Indices Updates by Solid ECN

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The leading index of the Australian economy, ASX 200, is strengthening, being near 7477.0. The Australian stock market is trading ambiguously due to a poor Friday report on economic stability and growth in the bond market.

Thus, the Reserve Bank of Australia announced the growing uncertainty regarding the development of the national economy, caused primarily by the continuing rise in inflation. Officials said they were closely monitoring the dynamics of household mortgage debt and lending and warned borrowers that they should be prepared for higher interest rates. According to department representatives, the country's financial system remains stable, and financial institutions are well-capitalized. However, inflation will continue to rise in the future, putting serious pressure on both borrowers and consumers.

The stock market is not allowed to fall by the bond market, which continues to grow actively. Today, the yield of popular 10-year bonds of Australia added 1.96%, while the rate of return on conservative 20-year bonds is 1.78%. Short-term assets show a more restrained trend: 1-year securities rose by 1.68%, and 2-year securities added 0.89%.

The price moves within the global Expanding formation pattern, approaching the resistance line. Technical indicators keep a stable buy signal: fast EMAs of the Alligator indicator are above the signal line, and the AO oscillator histogram is high in the buying zone.

Support levels: 7380, 6980. | Resistance levels: 7550, 7750​

 

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The tech-heavy Nasdaq 100 index declined more than 1% on Monday as US yields continue to rise, undermining high growth and tech sectors.
As measured by the Fibonacci retracement tool, the Nasdaq has erased nearly 50% of the rally from March lows to April highs. However, the critical resistance remains at the 200-day moving average, currently near 15,200 USD. Regarding the Ukraine war, White House national security adviser Jake Sullivan said on Sunday that Ukrainian forces could push back Russian troops successfully so that they were forced to retreat and regroup.

Bears pushed the Nasdaq below the 50-day moving average (the purple line) at 14,330 USD, changing the short-term outlook to bearish. As long as the index trades below the 50-day average, the next target for decline seems to be at 13,900 USD. If the index jumps above 14,330 USD, we might see a bullish reversal, targeting 14,630 USD in the initial reaction.

However, sentiment might stay bearish in the near future as the Fed seems ready to deliver more rate hikes than previously expected, likely crushing the high-debt and high-growth sectors, tech included.

 

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Snap Inc, the development of a global corrective trend​

In the stocks of Snap Inc., which owns the Snapchat messenger, there is a development of a global corrective trend, and at the moment the instrument is trading at around 35.00.

The issuer continues to modernize its business and on the eve announced the acquisition of the French startup NextMind, which is focused on augmented reality technologies. The company itself has been engaged in such developments for a long time on the basis of the Snap Lab division, and the acquisition of NextMind, which has already been able to attract more than 4.5M dollars in investments, is undoubtedly a positive step in development. The deal is estimated at about 13M dollars.

Analysts also assessed the detailed report on the company's expansion in emerging markets. Thus, the audience coverage in Mexico increased by 31%, in Italy – by 12%, in Brazil – by 9% and in Japan – by 2%. The largest markets are still the USA and India, which account for more than 2/3 of all subscribers.

The earnings report will be published on April 21, and, according to expectations, the indicator will remain at a level slightly above 1B dollars, which is a positive moment, given that the company managed to overcome this milestone only in the last two quarters.

The shares continue to trade in the global side channel, approaching the resistance line. Technical indicators hold a buy signal: the histogram of the AO oscillator is trading in a positive zone, forming ascending bars, and the range of fluctuations of the EMA of the alligator indicator is still directed upwards.

Resistance levels: 41.5, 49 | Support levels: 32.7, 27.8​

 

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The Dow Jones is correcting down and trading at $34,180.
The corporate reporting season starts this week with the publication of data by companies in the banking and insurance sectors. Despite the fact that the stock market is trading at its highs, strong financial results should not be expected during this period, and if the figures are higher than predicted, this will probably not affect the long-term plans of issuers.

