Weekly Wrap: Is positive market breadth a contrarian indicator?

Weekly — November 30

The VNI rose another 2% last week week-on-week, blowing past our 2020 target of 1000
points (which we set in January and did not change throughout the year) under extremely
heavy domestic investor turnover. Over 80% of VNI constituents are now trading above
their 200-day moving averages, but history does not indicate that this necessarily indicates
overheating. We still think some level of profit-taking is likely to cap the short-term upside,
but we believe the fundamental and liquidity drivers remain sound and we reiterate our six-month
target of 1150 points.