Macro: Sandcastle economics
Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.
You can access both of our platforms from a single Saxo account.
Technical Update - Tesla and NVidia ripe for correction, but are eyeing +300 and 500 respectively
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: Tesla closed above key resistance level stretching its uptrend to extremely overbought. A short-term correction should be expected but medium-term uptrend points to +$300 level
NVidia uptrend weakening short-term but medium-term picture suggests higher levels are likely. Could be eyeing 500. See here why
Tesla rallied higher yesterday closing well above the GAP resistance area. Now there is no strong resistance until around 313.
However, short-term the stock is extremely overbought with RSI almost at 90 value. RSI value go only till 100. The stock is ripe for a correction but we need to see a top and reversal pattern.
However, a correction is likely to be just that, a correction short-term before Tesla resumes uptrend towards 313.
First indication of a correction would be a top and reversal pattern and a break of the steep rising trendline.
Key support is at 234.86.
RSI is showing positive sentiment with no divergence on both daily and weekly supporting the bullish scenario and possiblity of reaching 313
Nvidia (NVDA) is making new all-time high but neither daily traded volume, which is declining, nor the daily RSI (Relative Strength Index) are supporting the uptrend but instead showing divergence i.e., the uptrend is stretched and weakening.
To cancel the divergences an RSI close above the dashed horizontal line and rising traded volume are needed.
Weekly RSI is almost at 90 i.e., extremely overbought (it can only go to 100) but contrary to the daily time period there is no divergence indicating higher NVDA levels are likely after a likely correction.
The trend is your friend, and a top and reversal pattern should ideally be observed before a correction hits. But NVDA is ripe for a correction!
A correction should be fairly limited however, and not break below support around 366.35 before uptrend resumes with a possible move to the 1.618 projection just below 500.
Key support at around 374.75. A close below could lead to a sell-off down to 316.80 thuis trying to close teh gap.
Latest Market Insights
Quarterly Outlook 2024 Q3
Sandcastle economics
-
-
Bonds: What to do until inflation stabilises
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.
-
Equities: Are we blowing bubbles again
Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.
-
FX: Risk-on currencies to surge against havens
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.
-
Commodities: Energy and grains in focus as metals pause
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.
Disclaimer