Against the backdrop of the start of the corporate reporting period, the French stock index is trying to show growth. The day before, L’Oreal SA, Danone SA and Kering SA provided their reports. L’Oreal SA reported revenue of 9.06 billion euros, which was in line with the previous quarter and exceeded the forecast of 8.86 billion euros in revenue. Food concern Danone SA reported quarterly revenue of 6.24 billion euros, which exceeded the forecast of 6.2 billion euros and coincided with revenue in the previous quarter. Luxury goods maker Kering SA reported revenue of 4.96 billion euros, which beat the forecast of 4.63 billion euros.
Along with the stock market, the bond market continues to grow. The yield on 10-year French Treasuries increased by 0.47% and conservative 20-year ones increased by 0.03%. Traditionally, short-term bonds demonstrate the greatest growth: the yield of 9-month bonds increased by 4.57% compared to yesterday’s close.
The quotes of the asset are traded within the global downward channel, having reached the level of the resistance line the day before. Technical indicators are holding a local buy signal: the range of EMA fluctuations on the Alligator indicator has started 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: 6340, 5880 | Resistance levels: 6800, 7150
Raytheon Technologies Corporation is an American multinational aerospace and defense conglomerate headquartered in Waltham, Massachusetts. It is one of the largest aerospace, intelligence services providers, and defense manufacturers in the world by revenue and market capitalization.
The shares of Raytheon Technologies Corp., one of the largest US financial and industrial groups, are moving within a stable corrective trend near the level of 100.
On the daily chart, a narrow ascending channel is forming, within which the price once again failed to consolidate above the resistance line around 106 and returned to the channel, dropping to the support line at 99, coinciding with the initial correction level of 23.6% Fibonacci. The beginning of a global downward correction is possible only after the consolidation below the level.
Technical indicators signal the presence of a stable buy signal but do not rule out a downward correction: fast EMAs on the Alligator indicator are approaching the signal line, and the AO oscillator histogram is forming downward bars in the buying zone.
General Electric Co. stocks continue to trade within the mid-term downward channel. Over the past two weeks, the price has attempted to grow and reached 93.74, but then corrected downwards against the background of the statement by the head of the US Fed Jerome Powell about the need for a sharp adjustment of interest rates already at the May meeting of the regulator.
The growth of quotations of the trading instrument may resume if positive financial statements on activities for Q1 2022 are published on Tuesday. It should be noted that during the last four reporting quarters, management reported higher profits than experts expected. Positive dynamics is also possible in Q1 2022, as efforts to reduce the volume of debts, reduce costs and benefits from previously acquired assets will affect financial indicators. According to the estimates of the analytical company Zacks Investment Research, the income of General Electric Co. in the healthcare sector, may amount to 4,206B dollars, which is 2.4% less than the same indicator last year. The profit of the aviation sector may reach 5.896B dollars, which is 18.1% more than in the same period last year. Total earnings per share may amount to 0.23 dollars, and total revenue – to 17.17B dollars. In general, investors will be able to receive 3.16 dollars per share for the year.
In case of a breakdown of 89.06 (Murray [1/8]), the decline may continue to 87.50 (Murray [0/8]), 85.94 (Murray [-1/8]). The key level for the “bulls” is 91.40 (the middle line of the Bollinger Bands). Its breakout will provide growth to 93.75 (Murray [4/8]), 95.31 (Murray [5/8]). Technical indicators signal a decline: the Bollinger Bands and the Stochastic are reversing downwards, the MACD histogram is increasing in the negative zone.
Resistance levels: 91.40, 93.75, 95.31 | Support levels: 89.06, 87.50, 85.94
The shares of one of the largest banks and analytical agencies in the US, Bank of America Corp., are traded within a corrective trend around 37.
On the daily chart, the price is within a rare Symmetrical Channel pattern and the day before reached the global support level of 36.6, which many times acted as a strong support for the asset and was eventually tested by quotes just at the beginning of the formation of this figure.
On the four-hour chart, the instrument is falling within the second channel, which is directed downwards. After reaching the resistance line of 40, a clear reversal has formed and there are all signs of a likely continuation of the downtrend. This probability is confirmed by the readings of technical indicators: the range of EMA fluctuations on the Alligator indicator continues to expand in the direction of decline, and the histogram of the AO oscillator forms descending bars, being in the sell zone.
The leading index of the London Stock Exchange FTSE 100 is showing local corrective dynamics and is now at 7474.0.
