ETF and stock technical analysis: Saipem stock falls 4.28% in a flat Milan, the US healthcare ETF gains 2.37% to a record and Moderna stock rises 6.69%
Tuesday 20 October was a rotation day. The US healthcare ETF XLV gained 2.37% as the sector hit an all-time high, the real estate ETF XLRE rose 1.70% and the utilities ETF XLU 1.26%, while the technology ETF XLK slipped 0.28%. The S&P 500 ETF SPY added 0.34%, the small-cap ETF IWM 1.66%, and the Nasdaq 100 ETF QQQ closed down 0.10%. In Europe the European healthcare ETF EXV4 rose 1.91% and the industrials fund EXH4 fell 1.40%. In the Milan market the index closed flat, and the FTSE MIB ETF MIB recovered 0.68%, closing at the session high.
In this edition you will find the technical analysis of the names that shaped the session, with our model's position on each. On Wall Street Moderna stock rose 6.69% on an early flu season, Eli Lilly stock 3.49% to an all-time high, Bristol Myers stock 4.84% on two Phase 3 wins and Tesla stock 1.54% as a merger with SpaceX went under study; Meta stock fell 1.59% ahead of earnings and Quanta Services stock 3.62%. In Milan Saipem stock lost 4.28% and Prysmian 2.61%, while Unipol gained 2.21% and Enel 2.00%. In Paris Schneider Electric fell 3.29% after a 6 billion euro placement.
Our model was on the right side of many of the day's names. In healthcare Moderna is up 66.80% since 17 August, AbbVie 32.78%, Biogen 25.67%, Merck 21.15% and the XLV ETF 20.31%; in European electrical equipment the short on Schneider Electric is up 14.51%, on Siemens Energy 17.53% and on Prysmian 22.77%. In Brazil, where domestic stocks ran, the long on EcoRodovias is up 73.61%, on MRV 60.89% and on Cyrela 49.48%. Among the older shorts, XPeng is still up 40.52% after yesterday's bounce and Enphase 40.96%.
- ETF technical analysis: healthcare, real estate, utilities, technology, the broad-market funds
- Healthcare stocks: Moderna, Eli Lilly, Bristol Myers, Amgen, Sanofi
- Electrical equipment and semiconductor stocks: Schneider Electric, Siemens, Quanta Services, Arm
- Technology: Tesla, Meta, Netflix, Alphabet, Adobe
- Earnings and rates: Northrop Grumman, GE Aerospace, Brazil
- Milan stocks: Saipem, Prysmian, Unipol, Enel, Eni
- Europe: Rio Tinto, Experian, Barclays, BMW, BNP Paribas
- European indices: a pause after the drop
- This week's new buy signals
- This week's earnings
- This week's economic calendar
- SPY and QQQ technical analysis
ETF technical analysis: the US healthcare ETF climbs, the real estate ETF and the utilities ETF follow, the technology ETF and the European industrials ETF slip
An ETF is a basket of securities that trades on an exchange like a single stock: one purchase buys an index, a sector or a commodity. That is why it says more than the indices on a day like Tuesday, when the market neither rose nor fell but switched sectors.
In the US, defence won. XLV, the Health Care Select Sector SPDR, the US healthcare ETF, gained 2.37% as the sector hit a record, and our model has been long since 26 May, now up 20.31%. XLRE, the real estate ETF, rose 1.70%, XLU, the utilities ETF, 1.26%, and XLP, the consumer staples ETF, 0.62%. XLF, the US financials ETF, gained 1.20% and this week's candle has turned it to a provisional buy, as with XLY, the consumer discretionary ETF, and XLB, the materials fund. On the other side XLK, the Technology Select Sector SPDR, the US technology ETF, lost 0.28%, SOXX, the semiconductor ETF, 0.38%, VGT, the Vanguard technology ETF, 0.11%, and MAGS, the Magnificent Seven ETF, 0.37%; it has been long since July and is up 7.91%. XLE, the US energy ETF, rose 0.25% and is up 17.84% since 13 July. GLD, SPDR Gold Shares, the most heavily traded gold ETF in the world, fell 0.54%: the model has been short since 21 September, up 4.01%.
