Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
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Technical Update - Tesla, Netflix & TSM all lower after earnings. Corrections unfolding
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary:
Tesla uptrend weakening and a correction down to 240 could be seen
Netflix top and reversal indicating larger correction
TSM rejected at resistance area. Short-term down trend unfolding
Tesla opening lower on the back of Earnings release After Hours Wednesday. Uptrend has been strong but is now weakening as indicated by RSI divergence on daily chart.
With the gap lower support at around 265.10 could be tested. A close below could see Tesla testing support at 240.70.
Medium-term the uptrend is intact until a close below 240.70. A dip down below 240.70 is not unlikely but if closing below the Medium-term trend is in jeopardy.
However, if the uptrend persists Tesla could medium-term i.e., in August-September move to resistance around 313-314.
Netflix is trading lower after Earnings release yesterday.
The Candle formed during Wednesday trading session is called a Doji (Open and close at almost same price level) and is likely to signa a top and reversal. If price action during today’s trading session is not closing the gap from Wednesday’s close regard the candlestick pattern as an Evening Doji top and reversal pattern.
Combined with RSI and MACD divergence it is a strong top and reversal indicator.
A correction down to the top of the strong support area at around 414.75-409.54 seems likely. A close below is likely to establish a down trend that could take Netflix even lower short-term
A close above the peak of the Doji i.e., above 483.39 will cancel the top and reversal pattern and extend the uptrend.
The medium-term uptrend would still be intact despite a correction down to 414 level.
Strong support gap area around 397.48-379.43 – see weekly. A closing of the gap i.e., a close below 379.40 is needed to demolish the medium-term bullish picture.
Rising 21, 55 and 200 Moving Averages are supporting the underlying bullish trend.
However, if Netflix closes below 379.40 the medium-term bullish trend is likely to be reversed.
TSM (Taiwan Semiconductor) has been in decline since TSM got reject at around 108- 110 and has opened lower just above support at around USD98.
If closing below 98 the Gap area could come under pressure.
RSI divergence back from June is still in play meaning TSM could perform a correction/trend reversal.
The medium-term picture (weekly chart) is a bit indecisive with higher closes i.e. uptrend intact but with RSI divergence. A close below 94.25 will demolish the bullish picture.
However, the 21, 55 and 200 weekly Moving Averages are all rising and will provide support, and the 55 could cross over the 200 when they are both rising in a few weeks’ time. If that occurs the two Moving Averages will form a Gold Cross indicating higher levels.
A close above 110.85 will fuel a move towards 2021-2022 peaks around 145. First indication the uptrend would resume is a close above 107.30 and RSI closing above its falling trendline
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