Tomorrow, one of the largest components, HSBC Holdings Plc., and tobacco market leader, British American Tobacco Group, will publish their financial statements. From the British financial giant, analysts expect quarterly revenue to rise to 9.76 billion pounds, well above 8.89 billion in the previous period, but forecasts for the British American Tobacco Group are rather pessimistic: revenue is expected to fall to 12.67 billion pounds compared to 13.51 billion a quarter earlier.
One should also note the ongoing correction in the UK bond market, where 10-year bonds fell to 1.8465% from 2.0150% at the end of last week. The yield on 20-year conservative bonds corrected to 1.954%, which is well below the high of 2.128% set last Thursday
Index quotes are trading within the global Expanding Formation pattern. Technical indicators are in a buy signal state, which is rapidly weakening: the fluctuation range of the Alligator indicator EMAs is actively narrowing and the histogram of the AO oscillator is approaching the transition level.
Support levels: 7350, 6990 | Resistance levels: 7670, 7900
The leading index of the US economy, the S&P 500, is correcting downwards, trading around 4204. The period of corporate reporting continues, and this week is one of the most active: yesterday, the financial results were published by such market giants as Microsoft Corp., Alphabet Inc., and Visa Inc.
The American company providing services for conducting payment transactions Visa Inc. reported revenue of 7.19B dollars, up from 7.06B dollars a quarter earlier. Data from two other tech corporations disappointed traders: Microsoft Corp. reported revenue of 49.36B dollars, down from 51.73B dollars a quarter earlier, and earnings per share of 2.22 dollars, up from 2.48 dollars a quarter earlier. The owner of the Google search engine, Alphabet Inc., was able to demonstrate only 68.01B dollars in revenue, which is lower than 75.33B dollars a quarter earlier and inferior to analysts’ forecast of 68.08B dollars. Earnings per share were 24.62 dollars, down from 30.69 dollars.
Growth leaders include Sherwin-Williams Co. (+9.41%), Waste Management (+5.23%), and Whirlpool Corp. (+4.63%).
Among the decline leaders are Tesla Inc. (–12.18%), General Electric Co. (–10.34%), and Universal Health Services Inc. (–9.69%).
The index quotes are moving in a local sideways trend, declining towards the year’s low. Technical indicators maintain a global sell signal: fast EMAs on the Alligator indicator are below the signal line, and the AO oscillator histogram is trading in the sell zone, forming downward bars.
Resistance levels: 4281, 4590 | Support levels: 4137, 3900
Shares of one of the world’s leading retail holdings Johnson & Johnson are being corrected and traded at around 183.
On the daily chart of the asset, the price is holding above the resistance line of the global ascending channel, breaking the initial Fibonacci extension trend level of 61.8%, located at around 175.
On the four-hour time frame, it is clearly seen that the instrument will soon reach the the initial Fibonacci extension trend level of 100.0% in the area of 190.00, after which the strength of the uptrend will increase and the likelihood of continued growth will also increase significantly.
Technical indicators signal in favor of the development of upward dynamics: the range of EMA fluctuations on the Alligator indicator expands in the direction of growth, and the histogram of the AO oscillator is forming new ascending bars in the purchase zone.
The Dow Jones is correcting upwards and is trading at 33967
The active phase of the publication of corporate reports continues, and at the end of this week, the technology company Meta Platforms Inc. presented its data. Despite the loss of the Russian and Belarusian markets, the issuer managed to increase the number of active users to 1.96B from 1.93B a quarter earlier. However, statistics recorded a drop in quarterly revenue to 27.91B dollars from 33.67B dollars and net income from 9.50B dollars to 7.47B dollars in Q1 2022. The world’s largest chain of fast food restaurants McDonald’s Corp. reported an 11% increase in revenue over the same period. Earnings per share were 2.28 dollars, which even surpassed the successful previous quarter, when the figure was about 2.23 dollars.
As for the bond market, the yield on the popular 10-year bonds fell slightly and amounted to 2.820%, while the conservative 20-year bonds lost 1.02% and are now trading at a yield of 3.091%.
Quotes of the index continue to decline within a wide downward channel, approaching the support line. Technical indicators are holding a local sell signal: fast EMAs of the Alligator indicator began to actively expand the range of fluctuations in the direction of decline, and the histogram of the AO oscillator is forming new descending bars.
Support levels: 33200, 32320 | Resistance levels: 34230, 35340
On the daily chart, the development of the third wave of the higher level 3 has completed, in which wave (5) of 3 has formed, and the development of a downward correction as the fourth wave 4 continues. At the moment, wave (A) of 4 has formed, wave (B) of 4 has completed and wave (C) of 4 is developing, in which the first wave of the lower level 2 of (C) was formed.
