Indices Updates by Solid ECN

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Nasdaq 100, the influx of investors into the shares continues

The Nasdaq 100 index shows an uptrend, being at 14665. The US stock market continues to be supported locally by an increase in the number of retail investors trying to diversify their portfolios by directing their capital to assets that have lost the most value in order to escape high inflation.

Netflix Inc. announced a deal to acquire mobile game maker Boss Fight Entertainment as part of the service's strategy to create game content. It is worth noting that there is no information yet on which platforms the development will be carried out for, but experts note that the studio will not be re-profiled and will focus on mobile platforms. The details of the transaction are not disclosed. Earlier in March, Netflix Inc. announced the acquisition of Finnish mobile game developer Next Games for 72 million dollars.

Additional support for quotes of stock indices is provided by the bond market, which has been showing local growth since the opening of trading this week: popular 10-year US Treasuries added 2.48%, 20-year bonds rose by 1.54%, and short-term 3-month bonds were up 6.15% after Friday's close.

The index quotes have left the limits of the narrow downward channel and, having formed a full-fledged reversal, continue to grow. The technical indicators are in the buy signal they gave last week: the range of EMA fluctuations on the Alligator indicator is expanding in the direction of growth and the histogram of the AO oscillator is trading in the buy zone and forming ascending bars.

Support levels
: 14410, 13020.
Resistance levels: 15070, 16410.​

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Google, the price may grow.

On the daily chart, the upward third wave of the higher level (3) develops, within which the wave 3 of (3) formed. Now, a downward correction has developed as the fourth wave 4 of (3), and the formation of the fifth wave 5 of (3) has started.

If the assumption is correct, the price will grow to the levels of 3030 - 3300. In this scenario, critical stop loss level is 2522.

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Tesla Inc, technical analysis

The shares of Tesla Inc., the world's leading manufacturer of electric vehicles and energy storage solutions, are correcting around 1090.

On the daily chart, the instrument has left the wide downwards channel that began in October 2021. The quotes broke the resistance line around 981, forming a price gap. If we turn to the history of this chart, the broken channel is most likely a Flag trend continuation pattern. According to the theory of its implementation, the initial price move can be up to 100% of its width (up to 2K points).

On the four-hour chart, the rate has reached the previous local high at 1100 and is ready to break it. The readings of technical indicators also confirm the likely continuation of the growth: fast EMAs on the Alligator indicator crossed the signal line upwards, and the AO oscillator histogram moved into the buy zone, forming rising bars.

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S&P 500, growth at the back of correction in the bond market​

The S&P 500 index is correcting up against the backdrop of growth in the bond market, trading at around 4587. In the corporate segment, it is worth noting the increased activity in the shares of electric car manufacturer Tesla Inc. The company said it plans to seek permission from its shareholders for an additional share split in the form of dividends ranging from 2:1 to 3:1. The last time such a split was held in August 2020, when each shareholder received additional four securities for one already in hand.

The bond market continues active growth, which was clearly confirmed by yesterday's trading. The yield on 2-year US Treasury notes was fixed at 2.365%, well up from 1.553% at the last placement, the rate on 6-month notes was 1.050% versus 0.870% a month earlier, and the yield on 5-year treasury bills was fixed at 2.543% from 1.880% on the previous placement.

The index quotes are traded in a local uptrend, having overcome the resistance line of the descending channel the day before. Technical indicators have already reversed and issued a new buy signal: fast EMAs on the Alligator indicator crossed the signal line from below and the AO oscillator histogram moved into the buy zone, continuing to form ascending bars above the zero level.

Support levels
: 4510, 4278.
Resistance levels: 4630, 4800.​

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Mastercard, the price may fall.​

On the daily chart, the development of the third wave of the higher level (3) ends, and a downward correction started to form as the fourth wave (4). Now, the wave and of (4) is forming, within which the first wave of the lower level i of А has formed, and a local correction is ending to develop as the wave ii of А.

If the assumption is correct, after the end of the correction, the price will fall to the levels of 256.65 - 211.4. In this scenario, critical stop loss level is 401.46.

