Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
Technical Analyst, Saxo Bank
Summary: Tesla uptrend is losing power. Key support at 187.60 for a trend reversal.
Microsoft broken rising trendline and looks set to reverse trend
Cisco jumped higher after earnings and guidance but there could be further upside potential
Microsoft has broken below its short-term rising trendline and seems set for a move down to the 0.382 retracement and support at around 254.78. 200 daily Moving Average will provide some support. However, a close below 254.78 Microsoft has a confirmed downtrend with support at around 242.
Cisco has broken bullish out of its falling channel taking out December peak. RSI is above 60 and Bollinger bands are expanding indicating higher Cisco levels.
If Cisco doesn’t close the gap created yesterday there is upside to 57.21 – see weekly chart. Some resistance at around 53.40. A weekly close above 60 on RSI will confirm the bullish outlook.
RSI divergence explained: When instrument price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend