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Technical Update - Tesla and Microsoft uptrend losing steam. Cisco jumping higher
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
Summary: Tesla uptrend is losing power. Key support at 187.60 for a trend reversal.
Microsoft broken rising trendline and looks set to reverse trend
Cisco jumped higher after earnings and guidance but there could be further upside potential
Today's Saxo Market Call podcast.
Today's Market Quick Take from the Saxo Strategy Team
Tesla closed above the peak of the Evening Doji star pattern thus cancelling it out but buyers seem not to be able to follow through losing power just below the 200 daily Moving Average.
Traded volume has declined the past two weeks warning that the strength of the uptrend was weakening.
The higher close Wednesday wasn’t supported by higher RSI values and with the declining traded volume there is now divergence on those two indicators.
Heavy selling yesterday at the end of the session could be the signal of a reversal. However, a new down trend is not yet confirmed. A close below 187.60 will confirm a very short-term double top and reversal with potential move down to the Gap and support area at around 154.76-144.43. The 55 daily Moving Average currently at 157.25 and the 0.618 retracement at 146.06 will provide support.
If Tesla Bulls can manage to push the stock to close above 217.65 the uptrend is likely to be extended to resistance at around 237.40.
Today's Market Quick Take from the Saxo Strategy Team
Tesla closed above the peak of the Evening Doji star pattern thus cancelling it out but buyers seem not to be able to follow through losing power just below the 200 daily Moving Average.
Traded volume has declined the past two weeks warning that the strength of the uptrend was weakening.
The higher close Wednesday wasn’t supported by higher RSI values and with the declining traded volume there is now divergence on those two indicators.
Heavy selling yesterday at the end of the session could be the signal of a reversal. However, a new down trend is not yet confirmed. A close below 187.60 will confirm a very short-term double top and reversal with potential move down to the Gap and support area at around 154.76-144.43. The 55 daily Moving Average currently at 157.25 and the 0.618 retracement at 146.06 will provide support.
If Tesla Bulls can manage to push the stock to close above 217.65 the uptrend is likely to be extended to resistance at around 237.40.
Microsoft has broken below its short-term rising trendline and seems set for a move down to the 0.382 retracement and support at around 254.78. 200 daily Moving Average will provide some support. However, a close below 254.78 Microsoft has a confirmed downtrend with support at around 242.
Cisco has broken bullish out of its falling channel taking out December peak. RSI is above 60 and Bollinger bands are expanding indicating higher Cisco levels.
If Cisco doesn’t close the gap created yesterday there is upside to 57.21 – see weekly chart. Some resistance at around 53.40. A weekly close above 60 on RSI will confirm the bullish outlook.
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
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