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DAX 30, German bond market is actively growing


European stock markets ended yesterday's trading in the "green" zone after the head of the Russian delegation, Vladimir Medinsky, said that the next round of negotiations with representatives of Ukraine was constructive, and official Moscow is ready to take steps to de-escalate the conflict, which relate to a drastic reduction of hostilities in the Kyiv and Chernihiv directions. Market participants took these statements positively, hoping for a speedy settlement of the situation on Ukrainian territory.

In addition, the DAX 30 quotes are supported by the German bond market, which continues to rise and has been at highs since 2018. Thus, according to the results of yesterday's trading, the yield on 10-year stocks was 0.6385%, and the rate on conservative 20-year debt notes was fixed at 0.6490%, while six-month bonds are actively approaching zero yield, trading at a rate of -0.6230%.

On the global chart of the asset, the price continues to trade within the correction to the previous decline. Technical indicators reversed and gave a signal for the start of purchases: the range of EMA fluctuations on the alligator indicator began to expand in the direction of growth, and the histogram of the AO oscillator moved into the buying zone.
Resistance levels
: 15000, 16250 | Support levels: 14470, 13480

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Caterpillar Inc, growth potential remains


The stocks of Caterpillar Inc. have been strengthening since the end of February, hitting last week's two-month highs around 225.90. The asset did not experience strong pressure from the negative consequences of the Ukrainian crisis and retained growth potential after the suspension of the corporation's activities in Russia, which brought up to 8% of annual revenue. Moreover, the development of hostilities may positively affect the issuer's profit since the company has a division for the production of defense orders. The United States and several European countries are seriously planning to expand allocations for these purposes. Yesterday, the head of the White House, Joe Biden, presented to Congress a budget plan for the next fiscal year in the amount of 5.79T dollars, which has a record military component of 813B.

Another factor supporting quotes is the US administration's infrastructure programs. According to officials from the national Department of Transportation, the plan is to allocate 2.9B dollars in grants for state and local infrastructure projects, such as expanding and repairing highways, bridges, ports and upgrading public transport. Their implementation will require the involvement of construction equipment and contribute to the sales growth of Caterpillar Inc. products.

The key "bullish" level is 225. Its breakout allows growth to 237.5) and 244.05. The consolidation below 212.50 may lead to a price decrease to the area of 200, 184.30 (Fibonacci correction 38.2%). In general, the indicators reflect the continuation of the upward trend: Bollinger bands are directed upwards, Stochastic tries to reverse upwards, and the MACD histogram is stable in the positive zone.

Resistance levels
: 225.00, 237.50, 244.05 | Support levels: 212.5, 200, 184.3​

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Amazon Inc, the price may grow.​

On the daily chart, the third upward wave of the higher level (3) developed, and a downward correction developed as the fourth wave (4). Now, the fifth wave (5) has started to form, within which the first wave of the lower level 1 of (5) has formed.

if the assumption is correct, after the end of the local correction 2 of (5), the Amazon price will grow to the levels of 3759 - 4000. In this scenario, critical stop loss level is 2665.

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FTSE 100, UK stock market is strengthening​

The UK stock market continues to try to return to the levels of annual highs that were recorded in early February 2022. In general, everything is quite stable in the corporate segment, except for the fact that yesterday S4 Capital Plc., which provides advertising services, once again postponed the publication date of the financial year 2022, this time due to problems with the audit service. This served as a catalyst for a mass sale of the issuer's shares, after which the quotes lost 36% in value.

In addition, it should be noted that the ongoing period of stabilization in the UK bond market, where 10-year bonds somewhat lost in yield, dropping to 1.668%. 20-year conservative bonds fell to 1.879%, which is slightly lower than 1.957% at the end of last week. In general, the consolidation of the debt market may be a leading signal for the start of a large-scale correction in the stock market.
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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 expands in the direction of growth, and the histogram of the AO oscillator is forming new ascending bars in the purchase zone.

