The declines on the stock markets in March were so steep that investors rushed to "buy the dip". Nobody expected such a dynamic V-shaped rebound. US indices have already managed to recover over 50% of the mid-February drop. However, one may wonder whether markets have grown too complacent. After all, the global economy is still heading for probably the most severe recession in history. In today's analysis we will take a look at S&P500 (US500), DAX (DE30) and Tesla (TSLA.US).
US500
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Open account Try demo Download mobile app Download mobile appLet's start with the S&P 500 (US500) as it recovered over half of recent drop. From a technical point of view, US500 is trading very close to the key resistance zone. The purple area on the chart marks the price gap from 8th March. Additionally, there is the 61.8% Fibonacci retracement of the big downward wave. According to the Elliott Wave Theory, ongoing move looks like abc correction. As long as the price sits below the aforementioned resistance zone, the main trend remains downward. The support zones are marked with green on the chart below.
US500 D1 interval. Source: xStation5
Tesla
The bubble on Tesla stock burst amid the coronavirus panic. Share price of Elon Musk's company almost reached $1,000 but a drop exceeding 60% followed. However, the stock is on the rise again. Price responded to a key support zone resulting from previous price reactions. Stock rebounded over 100%. According to the classic technical analysis, upward movement could be now continued towards YTD highs.
TSLA.US interval D1. Source: xStation5
DE30
Technical situation on the German DE30 is similar to the one observed on the US500 chart but in this case correction is slightly smaller.. Looking at the D1 interval, one can see a potential ABC structure. The resistance zone marked with red is crucial and is a result of several factors. There is a gap here from 8th March, the 61.8% Fibonacci retracement of the big drop and potential geometry of A and C waves. As one can see there is still plenty of room for DE30 to run higher but one should also keep in mind that the main trend remains downward. Breaking above the aforementioned resistance at 11,500 pts would be a big signal for the bulls.
DE30 interval D1. Source: xStation5
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