed every large European market, thanks to the banks, which rose together ahead of the ECB: Banca MediolanumShort up 2.85%, BPERShort up 2.72%, Monte dei PaschiShort up 2.10%, FinecoBankShort up 2.00%, UniCreditShort up 1.86%, Intesa SanpaoloShort up 1.71%, MediobancaShort up 1.63%, Banco BPMShort up 1.49%. UnipolShort rose 2.36% after crossing 30% of BPER, GeneraliShort 1.66%. Then defence: Avio stockShort up 5.81%, upgraded to Buy by Berenberg with a 39-euro target according to Il Sole 24 Ore, PrysmianShort up 3.86%, FincantieriShort up 3.49%, LeonardoShort up 1.87%. Stellantis stockShort rose 3.83% on the eve of results, STMicroelectronicsShort 2.70%, TenarisLong 2.66%.
Lower were Telecom ItaliaShort, down 2.45% on another delay to its subsea cable sale, Eni stockLong, down 1.79% with oil, RecordatiLong, NexiLong, down 0.89%, and ItalgasLong, down 0.73%.
European stocks: Barclays up 2.89%, Deutsche Bank up 2.79%, BNP Paribas up 2.43%, Société Générale up 2.03%, Bayer up 3.59%, Hermès up 3.23%, Engie up 2.19%; Experian down 6.69%
European banks rose together: BarclaysShort up 2.89%, Deutsche BankShort up 2.79%, closing on the high ahead of results, BNP ParibasShort up 2.43%, Société GénéraleShort up 2.03%, LloydsShort up 1.84%. BayerShort rose 3.59% on China's approval of asundexian, HermèsShort 3.23% after results, EngieShort 2.19% with power utilities, ThalesShort 2.15% with defence. Against the tide were EssilorLuxotticaLong, down 3.42%, and ExperianLong, down 6.69%.
European indices: the FTSE MIB ETF rises 1.27%, the DAX ETF 0.96%, the CAC 40 ETF 0.76%, the FTSE 100 ETF 0.73%
On Monday the FTSE MIB ETFShort gained 1.27%, closing on the high, the DAXShort ETF 0.96%, the CAC 40Short ETF 0.76% and the FTSE 100Long ETF 0.73%. The UK basket remains the only one on buy on the weekly, 2.30% above the level; the other three stay on sell, Milan 2.53% below the level, Paris 2.09%, Frankfurt 1.67%.
The model's short is up 5.59% on the Italian basket, on sell since 31 August, and 6.31% on the French one, since 24 August. The indices are holding up better than their markets: 65% of DAX companies sit above the 200-day average, against 32% of the whole German market.
This week's new buy signals: Lockheed Martin, Northrop, Starbucks and GSK rise; EssilorLuxottica, Fiserv, Spotify, London Stock Exchange and Airbnb slip below their entry
The weekend analysis published 29 new buy signals, born at the 23 October close: 21 tradable, across defensives, health care, financials, utilities and defence, from NikeLong to NexiLong, from Lockheed MartinLong to AstraZenecaLong.
From Tuesday to Saturday this card reports only what changes. Monday was defence's day: Lockheed rose 5.13% on the Morgan Stanley upgrade and Northrop 2.53%; Starbucks and GSK climbed ahead of results. EssilorLuxottica, Fiserv, Spotify and London Stock Exchange slipped below their entry, and Airbnb's daily turned to sell.
This week's earnings: Visa, Coca-Cola, Boeing and PayPal on Tuesday 27, Microsoft, Alphabet and Stellantis on Wednesday 28, Amazon, Eli Lilly and STMicroelectronics on Thursday 29, Exxon, Chevron and Intesa Sanpaolo on Friday 30, Apple on Monday 2 November
67 companies in our universe report over the next seven days. Today VisaLong, Coca-ColaLong, BoeingShort, PayPalShort and S&P GlobalLong; Wednesday 28 MicrosoftLong, AlphabetShort, GE VernovaShort, StellantisShort and Deutsche BankShort; Thursday 29 AmazonShort, Eli LillyLong, MastercardLong, CoinbaseShort, STMicroelectronicsShort and PrysmianShort; Friday 30 ExxonLong, ChevronLong, AstraZenecaLong and Intesa SanpaoloShort; Monday 2 November AppleLong and PalantirLong. Dates from the companies' own calendars.