Support levels: 7455, 7200 | Resistance levels: 7645, 7800.​

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Pfizer Inc, upward trading dynamics​

The corporation has completely closed the deal to buy the American pharmaceutical company Arena Pharmaceuticals Inc. for 6.7B dollars. The main reason for the new acquisition is the receipt by the issuer of Arena Pharmaceuticals Inc.'s development in the field of gastroenterological drugs. According to preliminary estimates, the financial component of the new partnership will be included in the next report, which will be published on May 3.

Analysts forecast a continuation of a stable increase in profit within the limits of 24.89B dollars, which significantly exceeds the 23.84B shown a quarter earlier. Earnings per share are expected to be around $1.6, which could be the highest in the company's history. On March 4, the last payment of quarterly dividends took place, which was increased to $0.4. The Board of Directors will discuss the date and amount of upcoming payments yesterday, the publication of the May report.
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The asset moves in a global corrective trend, pinching within the local Triangle pattern. Technical indicators are in the state of a global buy signal and are working out the local correction: fast EMAs of the Alligator indicator are moving above the signal line, and the AO oscillator histogram is trading above the transition level, forming downward bars.

Resistance levels: 54.5, 59 | Support levels: 51, 45.5​
 

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Dow Jones, the US stock market is preparing for a new decline​

The US stock market is declining again, the reason for which was the technology sector, whose shares are seriously getting cheaper. Thus, Advanced Micro Devices Inc. stocks lost more than 5.6% due to the negative forecast of Barclays experts and the change of the recommendation to negative. In turn, the quotes of HP Inc. and Dell Technologies Inc. are losing 7.6% and 7.4%, respectively, after Morgan Stanley analysts lowered their forecast for the purchase of shares of these companies.

The US bond market is showing local growth. Thus, the yield rate on 10-year US Treasuries increased by 2.62% and by 1.90% on conservative 20-year securities. Short-term bonds are also rising. The rate on annual treasury securities increased by 1.77%, and on 6-month — by 3.50%.

At the moment, there is not a single company showing growth in the index, and among the least losing in price are Caterpillar Inc. (-0.12%), Amgen Inc. (-0.31%), Coca-Cola Co. (-0.34%), Merck&Co. (-0.42%).

The leaders of the decline are Walgreens Boots Inc. (-5.67%), Intel Corp. (-3.71%), JPMorgan Chase & Co. (-3.00%).
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The index quotes continue to trade inside the descending channel, having reached the resistance line the day before. Technical indicators are ready to reverse and issue a sell signal: the fast EMA of the alligator indicator began to actively approach the signal line, and the histogram of the AO oscillator formed the first descending bar.

Support levels: 34327, 32540 | Resistance levels: 35260, 36410​
 

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Walmart Inc, general overview​

The stocks of the American company that manages the world's largest wholesale and retail chain, Walmart Inc., are trading at 149.

Earlier, it was announced that it intended to hire an additional 50K employees in the USA in the current quarter, which could put serious pressure on profitability, since the company pays hourly wages, which have increased by more than 5.5% since the beginning of 2022, and the growth trend continues. According to preliminary estimates, labor costs may increase by 15% in 2022, which will negatively affect the indicators.

As for the dividends, the next payment is scheduled for April 4, when investors will receive 0.56 dollars per share. The closure of the registry has already taken place on March 17. It was also reported that the annual shareholders' meeting will be held on June 1, 2022, and it may consider further raising the amount of dividends to 2.30 dollars per share for the year.

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The asset continues to move within the global corridor, which shows signs of local decline. After reaching the resistance line, the price is preparing to start forming a reversal. Technical indicators still continue to hold the buy signal: the histogram of the AO oscillator is trading in the buy zone, and the fast EMA on the alligator indicator is above the signal line.

Resistance levels: 151, 160 | Support levels: 147, 135.​
 

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Visa Inc technical analysis​

The shares of Visa Inc, America's largest multinational payment services company, are trading at 225. On the daily chart of the asset, a global Expanding formation pattern is developing, within which the fifth wave is forming, directed towards the resistance line around 256.

