OMXS30 showing signs of weakness in an long-term upwards moving trend

The NASDAQ OMXS30 took a down turn last week on light volume, coming off a technically overbought period of trade. The Swedish large cap index fell 2,6% and closed the week at 1643,68. The returns for the year were thereby reduced to 7,7 %, 11,4% including dividends returns.

The NASDAQ OMXS30 followed suit as investors took profits through most of Europe’s leading indices; fueled by rumors that president Donald Trump’s tax reform plans had to be adjusted, or pushed forward into the new year. Last week’s analysis highlighted the importance of these tax reforms with regards to a sustained positive market climate.

This was confirmed last week when republicans in the senate presented a tax reform that varied form the proposed tax reform laid out by republicans in the house of representatives. Among the discrepancies were that the corporate tax reform be pushed into 2019. Despite this, Europe saw larger declines than US indices last week.

Among the companies that experienced larger declines last week were cyclical stocks, such as Getinge, following the presentation of future goals set forth by the company. Ericsson also made investors disappointed after not living up to the markets expectations during a meet-and-greet company fair.

The declines have however not affected the long-term picture for the OMXS30. In the weekly chart below, a long-term trend can still be observed, while the index retains its confirming trend pattern of higher highs, and lower lows above its rising 40-week moving average.