The bond market is also showing historical growth, so a serious influx of money into stocks is not expected. The yield on popular 10-year US Treasuries updated the record of 2019 and amounted to 2.826%, while conservative 20-year bonds overcame the figure of 3.040% the day before. Short-term bonds are the fastest rising, adding 3.85% and 5.67% for 3-month and 6-month notes, respectively.

The index quotes are traded inside the descending channel, having reached the resistance line and reversed from it. Technical indicators are about to change direction and give a sell signal: fast EMAs on the Alligator indicator are approaching the signal line, and the AO oscillator histogram is actively forming downward bars.

Support levels: 33,860, 32,550 | Resistance levels: 34,820, 35,870​

 

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The positive dynamics are developing against the background of reports about the acquisition by the London company ReViral Ltd. corporation, and this transaction is estimated at 525M dollars. Thus, the pharmaceutical giant will access several new experimental antiviral drugs. Note that this is the second acquisition of Pfizer Inc. in less than six months. Arena Pharmaceuticals Inc. was acquired in December. The deal amounted to 6.7B dollars.

A positive signal for the asset was the appointment of David Denton as CFO, who previously held a similar position at CVS Pharmacy Inc. and has extensive experience in mergers and acquisitions. Experts believe the new appointment indicates Pfizer Inc.'s forthcoming business expansion as the issuer aims to reach 25B dollars in revenue by 2030.

The price is going down, but to develop a serious correction, the breakdown of 53.12 (Murrey [6/8], the middle line of Bollinger Bands) is necessary. In this case, quotes will be able to drop to 50.00 (Murrey [4/8]), 48.44 (Murrey [5/8]). The key "bullish" level of 56.25 (Murrey [8/8]). Its breakout allows a rise to 59.38 (Murrey [+2/8]) and 61.50 (December highs area).

Technical indicators are signaling the continuation of the uptrend: Bollinger bands are directed upwards, the MACD histogram is increasing in the positive zone, but Stochastic is preparing to leave the overbought zone, which does not exclude a correction.

Resistance levels: 56.25, 59.38, 61.5 | Support levels: 53.12, 50, 48.44​

 

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DuPont De Nemours Inc, the price is approaching the lows of the year​

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The stocks of one of the largest chemical companies in the world, DuPont De Nemours Inc., continue to be in a corrective downward trend, trading at 68.00.

DuPont De Nemours Inc. is gradually approaching its first quarterly report in 2022, which is scheduled for May 5. Despite the gradual increase in profitability indicators in previous periods, analysts do not expect serious results from the company. According to preliminary forecasts, earnings per share will be about 0.66 dollars, which is a decrease of -27.47% compared to the same indicator a year earlier. In general, this year's profit is expected to be 3.39 dollars per share, which is 21.16% lower than in 2021. The forecast for annual revenue is at the level of 16.3B dollars, which is also 2.12% lower than last year's value.

The last quarterly payment to asset holders took place on March 15, when investors were sent 0.33 dollars per share, and the yield was 1.75%. The date and amount of the new dividends have not yet been set, they will be announced immediately after the publication of the Q1 reports.

The correction formation continues to develop on the global chart of the asset, within which the price is approaching the lows of the year. Technical indicators have reversed and issued a new sell signal: the range of EMA fluctuations on the alligator indicator is expanding in the direction of decline, and the histogram of the AO oscillator forms new bars with a downward trend, being in the sales zone.

Resistance levels: 71, 78 | Support levels: 67.6, 60​

 

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Cisco Systems Inc, technical analysis​

Shares of Cisco Systems Inc., the largest manufacturer, and supplier of network equipment for large holdings and telecommunications companies, continue to correct, trading around 53.

On the daily chart of the asset, the implementation of the local Flag pattern of continuation of the trend, which has been forming since the beginning of the current year, has begun. A few sessions ago, the support line at 55 was broken, which was the necessary confirmation to start a downtrend.

The four-hour chart shows that if the pattern is implemented according to the classic scenario, the likely support for the price will be the initial trend of 61.8% Fibonacci around 50 and the basic trend of 100% Fibonacci around 46.3. Using the entry level as a trade entry point and the base level as a target is the optimal solution at the moment.