Europe's ranking looked similar at the top. EXV4, the iShares STOXX Europe 600 Health Care, the European healthcare ETF, gained 1.91%, and this week's candle has turned it to a provisional buy against the published short. European utilities in EXH9 rose 1.01%, autos in EXHG 0.78%. At the bottom, European industrials in EXH4 lost 1.40% with electrical equipment, oil and gas in EXH1 1.11%, technology in EXV3 1.10% and basic resources in EXV6 1.08%. The European banks ETF EXV1 slipped 0.46%, and the short is up 4.23%. MIB, the Amundi FTSE MIB, the FTSE MIB ETF, recovered 0.68%, closing at the session high: it trades thinly in Paris, and its Monday close had been lower than the index.
Our full ETF technical analysis, covering every fund we follow one by one, is on the dedicated Market Pulse page.
Broad-market ETFs, family by family. Our model follows more than thirty funds on the major baskets, the ones behind savings plans and long-term portfolios. On Tuesday almost all of them rose, and the broad US funds did better than the largest companies.
US market ETFs. SPY, the SPDR S&P 500, the most heavily traded S&P 500 ETF in the world, gained 0.34% and has been long since 6 April, now up 13.19%, with the weekly level 1.22% below the price; SPYM, the SPDR Portfolio S&P 500, and SCHX, the Schwab U.S. Large-Cap, are up 13.22% and 12.97%. XLG, the Invesco S&P 500 Top 50, sits just above its entry, while OEF, the iShares S&P 100, and the two broad Russell funds, IWB and IWV, sit just below. On the total market the model has been short since 14 September with VTI, the Vanguard Total Stock Market, the Vanguard total US market ETF, ITOT, SCHB and SPTM, all now just above the short's entry after yesterday's session. IWM, the iShares Russell 2000, the small-cap ETF, gained 1.66%, and the short is still up 6.83%.
Developed markets outside the US. VEA, the Vanguard FTSE Developed Markets, the Vanguard developed markets ETF, VEU, VXUS, the Vanguard Total International Stock, IXUS, SPDW and SCHF stay short, with gains between 1.3% and 2%; VGK, the Vanguard FTSE Europe, the Vanguard Europe ETF, rose 0.87% and the short is up 1.17%, like IEFA and IDEV. VT, the Vanguard Total World Stock, the global equity ETF, sits just below the short's entry.
Emerging markets and Japan. VWO, the Vanguard FTSE Emerging Markets, SCHE, SPEM and IEMG, short since 12 October, rose and now sit just above the short's entry. BBJP, the JPMorgan BetaBuilders Japan, the Japan ETF, stays long, below its entry.
Dividend and low-volatility ETFs. VIG, the Vanguard Dividend Appreciation, Vanguard's dividend ETF, DGRO and USMV, the low-volatility ETF, rose between 0.85% and 1.04%, and all three are above the entry of the buy signal born with the 16 October candle.
Healthcare stocks at a sector record: Moderna stock up 6.69%, Bristol Myers up 4.84%, Eli Lilly stock up 3.49%, Amgen up 3.29%; in Europe Sanofi up 3.62%
According to the day's coverage, the US healthcare sector reached an all-time high, and that single number holds three different stories. The first is obesity: Eli LillyLong rose 3.49% to its own record, with Novo NordiskShort up 2.42% in its wake. The second is the flu season, which has started early in the United States: ModernaLong up 6.69%, NovavaxLong up 5.64%, and in Europe SanofiShort up 3.62%, AstraZenecaShort up 1.76% and GSKShort up 0.73%. The third is company-specific: Bristol MyersShort gained 4.84% after two Phase 3 trials met their goals, in neuroendocrine tumours and lung fibrosis, and an upgrade from Goldman Sachs.
The rest of the sector moved around those three cores: BiogenLong up 4.12%, AmgenLong up 3.29%, RegeneronShort up 3.25%, MerckLong up 3.25%, UnitedHealthLong up 3.04%, VertexShort up 2.53%, PfizerLong up 2.28%, AbbVieLong up 2.26%, GileadLong up 2.25% and Johnson & JohnsonShort up 2.19%. It looked more like a defensive portfolio shift than a reaction to single headlines.