If the assumption is correct, the price will fall to the levels of 148.43 - 127.03. The level of 170.35 is critical and stop-loss for this scenario.
Nasdaq 100, corporate reporting disappoints the market
Quotes of the US technology index Nasdaq 100 show a downtrend in the area of 12940.0, having overcome another annual low after the release of weak financial data of the largest components.
The most active day of the entire corporate reporting period was disappointing for investors, as such recognized leaders of the sector as the online trading platform Amazon.com Inc. and computer component designer Intel Corp. showed a negative trend. In particular, Amazon.com Inc. reported a drop in quarterly revenue to 116.44B dollars from 137.41B dollars, as well as the first quarter in seven years with a net loss of -7.56 dollars per share amid record inflation in the United States, which reached 40 years highs. Quotes of Intel Corp. are also actively declining after a drop in quarterly revenue to 18.35B dollars from 19.53B dollars recorded a quarter earlier. The company’s earnings per share fell to 0.87 dollars from 1.09 dollars in the previous period. Shares of Apple Inc. also show a downtrend: the issuer recorded revenue of 97.28B dollars in Q1 2022 compared to 123.95B dollars in Q4 2021.
Index quotes continue to form a global downward channel, approaching the support line. Technical indicators are in a stable sell signal state. The range of EMA fluctuations on the Alligator indicator is expanding towards the decline, and the AO oscillator histogram is trading in the negative area forming new descending bars.
Support levels: 12580, 11700 | Resistance levels: 13480, 15220
Corporate reporting data puts pressure on quotes.
S&P 500 is correcting down after the release of the financial results of the leading components and is now trading at 4173.
This week may continue the negative wave of reporting giants of the US corporate sector. The holding company controlled by Warren Buffett, Berkshire Hathaway Inc., reported revenue of 70.81B dollars, beating analysts’ forecast of 70.19B dollars, but earnings per share were 4.774K dollars, down from 4.901K dollars a quarter earlier.
Pfizer Inc., Advanced Micro Devices Inc. (AMD) and Starbucks Corp. will present their data today. Market participants expect from pharmaceutical giant Pfizer Inc. a quarterly revenue of 24.1B dollars, which could surpass the previous period’s figure of 23.84B dollars. AMD could also improve, posting a profit of 5.01B dollars from 4.83B dollars, while the global coffee market leader, Starbucks Corp., is likely to worsen its numbers (revenue could reach 7.62B dollars, which is below 8.05B dollars a quarter earlier).
The index quotes are trading in a global downtrend, falling towards the support line. Technical indicators maintain the global sell signal: the fast EMAs of the Alligator indicator are below the signal line, and the histogram of the AO oscillator is trading in the sell zone, forming descending bars.
Support levels: 4100, 3800 | Resistance levels: 4280, 4590
Even though it might be a bear week overall again the bulls will have a little say as usual
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Bank of America, the price may fall.
On the daily chart, the formation of the first wave of the higher level 1 has completed and a downward correction is developing as the second wave 2. At the moment, the formation of the wave (A) of 2 continues, in which the fifth wave of the lower level 5 of (A) develops.
If the assumption is right, the fall of the pair will continue to the levels of 32 - 26.32. The level of 40.3 is critical and stop-loss for this scenario.
The asset is in correction; the probability of fall is maintained.
On the daily chart, the development of the third wave of the higher level 3 was completed and the development of a downward correction as the wave 4 continues. At the moment there is a formation of the wave (A) of 4, which included the third wave of the lower level 3 of (A).
If the assumption is correct, after the wave 4 of (A) is complete, the decline of the price will continue to the levels of 101 - 83.18. The level of 144.05 is critical and stop-loss for this scenario.
On the daily chart, the fifth wave of the higher level (5) is developing, in which wave 3 of (5) appeared and the fourth wave 4 of (5) is developing. At the moment, wave a of 4 has formed, wave b of 4 has completed, and the formation of wave c of 4 has begun, in which the wave of the lower level (iii) of c is being completed.
If the assumption is right, the fall of the pair will continue to the levels of 144.62 - 131.35. The level of 192.89 is critical and stop-loss for this scenario.
The leading index of the Frankfurt Stock Exchange DAX 30 is trading at 14300. The German stock market shows a slight corrective growth after the publication of positive financial statements of the main components.