Technical indicators confirm a possible decline: indicator Alligator's EMA fluctuations range expands downwards, and the AO oscillator histogram moved into the sell zone, forming a group of down bars.

 

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Visa Inc, the price may fall.​

On the daily chart, the third wave of the higher level (3) developed, and a downward correction forms as the fourth wave (4). Now, the wave A of (4) is developing, within which the third wave of the lower level iii of А has formed, and the wave iv of A has developed.

If the assumption is correct, the price will fall to the levels of 178.37 - 135.65. In this scenario, critical stop loss level is 230.11.​

 

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The FTSE 100 index shows a local corrective trend, trading at 7574.0.​

Corporate news is beginning to come to the fore in stock markets around the world, as the period for publishing the financial results of index component companies kicks off next week. The budget carrier EasyJet Plc. reported that the revenue forecast suggests a loss of around 500 million pounds due to low overall bookings. In turn, the shares of the online retailer ASOS Plc. strengthened marginally after maintaining the company's strong growth forecast for 2022, despite an expected drop in first-half earnings due to supply issues.

In addition, the continued growth in the UK bond market should be noted, where 10-year treasuries renewed another high, reaching 1.8080%, and the yield on 20-year conservative bonds increased to 2.021%, which significantly exceeds 1.741% at the beginning of the month.

The growth leaders in the index are British Petroleum Plc. (+2.40%), Fresnillo Plc. (+2.30%), JD Sports Fashion Plc. (+2.18%). Among the leaders of the decline are Rolls-Royce Holdings Plc. (-5.48%), Land Securities Group Plc. (-4.53%), Ocado Group Plc. (-4.32%).​

Index quotes are trading within the global Expanding Formation pattern. Technical indicators are in a stable buy signal state: the range of EMA fluctuations on the Alligator indicator stays wide and the histogram of the AO oscillator is trading high in the purchase zone.

Support levels: 7500, 7232 | Resistance levels: 7673, 7900​

 

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The price of stocks of the American online retail company eBay Inc. continues to correct downwards and is located around 54.

At the recent Investor Day, the issuer provided a development project for the coming years, according to which annual revenue growth is expected to range from 5% to 8% in 2022, from 3% to 4% in 2023, and about 5% in 2024 fiscal year. The projected income growth for 2022 ranges from 0% to 3%, in 2023 – from 5% to 6%, and in 2024 – in the range of 7-8%. The amount of earnings per share for 2022 is in the range of 4.20-4.40 dollars. In 2023, this indicator is projected to increase by 10% from 2022, and by another 15% in 2024.

The last payment of the updated increased dividends of 0.22 dollars per share took place on March 18, and then the yield was 1.65%. The date of the upcoming payment has not yet been set, and it is likely that it will be determined after the publication of the report for Q1, which is scheduled for April 27.

Stocks continue to trade above the resistance line of the global descending channel in an attempt to start a new trend. The range of EMA fluctuations on the alligator indicator continues to be quite narrow, and the histogram of the AO oscillator forms new bars, being close to the transition level.

Resistance levels: 56.2, 60.5 | Support levels: 52.7, 50​

 

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The shares of Tesla Inc., the world's leading manufacturer of electric cars, continue their global correction, trading at 1022.

On the daily chart, the trading instrument is within the global Expanding formation pattern, which began to implement in October 2021. At the moment, the price has completely formed its sixth wave, having reached the resistance line at 1146, and reversed downwards.

On the 4-hour chart, there are signs of a new downward wave, with the target at the support line of the pattern around 760. The readings of technical indicators also confirm the likely continuation of the decline: fast EMAs on the Alligator indicator are actively approaching the signal line, and the AO oscillator histogram is forming bars with a downward trend in the buying zone.

 

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General Electric, technical analysis​

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The global sideways correction in the shares of General Electric Co., an American multi-industry corporation, is strengthening, and the instrument is currently trading just below 91.