Electrical equipment and semiconductor stocks: Schneider Electric down 3.29%, Legrand down 3.05%, Siemens stock down 2.24%, Quanta Services down 3.62%, Eaton down 2.43%; Arm down 3.07%
The most consistent move of the day hit the suppliers of electrical equipment and power for data centres. According to the day's coverage Schneider ElectricShort lost 3.29%, the worst stock in the CAC 40, after raising 6 billion euros in an accelerated placement to fund its purchase of PTC. A Barclays study arguing that the pricing power of energy technology suppliers is fading weighed on Siemens EnergyShort, down 2.12%, and SiemensShort, down 2.24%; LegrandLong slipped 3.05% and in Milan PrysmianShort 2.61%. The same block moved in the US: Quanta ServicesLong down 3.62% after two downgrades, EatonShort down 2.43%, GE VernovaShort down 1.99%, VertivShort down 1.22%, Constellation EnergyLong down 1.65% and Bloom EnergyLong down 1.58%.
Semiconductor stocks fell on the same worry, the cost of money for AI infrastructure: ArmShort down 3.07%, Applied MaterialsShort down 1.97%, MicronShort down 0.98%, NvidiaLong down 0.29%, alongside reports of Chinese orders above 35 billion dollars that the company could only partly fill because of capacity limits. Against the tide, Western DigitalShort rose 3.44% ahead of earnings and Super MicroShort 1.15%, before jumping more than 11% after hours on preliminary results; IRENShort lost 4.00%.
Tesla stock up 1.54% as a SpaceX merger goes under study, Meta stock down 1.59% before earnings, Netflix down 1.66%, Alphabet down 1.13%, Apple stock down 1.00%; Adobe up 3.90%
Big tech paid for the rotation: MetaLong down 1.59% ahead of tonight's earnings, NetflixShort down 1.66% before its results, AlphabetShort down 1.13%, AppleLong down 1.00% and MicrosoftLong down 0.31%. After the close Netflix reported revenue in line with forecasts but guided sales below consensus, and was down about 5% after hours. TeslaLong rose 1.54%: according to the day's coverage the boards of Tesla and SpaceX have set up special committees to study a merger, with terms still to be agreed. AmazonShort barely moved after Monday's 4.98% gain.
Software went the other way: AdobeShort up 3.90%, IntuitLong up 2.97%, ServiceNowLong up 2.88%, IBMLong up 2.34% and HPShort up 3.21%. SalesforceShort closed flat after announcing a 5.66 billion dollar all-cash purchase of Braze. Outside technology, crypto names rallied: StrategyLong up 4.93%, CircleShort up 5.53%, RobinhoodShort up 1.75%. Chinese electric carmakers ran without a company-specific headline, XPengShort up 7.60%, Li AutoShort up 5.67%, NIOShort up 1.18%, and solar bounced with EnphaseShort up 5.22%, SolarEdgeShort up 4.19% and First SolarShort up 1.53%.
Northrop Grumman stock up 4.57%, GE Aerospace down 3.67%, Delta up 2.72%; in Brazil Lojas Renner up 5.59%, Cyrela stock up 5.39%, Localiza up 4.26%
Three earnings reports showed how little a good number counts on its own. Northrop GrummanShort beat forecasts and raised its guidance, up 4.57%; RTXShort posted equally solid numbers and a record order book but closed up only 0.64%, well below its morning levels; GE AerospaceShort lost 3.67% despite a record quarter, because its new guidance implies a 2.4 billion dollar cash charge. Oil hit a five-month high intraday after new attacks on Saudi facilities, then eased, and the retreat sent airlines higher: DeltaShort up 2.72%, UnitedShort up 2.27%, and with them ExpediaShort up 3.10%.
In Brazil the Ibovespa was the best index of the day, according to the day's coverage, with the real stronger and markets expecting a first Selic cut in November. Domestic stocks, the most sensitive to borrowing costs, ran: Lojas RennerLong up 5.59%, CyrelaLong up 5.39%, QualicorpLong up 5.26%, LocalizaLong up 4.26%, MRVLong up 4.24%, HyperaLong up 4.05%, EcoRodoviasLong up 3.15% and CosanLong up 3.13%. Banks lagged, BradescoLong up 2.24% ahead of earnings and ItaúLong up 1.88%; ValeShort lost 1.39% with commodities.
Milan stocks: Saipem stock down 4.28%, Prysmian down 2.61%, Banco BPM down 1.39%; Unipol stock up 2.21%, Enel stock up 2.00%, DiaSorin up 2.74%
The Milan market closed practically unchanged, with the FTSE MIB down 0.03% according to the day's coverage, after a weak morning recovered in the afternoon. The flat index hides wide extremes. SaipemLong was the worst Milan stock of the day, down 4.28% on a day of rising oil, with the EU review of its merger with Subsea7 in the background; PrysmianShort lost 2.61% with European electrical equipment and AvioShort 1.12%. Banks started weak and recovered part of the loss: Banco BPMShort down 1.39%, UniCreditShort down 0.58%, Intesa SanpaoloShort down 0.37%. Eni stockLong slipped 0.73% despite crude, on talk of a European windfall tax on energy, three days before its results; StellantisShort fell 0.66% and LeonardoShort 0.23%.
