Technical Analyst, Saxo Bank
NVIDIA formed yesterday another bearish engulfing top and reversal candle. The first one formed two weeks ago is still intact and having another one formed within a few weeks is a strong sign of uptrend exhaustion.
Adding to that, both the declining traded volume and the strength indicator RSI are showing divergence, i.e., strongly indicating uptrend exhaustion.
Apple failed to close above resistance at around USD 179.25 and got hit by another round of selling.
The bearish trend is resumed and Apple could test the support at around USD 166.89–165.67 shortly. That area is key for the medium-term picture.
A close below could fuel a sell-off down to the consolidation area USD 155–145. RSI is in negative sentiment with no divergence supporting the bearish outcome.
In the bigger picture, Apple has formed a double-top-like pattern (more visible on the weekly chart) that will be confirmed by a close below USD 165.67.
Usually, when a double top pattern has been confirmed by breaking below the valley, the price comes back down to around the base/consolidation area. The base area is the sideways trading behaviour prior to the bullish move higher to the first top.
The lower part of that base area is also very close to the 1.618 projection of the double top (measured from the peak to the valley i.e., from USD 199.62 to USD 165.67).
The 1.618 projection is the usual distance prices are moving to after double top confirmation.
Both daily and weekly RSI are in negative sentiment supporting the bearish trend. For Apple to demolish and reverse this bearish scenario, a close above USD 179.15 is needed. If that scenario plays out Apple could establish an uptrend to around 185-190
Tesla yesterday tested the latest gap area only to get rejected. A close of the gap, i.e., a close above USD 188.14, is needed for Tesla to gain any further upside momentum.
The push to test the gap has come after RSI has been showing divergence since 14th March, indicating exhaustion of the downtrend.
The strength indicator, RSI is currently testing its upper falling trendline, and a close above would strongly suggest Tesla will have a go at the USD 188.14 resistance, possibly breaking it.
If buyers can lift Tesla to close above USD 188.14, the resistance that needs to be taken out next is the gap up to USD 207.83 back from 25th January.
However, with the rejection yesterday Tesla could be hit by another round of selling with downside potential to around USD 152 short-term. The selling pressure could very well intensify if Tesla drops back below USD 170.
As can been from the weekly chart Tesla is in a medium-term down trend (Lower Lows and Lower Highs) and if closing below USD 152 there is no strong support until around 110
To reverse the medium-term bearish trend a close above last Lower High i.e., above 205.60 is necessary
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.