On the daily chart of the asset, a wide downwards channel is forming, inside which the price failed to break the resistance line at 96 again and reversed downwards.

On the four-hour chart, quotes are moving towards the support line, being in the middle of the range. Now, the main target is the channel's support line, located around 82. The readings of technical indicators also confirm the high probability of a possible decline: fast EMAs on the Alligator indicator are below the signal line, and the AO oscillator histogram has moved into the sell zone and is forming downward bars.​

 

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Against the backdrop of the start of the corporate reporting period, corporate news comes to the fore for stock indices. ArcelorMittal SA announced that it intends to acquire a majority stake in the Austrian steel company Voestalpine AG. The preliminary amount of the deal is estimated at 1 billion dollars. The day before, Hermes International SA published its financial results, according to which the quarterly revenue exceeded 3.10 billion euros, and the growth compared to the previous quarter was 33%, thanks to an increase in sales in all segments.

The rally that began in the French bond market in March of this year is continuing now, with popular 10-year bonds yielding 1.334%, up from 0.350% in early March, and conservative 20-year bonds hitting 1.628%, the last time observed at the beginning of 2017.
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The quotes of the asset are traded as part of a global downtrend, rising in the direction of the resistance line. Technical indicators are holding a local buy signal: the range of EMA fluctuations on the Alligator indicator is about to start expanding in the direction of growth, and the histogram of the AO oscillator is trading in the purchase zone while forming local ascending bars.

Support levels: 6420, 5880 | Resistance levels: 6800, 7150​

 

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The corporate reporting period in Japan started with the publication of financial results of real estate companies. So, the investment company Daiwa House REIT Investment Corp., Ltd. showed quite strong results: revenue was recorded at around 30.26B yen, surpassing 29.57B yen in the previous quarter. In turn, Mitsubishi Estate Logistics REIT Investment Corp. reported revenue of 5.03B yen, which was also higher than the 4.95B yen shown in the previous quarter. LaSalle Logiport REIT showed revenue of 10.59B yen, which was better than the projected 10.55B yen.

In the domestic bond market, the situation began to stabilize after the global downtrend changed last week. Thus, the yield on 10-year Japanese treasuries lost 1.26% relative to Friday's close, while conservative 20-year bonds rose by 2.19%, and global 30-year bonds — by 3.11%.

On the global chart of the asset, the price remains within a wide descending channel, moving in the direction of the resistance line. Technical indicators are in a state of uncertainty: the histogram of the AO oscillator is close to the transition level, forming descending bars, and the fast EMAs on the alligator indicator are below the signal line.

Support levels: 26175, 24681 | Resistance levels: 27386, 28506​

 

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The shares of Snap Inc, the US company that owns the Snapchat messenger, are trading at 32.

On the daily chart of the asset, a global downtrend continues to form, at the lows of which the price is clamped inside the Triangle pattern. There is not much time left before the figure's implementation, and if the quotes break the February low of 28, the downward scenario will receive the necessary confirmation.

The four-hour chart shows that a full-fledged correction has not yet begun, as the instrument has not consolidated above the initial Fibonacci 23.6% correction level of 41. At the moment, the upward dynamics seem unlikely since technical indicators confirm the increased activity of the "bears": fast EMAs on the Alligator indicator crossed the signal line downwards, and the AO oscillator histogram consolidated below the transition level, continuing to form downward bars.​

 

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The stock markets of the EU countries continue to trade in a local downtrend against the background of the reduction by the World Bank of the world economic growth forecast for 2022 to 3.2%. The main reasons for the correction of the indicator are losses caused by the development of the military conflict in Ukraine, quarantine restrictions due to the spread of the coronavirus pandemic, as well as a significant increase in inflation. These factors can lead to an increase in the level of poverty in the world due to sudden spikes in prices for energy, fertilizers and food, and the policy of adjusting interest rates is likely to exacerbate the inequality of residents of different territories. The previous forecast for global GDP growth was 4.1%, but due to the situation in Ukraine, it was also lowered. Meanwhile, the estimated global economy in 2021 grew by 5.5%, showing the highest post-recession pace in 80 years.