On the other side, healthcare and utilities. DiaSorinLong up 2.74%, AmplifonLong up 2.23%; Unipol stockShort up 2.21%, closing at the high on volume 4.6 times its median; InwitLong up 2.37%, ENAVShort up 2.14%, ItalgasShort up 2.05%, Enel stockShort up 2.00%, A2ALong up 1.61% and HeraShort up 1.38%: utilities benefited from higher energy prices. Telecom ItaliaShort, GeneraliShort and BuzziShort also rose.
European stocks: Rio Tinto down 2.53%, Glencore down 2.45%, Experian up 2.72%, BMW stock up 1.30%, Barclays stock up 0.32% ahead of earnings, BNP Paribas down 0.44%
In London the FTSE 100 slipped 0.29% according to the day's coverage, weighed down by miners: Rio TintoShort down 2.53% and GlencoreShort down 2.45%, dragged by copper. Anglo American confirmed its annual copper guidance despite a weaker quarter caused by heavy snowfall in Chile. UK jobs data came in stronger than expected and kept the prospect of high rates alive: LloydsShort down 1.12%, HSBCShort down 0.86%, while BarclaysShort rose 0.32% two days before its results. ExperianLong did well, up 2.72%, and TescoLong held still after Monday's gain.
In Germany the ZEW fell more than expected and producer prices rose 6.7% year on year. Carmakers held up, BMWShort up 1.30%, Mercedes-BenzShort up 1.51%, VolkswagenShort up 0.26%; SAPLong rose 0.86% ahead of tonight's earnings and Deutsche BörseLong 0.39%; InfineonShort fell 0.91% and Deutsche BankShort 0.89%. In Paris the strain on French debt, with the OAT-Bund spread at its widest since 2011, kept banks under pressure: BNP ParibasShort down 0.44%, Société GénéraleShort down 0.34%; luxury slipped with LVMHShort down 0.83% and EssilorLuxotticaShort down 1.02%, and AirbusShort fell 0.39%.
European indices: the FTSE MIB ETF recovers 0.68%, the DAX ETF slips 0.09%, the FTSE 100 ETF 0.29%, the CAC 40 ETF 0.46%
On Tuesday the four European indices paused after Monday's drop. The FTSE MIB ETFShort recovered 0.68%, but it is a thinly traded fund and its Monday close had been lower than the index: according to the day's coverage the FTSE MIB itself closed down 0.03%, and over the two days the two measures come back close. The DAXShort fund slipped 0.09%, the FTSE 100Long fund 0.29% and the CAC 40Short fund 0.46%. The UK basket is still the only one on a weekly buy, 2.25% above its level; the other three are short, Milan 3.16% below the level, Frankfurt 2.35% and Paris 2.40%.
The model's short is up 5.38% on the Italian basket, short since 31 August, and 6.43% on the French one, since 24 August; on the German one, short since 14 September, the price sits just below the entry. The monthly signal on the FTSE MIB and the CAC 40 is a provisional sell for October, and the 30 October close decides. The indices are held up by the largest companies: 65% of DAX members are above their 200-day average against 32% of the whole German market, and 65% of FTSE 100 members against 46% of the whole London list.
This week's new buy signals: healthcare and dividend funds move back above their entry, Air Liquide slips below, CME and Kinder Morgan report today
The weekend analysis published 42 new buy signals, confirmed by the close on Friday 16 October, and 22 are tradable: consumer goods, utilities, financial services, healthcare, energy and above all Europe, from DiageoLong to CompassLong, from RELXLong to Dassault SystèmesLong.
From Tuesday to Friday this card reports only what changes. On the third session eleven names move back above their entry with the rotation into defensives, Air Liquide slips below, and two, CME and Kinder Morgan, report today. The table shows the main ones; outside it SafiloLong, XLPLong, VIGLong and DGROLong are also back above their entry, and Kinder MorganLong reports tonight still below it. No daily signal has changed side and no name has left the group.
