Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
Technical Analyst, Saxo Bank Group
Summary: Apple, Microsoft, NVidia and Tesla have reversed uptrends and built down trends. Uptrends in Meta and Alphabet are still intact but could soon follow the others lower
Apple is unfolding the Bearish scenario as described in the previous Technical Update Technical analysis Apple turning sour Amazon breaking range
The stock is close to testing support at around 176.40.
It has already closed below the Cloud and RSI is bearish although indicating oversold. The rising 100 daily Moving Average is offering some support and a minor bounce can be seen.
However, the trend is down and Apple is likely to see further selling.
From the previous update: “The weekly chart is drawing a more worrying picture; Two top and reversal although one still in the making. A shooting star that has not been cancelled and a bearish Engulfing in the making. The Bearish Engulfing candle will only be demolished if Apple can close above 193.41 today.
Adding to that the RSI is showing divergence and traded volume has been declining for the past 10 months, both a clear sign of a weakening of the uptrend.
A close above 198.25 is needed to demolish the top and reversal picture and extend the uptrend. First indication of that scenario to play out would be a close of the gap on the daily chart.
Yesterday Microsoft MSFT closed below support at around 323.24.
Downtrend is confirmed supported by negative sentiment on RSI i.e., below 40 threshold. MSFT is likely to slide further to the support at around 312.30.
A close below is likely to further fuel the sell-off towards 300.
A close above 338.55 will put the downtrend on pause.
Weekly chart formed a Shooting Star top and reversal pattern and RSI divergence strongly indicating a reversal also on medium-term. A downwards move to support area 315-308 is in the cards
Meta Platforms (Facebook) is working on closing the gap. A close below 301.19 is likely to push Meta to test the key support at around 288.30. The 55 Moving Average will offer some support around that level.
A close below 288.30 is likely to fuel a sell-off down to around the 272-260 area.
As long as Meta can stay above 288.30 the uptrend is intact but with the RSI divergence on both daily and weekly it is very weak and suggesting it is coming to and end. A close above 326.20 will extend the uptrend
Nvidia’s NVDA massive RSI divergence on both daily and weekly as been warning about uptrend exhaustion for a couple of weeks.
Now the uptrend has reversed short-term, a downtrend is established.
If NVDA is closing below support at around 406.30 and RSI below 40 threshold the down trend could be accelerated down to top of the massive gap area at around 376.56
To demolish and reverse the downtrend a close above 456.45 is needed.
Weekly chart formed last week a Bearish engulfing top and reversal candle and combined with the RSI divergence the uptrend is likely to have exhausted. A larger correction is likely to unfold
Alphabet C (GOOG) uptrend is still intact but if GOOG is closing the gap i.e., closing below 125.70 the uptrend is likely to have come to an end. RSI divergence is warning of a trend exhaustion.
A close below 125.70 could fuel a sell-off down to strong support area at around 115.80.
However, the 55 and 100daily Moving Averages are offering some support.
The uptrend is to be extended by a close above 132.50.
Weekly chart RSI divergence is also warning of uptrend exhaustion. However, the uptrend is intact until at close below 116.
Tesla TSLA is close to testing support and gap area at 240.70. RSI (and MACD) have been showing divergence for quite some time strongly indicating uptrend exhaustion.
Down trend is confirmed supported by RS below 40. Tesla is likely to break the close below the gap area i.e., close below 234.85.
To reverse the down trend a close above 273 is needed
Weekly Bearish Engulfing candle is strongly indicating a top and trend reversal. There is no RSI divergence however, but a trend and top and reversal can occur without it.
If Tesla is closing below 240.70 on the weekly chart medium-term uptrend has reversed. There could be a risk of a total collapse to around 208.
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