Summary

At the beginning of the week there were some releases of economic data from China and Japan. Nevertheless, the weak data did not have a substantial impact on market sentiment, which had significantly improved in the next days. On Wednesday the market was totally dominated by bulls. As a result, it was the best day on the global stock exchanges during the whole week. Subsequently, the end of the week brought a stabilization. As a result, the NASDAQ went up by 3.9%, the S&P500 increased by 2.8% and the DJI grew by 2.6%. In Europe, French CAC40 took off by 5.7%, the British FTSE250 and German DAX rose by 4.7%. Investors paid their attention to central banks which released their minutes from the last meetings of their boards. However, they did not arouse any strong emotions. The FOMC’s members seemed to be doves and they would not probably raise interest rate. Additionally, representatives of the ECB were in favour of using new instruments to stimulate the inflation. It is also worth paying attention to the oil market. Russia and Saudi Arabia announced that they would maintain output at a current level. Therefore, the price of American WTI crude oil rose to 31 dollars per barrel. Meanwhile, the price of European Brent crude oil stabilized at 33 dollars per barrel. Investors learnt some other important economic data as well. The dynamic of American industrial production stood at 0.9% m/m vs 0.4% expected. Surprisingly, in the US the CPI grew by 1.4%. The market expected an increase of 1.3%.

Polish stock indices moved towards north – the WIG20 took off by 4.3%, the mWIG40 rose by 3.1% and the sWIG80 went up by 1.9%. Certainly, the improvement of global market tone and the political risk’s decline helped WSE to growth. There was also a release of the NBP’s minutes from the last MPC’s meeting. It turned out that the board was divided. Some of the members believed that the interest rates should be raised. The others thought that interest rates ought to be lowered or remain unchanged. Moreover, there were publications of data on the industrial production and the retail sales. The results were much worse than the market’s expectations. Nonetheless, they did not affect the main indices’ movements.

This week will be rich in macroeconomic data. In the Eurozone there will be a release of the PMI and the CPI, as well as confidence indices. In addition, it is worth paying attention to the publication of German Ifo and the Conference Board Index. The icing on the cake will be the release of the US GDP growth for the fourth quarter of 2015. Furthermore, at the end of the week there will be the G20 summit in Shanghai. In Poland, investors will learn the January unemployment rate.

Technical analysis

Graph 1: WIG20 daily. Source: Stooq.

The WIG20 broke a psychological level of 1,800 pts. and it stood at 1,841 pts. at the end of the week. What is more, the index of the largest companies broke a line of accelerated downward trend and it moved towards the next line of resistance. Nevertheless, it is worth reiterating that the WIG20 would have not grown so much if Wednesday had not been dominated by bulls (the daily growth stood at 3.6%). The RSI oscillator approached the level of 70 pts. and remained in an upward trend. Perhaps, it will indicate a sell signal soon. Next sessions may bring a correction whereas in the medium – term further growths can be expected.

Graph 2: Voxel daily. Source: Stooq.

One of the most interesting shares in the past week were those of Voxel - the price rose by 10.6%. Moreover, the share price was in the long – term upward trend. The first part of February brought a significant correction after which the market was dominated by bulls again. The RSI oscillator was neutral whereas the MACD oscillator indicated a buy signal. Thus, the share price may continue to grow. Next resistance level stands at PLN 21. A breakthrough will be a signal for further increases towards historical peaks.

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

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