Technical Analyst, Saxo Bank Group
Summary: ASML testing key support area after Earnings release. A close below can trigger a sell-off down to 500.
ASML is lower after earnings testing the upper level of the GAP support area at 559.70-551.50. The technical picture is a bit indecisive however, with the RSI being below 40 i.e. showing negative sentiment indicating lower levels are likely. But the share price is currently above the lower level of the Cloud Span (shaded area) and above key support – the GAP.
If ASML closes below 551.50 down trend has been confirmed and a sell off down to around 500 could be seen.
For ASML to demolish the potential bearish scenario a close above 609.70 is needed. If that occurs a move to test February peak at around 639.50 is likely.
Medium-term 551.50 support is key. A weekly close below medium-term trend has reversed to bearish . Support at around 500 but ASML could dip lower.
If ASML stays above 551.50 it could be forming a Descending triangle like pattern i.e., more or less trading sideways but with declining peaks. Break out direction would be needed. Vertical arrows indicate possible price action after a potential break out, it is the distance from peak to trough of the possible Descending triangle.
Weekly RSI is still positive with no divergence suggesting break out could be to the upside with a move above Q1 peak at 639.50 to follow. But confirmation is needed.
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