Technical Analyst, Saxo Bank
Summary: ASML Holding and ASM International have been moving higher in rising channel patterns since New Year. But now they are facing strong resistance and a correction could be imminent
The Semiconductor industry has been on the rise since new year . Read latest analysis here:
https://www.home.saxo/content/articles/equities/technical-analysis-us-equities-higher-led-by-semiconductors-24012023
ASML Holding has since new year been trading in a tight rising channel and is starting to look toppish. As can be seen on the weekly chart ASML has strong resistance at around 632.70-642. Divergence on RSI indicates a correction could be imminent.
First indication of an unfolding correction is if ASML closes below its lower rising trendline.
A close below 600 is likely to signal that correction. A correction that could take ASML down to around support at around 564 possibly trying to close the gap. If closing the gap the trend could reverse pushing ASML lower to 525-500.
If rebounding from support at 564 or if ASML doesn’t correct that low the uptrend is likely to resume.
If ASML closes the gap AND breaks below its wide rising channel (on weekly chart) the medium-term uptrend is likely to reverse
A close above 642 another rally could be fueled to 700-725.
ASM International is testing strong resistance at around 321. Divergence on RSI indicates the short-term uptrend could be exhausting and a correction is likely. A correction down to around 286 possibly dipping down to 276.70 maybe even 286.60 i.e., 0.618 retracement before uptrend is likely to resume.
If ASM can close above 321 there is room up to strong resistance at around 343 and the 0.618 retracement of the 2022 bear move. A close above 345 400 would be in sight.
For ASM to reverse the uptrend a close below 233 is needed.
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
The market is trying to get back to the pre-Covid and pre-war times, but that model is broken. A new dawn is here and the financial world needs to adapt.
Steen Jakobsen,
Chief Investment Officer
A political switch in China towards less tough control of its people and companies may kick things back into gear.
Redmond Wong,
Market Strategist
While the economic situation in Europe may not be as bad as feared, there's still a plethora of things to fix.
Chris Dembik,
Head of Macroeconomic Research
As the world turns increasingly bipolar, equity markets face harsh times as they transition into the new reality.
Peter Garnry,
Head of Equity Strategy
New alliances and collaborations outside of China may lead to prosperous times in Asia.
Charu Chanana,
Market Strategist
For years, it was thought that the balanced portfolio was a thing of the past. But recent developments may have changed that.
Peter Siks,
Investment Coach
Following a dramatic and volatile 2022 with good returns, a lot of this year's commodity performance may be driven by Chinese politics.
Ole S. Hansen,
Head of Commodity Strategy
2023 could be a tough year for currencies but EUR and JPY may have some upside.
John J. Hardy,
Head of FX Strategy
The commodity-heavy Australian market may have a good start to 2023, as the Chinese focus on growth signals demand for Aussie resources.
Jessica Amir,
Market Strategist
From a near-perfect environment for speculative assets before 2022 to the opposite, crypto faces fundamental challenges.
Mads Eberhardt,
Cryptocurrency Analyst