This week's earnings: Meta, Tesla, SAP, IBM and Texas Instruments today, Procter & Gamble, Barclays and Lockheed on Thursday 22, Eni on Friday 23, Visa and Coca-Cola on Tuesday 27
44 companies in our universe report over the next seven days. Today brings MetaLong, TeslaLong, SAPLong, IBMLong, Texas InstrumentsLong, AbbottShort, DanaherLong, CMELong and Kinder MorganLong; Thursday 22 Procter & GambleLong, Lockheed MartinShort, BarclaysShort, NebiusShort, Western DigitalShort, HoneywellShort and ValeroLong; Friday 23 EniLong, American ExpressShort and SLBShort; Tuesday 27 VisaLong, Coca-ColaLong, BoeingShort, S&P GlobalLong, PayPalShort and HSBCShort.
Wednesday 21 October
Meta Platforms Long
Tesla Long
SAP Long
IBM Long
Texas Instruments Long
Abbott Laboratories Short
Danaher Long
CME Long
Kinder Morgan Long
AT&T Short
CSX Short
QuantumScape Short
Thursday 22 October
Procter & Gamble Long
Lockheed Martin Short
Nebius Short
Barclays Short
Nokia Short
Western Digital Short
Honeywell International Short
Valero Energy Long
Newmont Short
Spotify Technology Short
Bloom Energy Long
PG&E Short
Banco Bradesco Long
Friday 23 October
Eni Long
SLB Short
American Express Short
Monday 26 October
Verizon Communications Short
Gerdau Long
Tuesday 27 October
Visa Long
Coca-Cola Long
Boeing Short
S&P Global Long
PayPal Short
Robinhood Markets Short
SoFi Technologies Short
Royal Caribbean Long
Baker Hughes Short
Ecolab Long
Enphase Energy Short
HSBC Short
Hypera Long
BigBear.ai Short
This week's economic calendar: UK inflation today, flash PMIs and UK retail sales on Friday, Ifo on Monday, the UK budget and the Fed on Wednesday 28
The macro events over the next seven days that can move the indices, in Central European time. Until Friday the calendar belongs to the UK and Germany; on Wednesday 28 come the UK government's Autumn Budget and, in the evening, the Fed's decision. Off the calendar, Moody's reviews France on Friday.
Wednesday 21 October
08:00 · United Kingdom · September inflation: the last price figure before the Bank of England on 5 November medium impact
Friday 23 October
01:30 · Japan · Japan's September inflation, a week before the Bank of Japan medium impact
08:00 · United Kingdom · September retail sales: the week's first figure on UK consumer spending medium impact
09:30 · Germany · October flash PMIs, first in Germany and then in the UK: the month's first reading on manufacturing and services, after a weaker-than-expected ZEW medium impact
Monday 26 October
10:00 · Germany · October Ifo business climate medium impact
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
Further ahead, the central banks
Thursday 29 October · 14:15 · ECB: rate decision, press conference half an hour later
Friday 30 October · Bank of Japan: rate decision
Thursday 5 November · 13:00 · Bank of England: rate decision
Times are Central European; Italy moves back to winter time on Sunday 25 October. 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 0.34% and leaves its congestion zone, QQQ slips 0.10% and stays short
SPYLong, the S&P 500 ETF, gained 0.34% and broke out of the congestion zone of the latest analysis to the upside, on 35.0 million shares against a 41.4 million average: it is 1.61% below its all-time high. The daily signal has been on sell since 14 October; the weekly signal stays on buy, in its twenty-eighth week, with the level 1.22% below the price. QQQShort, the Nasdaq 100 ETF, slipped 0.10% on 30.5 million shares against a 35.5 million average: it dipped below Monday's low and was bought back, closing mid-range. It stays short on the weekly signal, 3.97% below the level, and 5.93% below its record.
The two are in opposite phases. SPY has crossed all three profit-taking windows and is managed on the weekly Inversion Point. QQQ has a short born with the 16 October candle, with the first target about 7% below the price and the stop on the weekly level just over 4% above.
The big picture: a rotation
On Tuesday the market neither rose nor fell: it changed sectors. In the US healthcare reached a sector record, with financials, real estate and utilities following, while technology stood still and electrical equipment fell on two continents. In Europe healthcare and utilities rose, industrials and miners fell, and Milan closed flat. Our model was already long healthcare and short electrical equipment, and this was the session in which both readings showed. Tonight Meta, Tesla, SAP and IBM report; on Friday the weekly candle closes.
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).