Tuesday 27 October
Visa Long
Coca-Cola Long
Boeing Short
PayPal Short
S&P Global Long
Robinhood Markets Short
Royal Caribbean Long
Baker Hughes Short
Ecolab Long
Enphase Energy Short
Nebius Short
Hypera Long
Wednesday 28 October
Microsoft Long
Alphabet Short
ServiceNow Long
GE Vernova Short
Vertiv Short
Stellantis Milano Short
Deutsche Bank Short
BASF Long
GSK Long
Dassault Systemes Long
Fortinet Long
eBay Long
Ford Motor Short
American Water Works Long
Thursday 29 October
Amazon Short
Eli Lilly Long
Mastercard Long
Merck Long
Caterpillar Short
Intel Short
Coinbase Global Short
Strategy Long
Quanta Services Short
Gilead Sciences Long
Starbucks Long
First Solar Short
Roblox Long
Rivian Automotive Short
STMicroelectronics Short
Prysmian Short
Amplifon Long
Italgas Long
adidas Long
TotalEnergies Long
Shell Long
Vale Short
Ambev Long
Friday 30 October
Exxon Mobil Long
Chevron Long
AbbVie Long
BP Long
AstraZeneca Long
Intesa Sanpaolo Short
Regeneron Pharmaceuticals Long
Usiminas Short
Monday 2 November
Apple Long
Roku Long
Tuesday 3 November
Booking Short
Amgen Long
Pfizer Long
Shopify Long
Ferrari Short
Fiserv Long
Itau Unibanco Long
This week's economic calendar: UK budget and the Fed on Wednesday 28, US GDP and the ECB on Thursday 29, Bank of Japan and euro area GDP on Friday 30
The macro events of the next seven days that can move the indices, in Central European time. On Wednesday the UK government's Autumn Budget and the Federal Reserve decision; on Thursday the first estimate of third-quarter US GDP and the PCE prices from the Bureau of Economic Analysis, then the ECB; on Friday the Bank of Japan, Italy's GDP and inflation from Istat and euro area GDP from Eurostat; on Monday 2 November the ISM manufacturing index.
Wednesday 28 October
13:30 · United Kingdom · The UK government's Autumn Budget medium impact
19:00 · United States · Fed: rate decision, press conference half an hour later high impact
Thursday 29 October
13:30 · United States · Third-quarter GDP, first estimate, and in the same hour September income, spending and PCE prices high impact
14:15 · Euro area · ECB: rate decision, press conference half an hour later high impact
Friday 30 October
04:00 · Japan · Bank of Japan: rate decision high impact
10:00 · Italy · Third-quarter GDP, preliminary estimate, and an hour later October inflation medium impact
11:00 · Euro area · Euro area third-quarter GDP, flash estimate high impact
Saturday 31 October
02:30 · China · Official October manufacturing PMI medium impact
Monday 2 November
16:00 · United States · October ISM manufacturing index medium impact
Tuesday 3 November
16:00 · United States · September job openings medium impact
Further ahead, the central banks
Thursday 5 November · 13:00 · Bank of England: rate decision
Times are Central European. The calendar can change: central bank dates are those published by the banks themselves.
SPY and QQQ technical analysis, the S&P 500 ETF and the Nasdaq 100 ETF: SPY rises 0.71% and the long is back 0.71% above its level, QQQ rises 1.11% but stays on sell
SPYLong, the S&P 500 ETF, gained 0.71% on 31.7 million shares, closing in the upper part of the range and 2.08% below its all-time high. The long opened in April is up 12.64% and sits 0.71% above its weekly level, from 0.1% on Friday. QQQShort, the Nasdaq 100 ETF, gained 1.11% on 33.1 million shares, 6.64% below its record and 3.72% below its weekly level: the short opened with the 16 October candle sits just below breakeven.
The phases remain opposite. SPY has passed all three profit-taking windows and is managed with the weekly Inversion Point, which protects almost 12% from the entry. QQQ is back inside its waiting zone and stopped below its 20-week average.
The big picture: two markets in one session
On Monday Brazil repriced an entire market in one session after Lula's win, and no other market followed. Wall Street rose on the semiconductor bounce, Europe on banks and defence, and the Italian market was the continent's best. The rally lifted mainly the sectors that turned to sell last week, and the weekly changed on none of them. The Fed, the ECB and results from the big US names arrive between Wednesday and Thursday, and Friday closes both the week and the month.
What you find here. If you are trying to understand how to manage risk in trading, with stops, break-even stops, trailing and the declaration of stops that have been taken out, or how to read chart patterns (double bottoms, Bollinger bands, the Ichimoku cloud, price action trading), this is the desk's trading journal: published every morning before the US premarket, with our model's position on every instrument mentioned.
The full analyses behind the cards on this page.
* Our system. The rows of names at the foot of each card carry our model's position, long or short. Position from the latest published weekly analysis. Levels, targets and the trading plan sit in each instrument's own page. The two letters in brackets lead to the instrument page (G) and the full analysis (P).