Technical Analyst, Saxo Bank
Summary: Stock Indices in Europe have experienced a strong start to the new year with only one down day since December. There is room for further upside but trends do start to look a bit stretched. A correction should be expected this week.
Today's Saxo Market Call podcast.
Today's Market Quick Take from the Saxo Strategy Team
AEX25 has closed above key resistance at 741 and seems set for higher levels. Despite the new highs RSI hasn’t broken above the divergence level (horizontal line on RSI indicator) which is a bit of a worry. However, the trend is up and there is no resistance until around 772. But do expect some minor corrections.
A close below 724 will neutralize the uptrend and could be a signal of a larger correction to unfold.
CAC40 has experienced a strong uptrend reaching 1.382 projection of the December correction and taking out 7K. But there could be more upside in the cards for CAC40. ´RSI is bullish and with no divergence indicating higher levels. A move up to minor resistance area around 7,092-7,155 seems likely. However, do expect a correction to kick in shortly but short-term uptrend is intact as long as CAC doesn’t close below 6,829
RSI divergence: 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
A new fragmented world order can render some of today's infrastructure obselete, but it also calls for massive new investments across the globe, which requires a new set of strategic and tactical investment strategies.
Steen Jakobsen,
Chief Investment Officer
As globalisation turns to fragmentation, China seems set on playing a role in the global economy, while simultaneously working towards proofing its own economic situation from external shocks and crises.
Redmond Wong,
Market Strategist
The recent bank runs and ensuing challenges are reminicent of something we've seen before. Will it end like the S&L crises of 1986 and 1995?
Chris Dembik,
Head of Macroeconomic Research
Equity markets need to recalibrate to another - fragmented - global world. What's your view on equities in this market - are they going up or down?
Peter Garnry,
Head of Equity Strategy
With every development comes new opportunites, some of which could be in India. Have you considered the country as a part of your diversification strategy?
Charu Chanana,
Market Strategist
A collar is an option strategy that allows some protection while maintaining some upside potential. What investment would you like to use a collar strategy for?
Hans Oudshoorn,
Trainer Academy
There are arguments to be made for many commodities to have upside. Which are you paying the most attention to this quarter?
Ole S. Hansen,
Head of Commodity Strategy
In a very challenging macro environment, which currencies do you think will come out on top?
John J. Hardy,
Head of FX Strategy