On the four-hour chart, the instrument has already broken the resistance line of the global downtrend at 213 and confidently consolidated above it. It indicates a high probability of continued growth of quotations if they break the local year's high, around 235.00. At the moment, indicator Alligator's EMA fluctuations range is expanding in the direction of growth, and the histogram of the AO oscillator is trading in the buying zone.​

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Adobe Inc, the decline in the horizontal range may resume​


Adobe Inc. stocks have been trading in a downtrend since November last year, but the price has spent the last two months in a sideways range of 468.75-406.25 (Murray [3/8]-[1/8]), which was caused by increasing geopolitical uncertainty due to the start of a special military operation in Ukraine.

In early March, the company announced the termination of sales of new products and services in Russia and Belarus, and later the management of Adobe Inc. lowered the forecast of profit growth for the 2022 fiscal year by 87M dollars, to 4.34B dollars. Analysts believe that the fighting will lead to the termination of the implementation of the company's developments in the European region as a whole, and not only in countries that have fallen under sanctions, which explains the likely drop in profits. Nevertheless, the current financial performance of the company looks encouraging, which constrains the decline in quotations. In particular, in Q1 2022, the issuer's net profit amounted to 1.266B dollars, which is higher than in the same period a year earlier, while revenue was fixed at 4.36B dollars, an increase of 9% compared to last year.​

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Support and resistance
Technically, the price rose to the level of 468.75 (Murray [3/8]), but it could not break through it and began to decline, the targets of which are 437.5 (Murray [2/8], the middle line of the Bollinger Bands) and 406.25 (Murray [1/8], the lower line of the Bollinger Bands). If the asset consolidates above 468.75 and the middle line of the Bollinger Bands (475.00), the upward dynamics may continue to the levels of 500.00 (Murray [4/8]) and 531.25 (Murray [5/8]).

Technical indicators do not give a single signal: the Bollinger Bands are directed horizontally, the Stochastic reverses down from the overbought zone, but the MACD histogram decreases in the negative zone.

Resistance levels: 475, 500, 531.25 | Support levels: 437.5, 406.25.​
 

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PayPal Holdings, the price may grow.​

On the daily chart, the upward wave of the higher level А formed, and a downward correction develops as the wave B. Now, the wave (А) of B has formed, and an upward correction of the lower level has started to develop as the wave (B) of B.

If the assumption is correct, the price will grow to the levels of 199.6 - 224. In this scenario, critical stop loss level is 91.

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CAC 40, EU markets are trying to recover​

The French bond market, which is trading in different directions, continues to have a key influence on the dynamics of the indices. Yields on 10-year bonds are down 0.45% and conservative 20-year bonds are up 0.39%, while short-term half-year bonds are down 1.16% and 3-year bonds are down 5.17%.

Meanwhile, in the corporate segment, the fundamental background is not too positive. Sodexo SA, an office services company, confirmed that its key financials forecast will remain at the lower end of the target range, causing the issuer's shares to fall more than 11%.

On Friday, May 6, the Euroapi division, spun off from the pharmaceutical giant Sanofi SA, will start trading on the Paris Stock Exchange.
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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 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: 6533, 5880 | Resistance levels: 6800, 7320​
 

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S&P 500, the US market is correcting​


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The US stock market continues to evaluate the recent revision of financial forecasts from leading analytical agencies. The day before, analysts at UBS Group AG raised the target price of Meta Platforms Inc. shares for Q2 2022 from 280 to 300 dollars. In turn, Chevron Corp., according to UBS Group AG estimates, will rise from 150 to 192 dollars. Prior to this, Goldman Sachs Group analysts also raised their forecast for the issuer's shares.

The US bond market is currently experiencing active growth: the rate of return on 10-year Treasury bonds rises by 2.44% and by 1.89% on conservative 20-year ones. More dynamic growth is traditionally demonstrated by short-term assets: annual bonds grow by 2.55%, and 6-month bonds rise by 4.26%.

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The index quotes are traded in a local uptrend, having overcome the resistance line of the lateral channel the day before. Technical indicators are holding a local buy signal: fast EMAs on the Alligator indicator are above the signal line, and the AO oscillator histogram is in the buy zone.

