Technical Analyst, Saxo Bank
Summary: Amazon, Apple and Alphabet all delivered disappointing earnings and guidance after market and are set to open lower. A lower open that comes after jumping higher yesterday forming gaps.
The lower open does not seem to reverse the uptrend all three companies are currently performing but the gaps are likely to be important for the direction. Which way will they be closed?
Amazon is set to open around 108.70 after earnings release yesterday after Market (indicated by the horizontal dashed line). That is around yesterday’s lows and in the gap performed during yesterday’s session. The same gap that was also created October 2022 during heavy selling pressure.
The key question is; will Amazon close the gap again to the upside i.e., will it close above 111 or to the downside i.e., will it slide lower to close below 105?
If the former there is more upside potential to around 121 short-term. Medium-term there could be potential up to resistance at around 136.45.
If closing below 105 selling pressure could push Amazon down to support at around 97.23.
However, the short-term underlying sentiment is bullish with RSI above 60 and no divergence and the 21 and 55 Moving Averages rising. This will offer some support to the share price.
Apple is set to open around 148.45 after earnings release yesterday after Market (indicated by the horizontal dashed line) i.e. around yesterday’s low. And still above 200 SMA and inside the rising channel pattern.
Similar Amazon Apple created a gap yesterday. If Apple closes below the 145.90 and below the lower rising trendline it could fuel further selling down to the medium term falling trend line and support at around 133.77.
But if Apple can close back above the resistance at 149.97 as it did yesterday there is likely more upside in store. Next resistance at around 157.35 and 163.43.
RSI still showing positive sentiment support bullish scenario to continue.
Medium-term Apple is still in a down trend. Close to be testing the 55 weekly SMA. A weekly close above 153.60 will change that. If Apple can close above 153.60 RSI is likely to close above 60 i.e. back in positive sentiment indicating higher levels with potential to strong resistance at around 164.25 and 0.786 retracement at 165.
If selling pressure returns and push Apple below upper falling trendline new lows to around 118.40 should is in the cards.
Alphabet (Google) C is set to open around the resistance the share price closed above yesterday, and back below 200 daily SMA.
However, the Double bottom pattern like scenario is still valid as long as Alphabet does not close below 102.50. A close below that level the double bottom pattern is busted and selling pressure is likely to send Alphabet share price down to around 95.90. First indication of that scenario could be if Alphabet closes the gap below 101.40
Double bottom pattern has potential up to around 120 with resistance at around 112.
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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.
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