Earlier, the national postal service Deutsche Post AG presented its data, which reported revenue of 22.59B euros, which significantly exceeded the analysts’ forecast, which assumed a value of 20.54B euros. Earnings per share also exceeded preliminary market estimates of 0.9309 euros and amounted to 1.0800 euros. The statistics of the world’s largest automaker, Volkswagen AG, also turned out to be positive: quarterly revenue was recorded at 62.74B euros, exceeding the forecast of 61.55B euros. Earnings per share amounted to 13.05 euros, which is the highest since Q1 2020. Siemens AG’s medical equipment manufacturing division, Siemens Healthineers AG, reported revenue of 5.46B euros, improving both analysts’ forecast of 4.98B euros and the previous quarter’s figure of 5.07B euros. Earnings per share have become a record since 2018, amounting to 0.67 euros per share.
On the daily chart, the index is preparing to start working out the local Flag pattern. Technical indicators will soon reverse and give a signal for the start of purchases: the range of EMA fluctuations on the alligator indicator has begun to actively narrow, and the histogram of the AO oscillator is approaching the transition level, forming ascending bars.
Support levels: 13555, 12460 | Resistance levels: 14500, 15710
The leading index of the London Stock Exchange FTSE 100 demonstrates local corrective dynamics and is now at the level of 7487.0. As expected, after the Bank of England raised the interest rate from 0.75% to 1.00% at yesterday’s monetary policy meeting, the stock market of the United Kingdom moved to a decline, since adjusting the value is always a negative aspect for risky assets such as stocks.
As for the corporate segment itself, the presented financial statements turned out to be ambiguous. Thus, Royal Gold Inc., a company engaged in the sale of precious metals and royalties, reported revenue of 162.36M pounds, exceeding analysts’ preliminary estimates of 140.45M pounds, while earnings per share amounted to 0.99 pounds against the forecast of 0.86 pounds. Shell Oil and Gas Concern Plc recorded a 26% increase in net profit, despite the loss of 3.9B dollars after leaving the Russian market. Among the negative reports, another oil and gas giant, British Petroleum Plc, should be noted, which reported a drop in quarterly revenue to 49.26B pounds from 52.24B pounds. The final financial result was also affected by estimated losses of 25B dollars due to the loss of the Russian sales market.
The index quotes continue to trade within the framework of the global Broadening Formation pattern and after reaching the resistance line, they show a decline. Technical indicators remain in the state of a sell signal, which is still very weak: the range of EMA fluctuations on the alligator indicator is directed down, and the histogram of the AO oscillator is in the sales zone.
Support levels: 7361, 7020 | Resistance levels: 7670, 7900
The leading index of the US economy, the S&P 500, is correcting downwards, being under pressure from the upward dynamics in the bond market, and is now trading at 4083.5.
The publication period for corporate reports ends, and its results rather disappointed investors. Among the companies that presented their data at the end of last week, the main competitor of Tesla Inc., the American electric car manufacturer Lucid Group Inc. is worth noting. The issuer increased quarterly revenue to 57.68M dollars, which exceeds 26.39M dollars, received in the previous quarter, and 313K dollars in 2021. Earnings per share narrowly missed the positive zone, stopping at –0.05 dollars, which is much better than the loss of –0.64 dollars a quarter earlier. Positive dynamics develop due to the growing demand for the luxury model of the Lucid Air electric car. The company’s customers have already reserved more than 30K cars, which will bring the company revenue of about 2.9B dollars.
Serious pressure on risky assets is exerted by the situation in the domestic bond market. For example, the popular 10-year Treasury reached an all-time fall 2018 all-time high of 3.142%, rising from 2.950% in a week, while 20-year bonds are trading at a yield of 3.4606%, which is higher than the 3.2214% shown at the beginning of the month. Only annual bonds did not grow over the past week. Its yield is 2.106%.
The index quotes are traded in a global downward channel, falling towards the support line. Technical indicators hold a global sell signal: fast EMAs on the Alligator indicator are below the signal line, and the AO oscillator histogram is trading in the sell zone, forming down bars.
Resistance levels: 4280, 4590 | Support levels: 4000, 3800
Netflix, the price may fall.
On the daily chart, the wave A of the higher level formed, and a downward correction develops as the wave B. Now, the wave (А) of B has formed, the correction (B) of B has developed, and the wave (C) of B is forming, within which the development of the fifth wave of the lower level 5 of (C) has started.
If the assumption is correct, the price will fall to the levels of 132.95–80.22. In this scenario, critical stop loss level is 206.31.
On the daily chart, the third upward wave of the higher level (3) developed, and a downward correction forms as the fourth wave (4). Now, the wave C of (4) is developing, within which the fifth wave of the lower level v of C is developing.
If the assumption is correct, the price will fall to the levels of 2150.5 - 2034.7. In this scenario, critical stop loss level is 2465.74.
