Eoin Treacy's view On December 9th I posted a reasonably comprehensive list of companies we consider to be Autonomies. They share a number of important characteristics. Such companies are truly global and have outgrown their domestic markets. They dominate their respective niches and benefit from strong brand recognition. The emerging global consumer class often represents their fastest growing revenue streams. They have strong reliable cash flows and a number share the S&P dividend aristocrat designation.

In addition to those mentioned on December 9th I have added Pfizer, Merck, GlaxoSmithKline, Qualcomm, Cisco Systems, HTC Corp, Emerson Electric, Intertek Group and Siemens to the list as per the recommendations of subscribers. .

Over the last few months, it has been gratifying to see so many of these shares move to positions of outperformance. However a number of these have rallied so impressively that the risk of at least a pause and consolidation has increased substantially. With each successive consecutive week to the upside the potential for a reversion towards a trend mean such as the 200-day MA increases.

At this juncture I thought it would be opportune to review the relevant shares.

In the restaurant sector McDonalds encountered resistance in the region of the psychological $100 level in January has pulled back gently, allowing the 200-day MA to catch up. If the medium-term uptrend is to remain consistent it will need to find support in region of $95. Yum Brands has surged higher since early December and is now more overbought relative to the MA than at any time in the last five years.

In the alcoholic beverages sector, Anheuser-Busch InBev, Diageo, SAB Miller, Remy Cointreau, Pernod Ricard and Asia Pacific Breweries have all performed impressively but are increasingly susceptible to mean reversion.

In the non-alcoholic beverages sector, Starbucks is becoming increasingly overbought in the short-term. Coca Cola hit a new 14-year high this week and a clear downward dynamic would be required to check potential for additional upside. Pepsi has lagged but continues to rally within its two-year range.

In the food sector, Nestle has rallied consistently from the August lows and posted a new all-time high three weeks ago. A break in the six-month progression of higher reaction lows would be required to begin to question medium-term scope for additional upside. Unilever has held a progression of higher reaction lows since late 2010 and is currently testing support in the region of the 200-day MA and the psychological 2000p. A sustained move below that level would be required to question potential for continued higher to lateral ranging. Kraft encountered resistance in the region of $39 in February and continues to pause below that area; unwinding the overbought condition relative to the MA. Heinz has been consolidating below $55 but with an upward bias for a year and a sustained move below the MA, currently near $52, would be required to question potential for a successful upward break.

In the nutrition and supplements sector, Mead Johnson Nutrition remains in a consistent medium-term uptrend and while somewhat overbought in the short-term a sustained move below the MA, would be required to begin to question medium-term scope for additional upside. Herbalife is becoming increasingly overbought relative to the MA and susceptible to mean reversion.

In the cosmetics & toiletries sector, Procter & Gamble has been ranging in the region of the upper side of the two-year range for a month but will need to hold above $68 to confirm a breakout and return to medium-term demand dominance. Colgate Palmolive completed a six-month consolidation earlier this month and continues to extend the breakout. Kimberly Clark hit a new all-time high in January and has been consolidating in the region of the 11-year base since. It has retained its upward bias and looks more likely than not to sustain an upward break. Reckitt Benckiser is testing the upper side of its two-year range. Hengan International rallied impressively this week to test its peak. Uni-Charm remains a relative strength leader but is becoming increasingly over extended relative to the MA. Estee Lauder completed a four-month range last week, reasserting the medium-term uptrend. Nu Skin Enterprises is becoming increasingly overbought and susceptible to mean reversion.

In the healthcare sector, Novo Nordisk posted a downside weekly key reversal last week, further increasing the potential for mean reversion. Biogen continues to trend consistently higher, defined by its well established progression of higher reaction lows. Merck, Eli Lilly, Bristol Myer Squibb and Sanofi all appear to be in the process of breaking out of lengthy ranges. Pfizer is leading in this regard. GlaxoSmithKline broke upwards in December but has pulled back to find support in the region of the 200-day MA. A sustained move below 1400p would be required to question potential for additional upside. Johnson & Johnson continues to range, albeit with an upward bias.

In the technology and consumer electronics sector, Apple, Microsoft, Qualcomm, IBM, Intel and Samsung Electronics are becoming increasingly overextended relative to their respective means and are susceptible to mean reversion. Google has returned to pressure the upper side of its two-year range and a sustained move below $600 would be required to question potential for a successful upward break. Novellus Systems at least partially unwound its overbought condition in February and hit a new high this week. A sustained move below $42.50 would be required to question medium-term upside potential. Microchip Technology has lagged but continues to hold a progression of higher reaction lows. High Tech Computer found support in December after crashing lower. It has held a progression of higher reaction lows since and a sustained move below TWD600 would be required to question potential for further upside. Cisco Systems found support in the region of the 2009 low in August and continues to trend consistently higher.

In the luxury goods sector LVMH, Compagnie Financiere Richemont, Christian Dior and BMW all hit new highs within the last few weeks but will need to hold the gains if medium-term demand dominance is to be reasserted. Nike posted a downside weekly key reversal last week, suggesting a reversion toward the mean is underway.

In the retail sector, Wal-Mart found support in the region of the 200-day MA two weeks ago and has returned to pressure the upper side of the 12-year range. A sustained move below the MA, currently near $57, would be required to question medium-term scope for additional upside. Tesco collapsed in January following its disappointing earnings announcement. It has at least stabilised in the region of the 2008 lows and a rally towards the mean appears to be underway.

In the mining sector, BHP Billiton and Rio Tinto remain within volatile two-year ranges. They have pulled back to test their respective six-month progressions of higher reaction lows and will need to find support soon to demonstrate a return to demand dominance.

In the industrial gases sector, Praxair and Linde both broke upwards from yearlong ranges within the last couple of weeks. Air Liquide is pressing the upper side of its range.

In the energy sector, Exxon Mobil continues to consolidate in the region of the 2011 high and a sustained move below $80 would be required to question potential for a successful upward break. Royal Dutch Shell has been prone to volatility over the last few years. It has pulled back to test the 2200p area and a clear upward dynamic will be required to indicate a return to demand dominance.

In the engineering sector, Siemens has ranged with a mild upward bias since September but will need to sustain a move above €80 to confirm a return to medium-term demand dominance. Emerson Electric has been ranging above the psychological $50 and the MA since January and a sustained move below that level would be required to question potential for continued higher to lateral ranging. In the quality control sector, Intertek Group has become overbought as it tests the 2500p area. At least a pause in this area appears likely.

Conclusion - While large overextensions to the 200-day MA are an abiding theme among many of the above shares it is by no means the only important development. A number are in the process of completing lengthy consolidations. This raises the potential of a rotational move between those most at risk of a reversion towards their respective means and those most likely to extend their recent breakouts. While the above shares represent a secular bull market theme they are all best bought once support has been found in the region of the MA, following a pullback.