Tygodniowy komentarz MM Prime TFI S.A. - 23 listopada 2015 r.


After a very quiet and uncertain beginning of the week associated with earlier terrorist attacks in France, we saw increases on stock markets. Slightly worse publications than expected on industrial production (a monthly downturn of 0.2% against expected growth of 0.1%) in the USA caused deterioration on Wall Street. However, the key event for investors was a midweek release of the FOMC meeting minutes. In regards to that, the Council acknowledged, there would be probably an interest raise in December. It means that the US economy recovered and a buy signal appeared on the markets. Looking at the charts of the main indices of US, you can see almost identical movements. The S&P500 rose by 3.3%, the Nasdaq went up by 3.6%, and the DJI took off by 3.4%. European markets also grew. German DAX rose by 3.8%, French CAC40 increased by 2.1%, and the British FTSE250 soared by 2.5%. Moreover, there was a conference of Mario Draghi last Friday. He admitted, that European Monetary Policy should be soften. It probably means that the scale of QE will be extended.

The Warsaw Stock Exchange did not disappoint and most indices increased, but not as much as the foreign ones. The expose given by a new prime minister Beata Szydlo was the main event of the week and it weakened the market only temporarily. As we expected, the plans of the new government had already been discounted in the prices. That day, there was also a release of employment and wages figures in enterprises with more than nine employees. The former rose by 3.3% YoY and the latter soared by 1.1% YoY. On Thursday, we found out that the industrial production increased by 2.4% YoY vs 3.2% exp. Nevertheless, the retail sales grew surprisingly by 0.8% YoY vs 0.6% exp. There were also many financial results presented by companies. Consequently, the blue chip index climbed weekly by 2.2%, the mWIG40 increased by 0.8%. Unfortunately, the sWIG80 deteriorated by 0.4%.

In the coming week, there will be a lot of economic data, especially from euro zone, Germany, France and the USA. Investors should pay attention to the publications of the PMI indicators and the revision of the US GDP growth. The United Kingdom and Germany will release their GDP growth too. Additionally, the Ifo indicator in Germany and the unemployment rate in Poland will be announced. On Thursday, Americans celebrate Thanksgiving Day, so the US stock markets will be closed.

Technical analysis


Graph 1: WIG20 daily. Source: Stooq.

The WIG20 is still in a long-term downward trend. Lately the index was trying to remain above the level of 2,000 points. This ended with a success. Moreover, the WIG20 defeated a short-term resistance line. However, the RSI oscillator started to grow and it is not pointing out a buy signal. It could mean a return to further declines. Nevertheless, the short-term breakdown of resistance line with a positive divergence of the MACD oscillator give us some optimism. This can mean that formation of a price floor and a buy signal.

Graph 2: Eurocash daily. Source: Stooq.

This time we consider the Eurocash, which published its financial results for the third quarter of 2015. They were better than expectations. Recently the share price had moved closer to the support line, trying to break the trend. After the release of the financial results, the demand definitely strengthened. The RSI oscillator began to weaken, but it was far from indicating a buy signal which was identified by the MACD oscillator. Currently, the share price is PLN 53.65 and it heading towards its historical level. By the time the MACD line and signal line do not weaken, which would mean negative divergence, we can expect further increases in the stock prices.

Authors: MM Prime TFI S.A. Investment Management Team

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