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Technical Update - ABN AMRO & ING Group
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
Summary: ABN AMRO and ING Group hit by heavy selling after SVB Financials news being trouble. But both banks have looked toppish for some time. AEX 25 still holding up above key support at around 735.
ABN AMRO gapped lower this morning and is trading around its medium-term rising trendline.
RSI has warned about an uptrend exhaustion showing divergence. However, support at around 15.25 is still not tested. If ABN closes below 15.25 there is strong support around 14.33.
14.33 is key support and a close below is likely to fuel a sell-off down around 11.84. For ABN to resume uptrend and reverse this likely bearish scenario a close above 17 is needed. First indication of this (uptrend resuming) to play out could be a close of the4 gap i.e. a close above 16.43. However, 16.43 is now a resistance level
RSI has warned about an uptrend exhaustion showing divergence. However, support at around 15.25 is still not tested. If ABN closes below 15.25 there is strong support around 14.33.
14.33 is key support and a close below is likely to fuel a sell-off down around 11.84. For ABN to resume uptrend and reverse this likely bearish scenario a close above 17 is needed. First indication of this (uptrend resuming) to play out could be a close of the4 gap i.e. a close above 16.43. However, 16.43 is now a resistance level
ING Group is testing support at around 12,34 after gapping lower this morning. The selling pressure comes after SVB Financial in US is in trouble. However, the chart on ING has warned about a top and reversal for the past week or so.
Divergence on RSI (see explanation at the bottom of this article) has been warning of potential uptrend exhaustion and the Evening Doji top and reversal pattern (circled) strong indicated a peak was in place.
At the time of writing RSI is below 40 i.e., in negative sentiment. A close below will confirm downtrend in ING.
Key support at around 12. A close below will further add to the bearish scenario with downside potential to around 11. .
For ING to resume uptrend a close above 13.50 is needed. First indication of this to occur would be if ING can close the gap created this morning i.e., a close above 13.04 is needed.
AEX25 Technical Update 6th March is still valid:
AEX 25 broke bearish out of its rising wedge like pattern but didn’t travel very far until buyers came back lifting the Index from the 0.382 retracement. Divergence on RSUI indicates the uptrend is quite stretched and a correction should be expected. However, AEX could resume uptrend. A close above 778 which is a strong resistance level. Could push the Index towards all-time highs around 830.
A break below 743 and AEX will test key support at 735. A close below could fuel a sell-off down to around 700.
However, as the current picture stands AEX could be range bound between 735 and 778 for the foreseeable future. A break out is needed for direction
AEX 25 broke bearish out of its rising wedge like pattern but didn’t travel very far until buyers came back lifting the Index from the 0.382 retracement. Divergence on RSUI indicates the uptrend is quite stretched and a correction should be expected. However, AEX could resume uptrend. A close above 778 which is a strong resistance level. Could push the Index towards all-time highs around 830.
A break below 743 and AEX will test key support at 735. A close below could fuel a sell-off down to around 700.
However, as the current picture stands AEX could be range bound between 735 and 778 for the foreseeable future. A break out is needed for direction
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
Author is holding a short position in AEX
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