Support levels: 4470.0, 4216 | Resistance levels: 4630, 4800​
 

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The price is supported by two main factors: a positive report on the supply of new products to the market and the upcoming stock split. In Q1 2022, the company delivered a little more than 310K electric vehicles to car dealerships, which is a record high, but falls short of the experts' forecast of 317K. Probably, the pressure on the production and supply of products was exerted by a new outbreak of coronavirus, because of which the Chinese authorities were forced to quarantine Shanghai, and the factory located in the city temporarily stopped working. In general, the company's prospects look positive. It is assumed that production and sales will continue to grow as the increase in gasoline prices stimulates global demand for electric vehicles. Earlier, the management of Tesla Inc. announced the upcoming stock split – the second since the company went public in 2010. It is predicted that instead of cash dividends, shareholders will receive new shares. The split ratio will be announced later at the annual meeting.

Nevertheless, remaining within the uptrend, today the price of Tesla Inc. stocks came under pressure caused by the possibility of new legal claims against the head of the company, Elon Musk, from the US Securities and Exchange Commission (SEC). Observers believe that Musk did not notify the regulator about the purchase of 9.2% of Twitter shares in due time, which violated the law and may now be subject to fines.

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The price is testing the 1125.00 mark (Murray [+1/8]), consolidation above which will cause continued growth to 1180.00, 1250.00 (Murray [+2/8]). A breakdown of the level of 1033.70 (Fibo retracement 61.8%) will give the prospect of a decline to 970.00 (Fibo retracement 50.0%, the middle line of the Bollinger Bands), 907.50 (Fibo retracement 38.2%), however, continued price growth looks preferable, since the Bollinger Bands are directed upwards, and the MACD histogram is growing in the positive zone.

Resistance levels: 1125, 1180, 1250 | Support levels: 1033.7, 970, 907.5​
 

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European stock markets are again in the "red" zone under the pressure of weak macroeconomic reporting. The volume of Industrial Orders in Germany in February decreased by 2.2% after an increase of 2.3% a month earlier. Among the main reasons for the negative dynamics is the fall in external demand from other eurozone states.

In the corporate segment, the largest automaker Volkswagen AG VZO announced plans to reduce the supply of cars with gasoline and diesel engines in Europe by 60%. The company said it had to revise its strategy after production faced a severe semiconductor shortage and rising nickel prices.

Another reason for the pressure on the German stock market is the refusal of the EU countries to import Russian coal as part of the sanctions policy against the backdrop of the continuation of the military conflict in Ukraine. According to experts, this step could seriously undermine the production activity of enterprises and call into question energy security.

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On the global chart of the asset, the price is traded as part of a correction to the previous decline. Technical indicators are reversing again and are ready to give a sell signal: the fluctuation range of the Alligator indicator EMAs started expanding towards decline and the histogram of the AO oscillator is approaching the transition level.

Support levels: 13850, 12600 | Resistance levels: 14510, 15341​
 

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Serious pressure on the US stock market was exerted by the minutes of the meeting of the Federal Open Market Committee of the US Federal Reserve (FOMC) published yesterday. According to the document, most of the participants in the meeting would have preferred to raise the rate by 0.50% already in March against the backdrop of high inflation, but as a result, the indicator was corrected by a minimum amount of 25 basis points. Also, the regulator confirmed plans to reduce the balance sheet by 95B dollars per month. According to forecasts, the agency is ready to start a quantitative increase and increase the rate by 50 basis points at once in May.

This week, traders were on the lookout for reports that investment firm Berkshire Hathaway Inc. has purchased an 11.4% stake in the American manufacturer of personal computers and printing equipment HP Inc. The deal amounted to 4.2B dollars.

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The index quotes have left the limits of the narrow downward channel and are forming a global Head and shoulders reversal formation. Technical indicators give a poor signal to buy: indicator Alligator's EMA fluctuations range is still quite wide, and the AO oscillator histogram forms downward bars in the buy zone.

Resistance levels: 15150, 16387 | Support levels: 14225, 13070​
 
 
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