Market Outlook November 16th - 20th

Market Outlook

- US : US indices traded up last week and close to strong resistance levels. No sector traded down WoW. The leaders were the Real Estate (+6.8%), Auto (+6.42%) and Semiconductors (+4.99%) sectors. Technically on the S&P 500, as long as 1105/10 is not broken up, we favour a down move with 1020 and then 978 as next targets. The daily technical indicators are mixed and the flat 20d moving average may allow for a pullback.

- EUROPE : In Europe, the main indices rose WoW. Shares Basic Resources (+5.78%), Chemicals (+4.35%) and Banks (+3.86%) led the market up. As in the US, no sector traded down WoW. From a technical point of view, on the STOXX 600 index: as long as 250 is not broken up, we favour a down move with 235 and then 231 as next targets. The flat 20d moving average and upper daily Bollinger band call for a continuation of the consolidation phase for now.

  November 16th - November 20th

 Market Round up

 Foreign Exchange

Euro/dollar : The RSI is turning up, the pair has rebounded on its new support and is challenging its next resistance. LONG above 1.4450 towards 1.5250 & 1.58.

Dollar/yen : The pair has struck against its resistance and remains within a bearish channel. SHORT @ 93 with 87 or even 84.20 in sight.

Company preview

 Target (USD 48.99 ; -1.43% ; TGT ; TGT.N)
On Tuesday, Target Corp is expected to deliver 3Q EPS of around $0.5 in line with last year on sales of $15.25bln vs $15.1bln. Recently, the US discount retailer reported October sales in stores open at least one year down 0.1% YoY and total sales up 3% to $4.54bln. In addition, the Co sees sales in stores open at least one year to be flat in November. Technically, the stock broke down a MT rising trend line's support last week. The risk is now a slide below the $48 support, which should spark a bearish acceleration towards $45.75.

 Air France-KLM (EUR 11.365 ; 3.65% ; AF ; AIRF.PA)
Wednesday, Air France-KLM may report a 2Q loss vs a profit a year ago. Last week, the Co's rivals, British Airways and Iberia agreed to a binding memorandum of understanding for their merger. In addition, Air France would consider cutting its ticket prices to better compete with its rivals. From a technical view, the stock is currently close to a major horizontal resistance around E11.6. Hence, a ST consolidation cannot be ruled out before any further upside.

 Ahold (EUR 9.155 ; 1.97% ; AH ; AH.AS)
On the same day, Ahold could announce 3Q net income of appx. E180m compared with E195m a year earlier on revenue of E6bln vs E5.8bln. Earlier this month, the Co said it would make some restructures at its European and US businesses. The Co was also upgraded to "strong buy" from "buy" at Standard & Poor's. From a chartist point of view, the stock remains well positively oriented. Above E8.8, a further up move is highly expected to E9.3 and E9.55 in extension.

 SABMiller (GBp 1674 ; 1.7% ; SAB ; SAB.L)
Thursday, SABMiller is expected to release 1H pre-tax profit of $1.6bln compared with $2bln a year earlier on sales of appx. $13bln vs $8.9bln. Earlier, the Co's US venture, MillerCoors posted 3Q profit up 37% YoY to around $230m. Besides, the Co would cut its capital expenditure in Africa to $200m in 2011 from the $370m previously expected. Technically, the stock is still on the upside, backed by its ascending 50D MA. We expect a test of its resistance zone around 1680p at first before further advance to 1750p.

 Dell Computer (USD 15.4 ; 3.63% ; DELL ; DELL.O)
The same day in the US, Dell Computer may unveil 3Q EPS of $0.27 vs $0.37 a year earlier on sales of $13.1bln vs $15.2bln. A week ago, the Co reaffirmed its plan to launch the sale of the Mini 3 smart phone in China and Brazil. From a technical view, the stock bounced on its 100D MA and currently consolidates above the $15 support. We are positive and expect a further rebound to $16.15 and then to $17 in the forthcoming days.

Selection of those events which may affect the stock prices of international Large Caps

Corporate Calendar November 16th - November 20th

Economic Calendar (CET) November 16th - November 20th