 Hello, traders at CMC Markets. Welcome to another update by RRG Research for Monday 8th of August, and I'm recording this on Friday the 5th of August. My name is Trevor Neal and I'm presenting to you from London. Let's start with a quick look at what's going on in the major stock markets of the world as we do every week. Many commentators have picked up on the drive of US stock markets recent advance, something that we had seen early. We'll continue with our observation of the tech on thang stocks leading the pack and we'll focus on particular and look drill down to one particular stock. The first relative rotation graph shows the rotation of a group of international stock market indices versus in the center here zero return. So most often we in the past we've looked at the leading stock market indices versus the MSCI world index. So we're looking at the indices versus a index of the world. So how are they doing versus the index of the world? But here we're using this benchmark of zero annual return. So this is how a stock market is doing as an asset class. We see that everything except for one is in the leading quadrant. So stocks are doing well worldwide. We see both Europe and and the United States and other stock indices in populating this quadrant. They have turned over a bit since last week and all of them are pointing down which means that they we've got declining relative momentum rs momentum but still they are far to the right and strong. So as an asset class as a group compared to cash it's a good investment except in the case of the xang sits alone and in the most horrible place the lag in quadrant with very poor relative performance and also very poor momentum also. So this means generally we can say that stocks are doing well both absolutely not just relatively compared to the global index. In recent reports we had focused on the euro stocks 50. Last week it was poised to break this resistance at 3600. We noticed that the momentum was strong there and the likelihood was good that it would make the break and last it during the week it has powered ahead very strongly with other stock markets got to be said but this one in particular looks nice it has broken the downtrend line which has existed since the first day of January and we've got a number of tops in place lower highs we've broken through it I would say with a gap also a very strong break long bar and powered ahead. Notice also the momentum is very strong here so what we look at we've got this good base here from 3400 up to 3600 break out break of the trend line pushing ahead what resistance have we got we've got some resistance of 3800 ahead of us but that is not substantial resistance compared to some of the other indices but so far this has been good and it's got light resistance above it. How does the euro stocks 50 compared to the us 500 the spx index it's had a very strong week to broken this downtrend line now this resistance is quite strong in in in the case of the s&p we've got low low break rally what was support became resistance and then savage sell off here and now rally to this resistance for so this 4150 level represents strong resistance which could slow up the advance of this particular index which is one of a group of indexes which are strong performing strongly it has got strength to it the MACD is very positive here in this daily chart but it's got some headwind in it let's look at the tech stocks the NASDAQ the tech 100 index it has already cleared this resistance point and and has broken through the previous support points here and we hesitated then we broke down those support points became resistance rallied close to it not quite to it up to 12800 not up to the 13000 and then fell away sharply and then has now broken through both those resistance level 12800 and the 13000 let's call it 13100 level they have both been cleared so all the downtrend lines have been cleared on this we've got an uptrend line dominating the tech is the powerhouse of the more broadly based NASDAQ here we see the MACD is powering ahead as it has been from close south to the lows but the gap is widening between the MACD and its signal line this indicates increasing momentum now this relative rotation graph shows the what used to be called the fang stocks that's not a good acronym now for the group but these are the tech stocks now you see here it's a not a universal story here of every everything heading northeast it is not the case at all so what we've got is we've got using the benchmark of the s&p 500 we've got nix netflix facebook nvidia tesla and apple all heading in a northeastern direction that means easterly increasing JDKK strength ratio sorry and then also heading northerly this means that the momentum of the ratio is also increasing so this is a good direction but they're all in the improving quadrant so this is an opportunity so this is gaining power and not yet outperforming the the index the s&p itself okay and twitter both to the right of 100 here but the direction here is perhaps less attractive there's nothing wrong with them but the opportunity is in the improving area here so we've got all these in there we've got a clear message on what not to be involved in amongst the tech stocks google heading in absolutely the wrong direction it's heading south westerly westerly meaning meaning declining performance and then southerly also poor momentum of that performance too amazon is improving but it's way way over on the left hand side here of underperformance so this is where the opportunity area lies what should we look at to try and capitalize on the opportunity of the their fan group of technology stocks individual stock in the leading quadrant here with the longest tail so making the most progress furthest away from zero and pointing in this northeasterly direction is netflix this chart shows a netflix it's a daily chart of netflix and which has that highest rs momentum it is also rising and pointing to the right so this is the best relatively the best of that group in the improving quadrant it's not yet outperforming the group as a whole but it is looking like it's heading towards that direction so we see this daily chart here it formed a big base below 205 and we traded really from april below there following the dreadful subscriber figures which gave us that big gap set off there now we've broken the 205 level and we're pushing up this makes this a very substantial base very interesting that on the MACD here it never actually crossed down during this consolidation period now looking ahead of us if it continues to make progress from this big base we've got the gap here the gap from that shock results so the the gap was from 250 up to all the way up to 340 literally no trading took place there there are no profit takers or anybody like that it plummeted from 340 down to 250 without touching the sides so this means it's got no resistance until we get up to 340 it's edging towards i know it's maybe losing a little bit of momentum but it's edging towards a very significant breakpoint so breaking of this high here 248 could release a great deal of energy as we punch into this gap here we see this fang stock which is in the improving quadrant and it has such potential in the chart that it is really worth your attention i would say at the very least within the context of strong stocks generally some head headwinds for the broadly based s&p but the technology sector itself is looking strong i'll leave it to there for this week drawing your attention to netflix a very interesting chart within the technology sector within the stock indices which are themselves performing very well on an absolute basis thank you very much for watching we'll be with you again the same term next week and the same place goodbye from julius and i of rrg research and may the trend be with you