At the moment, the situation in the German domestic bond market is coming to the fore again, where growth continues. Thus, 10-year debt stocks reached a yield of 0.9240%, despite the fact that at the beginning of the month it was only 0.5170%. In turn, the yield of conservative 20-year bonds exceeded the 1% mark for the first time since 2018, and is now at 1.014%, having risen from 0.556% at the beginning of the month.

On the global chart of the asset, the price is trading as part of a correction to the previous decline. Technical indicators are reversing again, and are ready to issue a signal to start purchases: the range of EMA fluctuations on the alligator indicator is actively narrowing, and the histogram of the AO oscillator has moved into the buying zone, forming the first ascending bar.

Support levels: 13883, 12600 | Resistance levels: 14550, 15420​

 

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On the daily chart, the first wave of the higher level (1) of C formed, and a correction developed as the second wave (2) of C. Now, the wave C of (2) has formed and the development of the wave (3) has started, within which the first wave of the lower level 1 of (3) is forming.

If the assumption is correct, the price will grow to the levels of 242.7 - 260. In this scenario, critical stop loss level is 173.09.

 

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The Dow Jones is correcting upwards and is trading at 35330.

The first week of corporate reporting showed that investors are redirecting their capital from the communications sector to the real one after companies in this segment began to publish disappointing financial results one after another. The day before, Netflix Inc. lost more than 35% of value after the company announced a possible decrease in the number of active subscribers by 2 million earlier this year.

In turn, the reports of Tesla Inc. and Procter & Gamble Co. supported the market. Electric car manufacturer Tesla Inc. reported revenue of 18.76 billion dollars, up from 17.72 billion dollars a quarter earlier, and EPS hit 3.22 dollars for the first time in history. Industrial group Procter & Gamble Co. also posted quarterly revenue growth of 19.38 billion dollars versus a forecast of 18.72 billion dollars, with earnings per share of 1.33 dollars, higher than the expected 1.3 dollars.

The index quotes made an attempt to overcome the resistance line and leave the long downward channel. Technical indicators issued a new buy signal: fast EMAs of the Alligator indicator began to actively expand the range of fluctuations in the direction of growth, and the histogram of the AO oscillator is forming new rising bars.

Support levels: 34150, 32560 | Resistance levels: 35680, 36930​

 

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On the daily chart, the fifth wave of the higher level (5) develops, within which the wave 3 of (5) formed, and the fourth wave 4 of (5) develops. Now, the wave a of 4 has formed, the wave b of 4 has ended, and the development of wave c of 4 has started, within which the wave of the lower level (ii) of c is ending.

If the assumption is correct, the price will fall to the levels of 144.62 - 131.35. In this scenario, critical stop loss level is 194.7.

 

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Caterpillar, upward trading dynamics​

The shares of Caterpillar Inc., one of the world's leading construction and mining equipment manufacturers, traded in an uptrend, reaching 235.00 after analysts at Jefferies Group LLC upgraded its rating to Buy and Hold and its target price from 215 to 260 dollars. The very next day, Wells Fargo & Co. added the company's shares to the high-potential list while maintaining a Neutral rating and raising its target price from 220 to 231 dollars.

Q1 financial report will be published on April 28, and according to analysts' forecasts, revenue could reach 13.24B dollars, which is in line with the previous period. Earnings per share are expected to be around 2.6 dollars, down slightly from 2.69 dollars a quarter earlier.

Yesterday, the company's board of directors decided to keep the dividend at 1.11 dollars and set the next payment date for May 20, 2022. The shareholder register will be closed on April 25, and those wishing to receive a quarterly yield of 1.89% are advised to hurry with the placement of the issuer's securities in their portfolios.​

The company's shares are moving within the global sideways channel near the resistance line and are trying to consolidate higher. Technical indicators maintain a stable buy signal: fast EMAs on the Alligator indicator are above the signal line, and the AO oscillator histogram trades in the buy zone.

Resistance levels: 238, 255 | Support levels: 230, 213​