Tag: Technical Analysis

Current market situation and fundamental drivers

The technology sector is driving a notable rebound in equity markets despite ongoing tariff uncertainties between the US and China. Optimism around potential tariff reductions, strong earnings from major tech companies, and dovish signals from the Federal Reserve have collectively fueled recent gains. However, substantial risks remain, and investors need a cautious approach.

Advantages (bullish factors)

• Optimistic tariff developments: Recent signals from the US administration indicate a willingness to significantly reduce tariffs imposed on China, potentially dropping tariffs from 145% down to around 50-60%. Such actions would alleviate market pressures and stimulate investor confidence.
• Strong earnings in the tech sector: Companies like Alphabet (GOOGL) and Nvidia (NVDA) reported impressive earnings, fueling optimism and significant share price increases, thereby driving broader sector gains.
• Fed’s dovish monetary stance: The Federal Reserve hinted at potential interest rate cuts later in the year, improving liquidity prospects and supporting risk-on sentiment, crucial for growth-oriented tech stocks.

Disadvantages (bearish factors)

• Persistent tariff uncertainties: Despite recent optimism, no formal resolution has been reached in the US-China trade dispute, creating lingering uncertainty and potential volatility in tech stocks.
• Economic slowdown concerns: Consumer confidence recently hit its lowest point since the 1990 recession, with inflation fears and economic uncertainty tied directly to tariff impacts.
• Technical resistance ahead: Price structures indicate major resistance zones ahead, suggesting that recent gains might face significant selling pressure unless robust breakthroughs occur.

Detailed technical outlook

Nasdaq futures technical levels

Nasdaq futures recovered about 50% of the losses from the collapse at 22400, closing Friday’s trades at 19554. Critical support lies at 19173, 18800, and 18530, while resistance is positioned at 19990, 20212, and, notably, 20458. A decisive breakout above 20458 could trigger moves to 20855 and 21100, whereas dropping below 19418 risks retesting lower supports.

Tesla Inc. (TSLA)

Tesla surged approximately 27% due to CEO Elon Musk’s planned focus shift back to Tesla, easing regulatory policies on autonomous vehicles, and anticipated robotaxi deployments. The stock reclaimed critical resistance at $244, breaking through $263 and $275. The next crucial resistance levels are $294 and $306. Failure to break these levels risks a reversal back to $275, $263, and potentially $244.

Alphabet Inc. (GOOGL)

Alphabet rallied over 9%, benefiting from better-than-expected Q1 earnings and revenue. It re-entered the critical $163-$169 support/resistance zone. Holding above $169 could propel the stock toward $175 and $178 while dropping below $163 risks declines to $158 and $154.

Nvidia Corporation (NVDA)

Nvidia posted a substantial 16% gain, driven by bullish sentiment in AI and data-centre markets. The recent breakout into the 109-111 resistance zone indicates confidence among traders. Successfully pushing beyond this critical resistance could target levels at 115 and 117. Falling below 109 would likely see a retracement towards supports at 105, 102, and potentially 98.

Meta Platforms (META)

Meta gained 13%, breaking out of a two-month descending channel. The current resistance is between $540 and $550. Breaking above this zone targets $565-$575, while dropping below $540 could lead to retracements towards $525, $515, and potentially $500.

Microsoft Corporation (MSFT)

Microsoft’s share price rose 10%, driven by optimistic sentiment ahead of Q1 earnings. Critical resistance is at $386-$393. A breakout above $393 targets $403, $410, and potentially $420, while failure could see a pullback to $376 and $369.

Apple Inc. (AAPL)

Apple rallied 10%, approaching resistance at $210. A breakout above $210 could target $217, $222, and $230, while failure risks pulling back to support levels at $204, $200, and, in the worst case, $190.

Amazon.com Inc. (AMZN)

Amazon posted a robust 14% gain, breaking through resistance levels as optimism builds ahead of earnings. Resistance is set at the $183-$187 zone. Breaking above $187 could target $193, $197, and $203. Failure to maintain above $183 might reverse the price to support levels at $177 and $173.

Strategic outlook for traders and investors

Investors and traders should closely monitor critical resistance and support levels detailed above. While fundamentals currently support bullish sentiment, unresolved tariffs and technical resistance suggest that traders and investors should be prepared for volatility, which is crucial. Position sizing and risk management remain essential in navigating this uncertain market landscape.

When two tech titans with a combined market cap of over $4 trillion prepare to reveal their Q1 earnings, the stakes stretch far beyond Wall Street. This isn’t just another earnings season – it’s a reality check on how big tech plans to handle the rising costs of AI, shifting alliances, and new threats from competitors and regulators.

Alphabet and Microsoft aren’t just reporting numbers. They’re setting the tone for where tech investing is headed next – and whether AI’s billion-dollar promises are still on track.

What if the next chapter of tech Investing Isn’t about who leads in AI – but who survives It?

This week, Alphabet and Microsoft will reveal more than quarterly earnings. They’ll show us how two of the world’s most influential companies are navigating a high-stakes landscape of artificial intelligence, platform battles, and economic uncertainty.

Forget the hype. What’s coming could decide who dominates – and who drifts – through the rest of 2025.

Alphabet: AI expansion amid ad pressures and trade fears

Alphabet reports earnings on April 24, and the stakes couldn’t be higher. Backed by a hefty $9 billion vote of confidence from Goldman Sachs, the Google parent is betting on AI – but it’s also juggling increasing headwinds.

The recent $32 billion acquisition of cybersecurity firm Wiz hints at Alphabet’s ambitions to become indispensable across the cloud and security spectrum. Wiz’s cross-platform capabilities make Alphabet a more serious contender in the multi-cloud arena, where compatibility is king.

Yet Alphabet’s journey is far from smooth. The ad business – its traditional powerhouse – is facing stiff competition. Amazon’s creative tie-ups with platforms like Pinterest and Snapchat threaten to siphon off young, ad-savvy audiences. In addition to the pressure from rising antitrust heat and fears of new tariffs under a potential Trump administration, the picture becomes more complicated.

Analysts are still backing Alphabet to deliver forecasting:

Still, not everyone’s bullish. Citi recently pulled back its price target to $195, citing risks in the ad sector that could dent Alphabet’s near-term upside.

Microsoft: Riding quantum dreams but watching its AI ally

Microsoft’s turn comes on April 30 – and the mood is cautious. The company’s long-standing alliance with OpenAI was once its ace card. Now, it’s a wildcard.

OpenAI’s surprise $3 billion buyout of Windsurf, an elite AI coding platform, has rattled markets. Once seen as Microsoft’s AI extension, OpenAI now seems more independent – and potentially competitive. With $40 billion in fresh capital, OpenAI could go its way, prompting concerns over how Microsoft’s AI pipeline might be affected.

Despite the AI shake-up, Microsoft remains a Wall Street darling. Azure continues to perform like a recession-proof machine, and Microsoft 365 remains a reliable revenue anchor. Mizuho’s Gregg Moskowitz keeps a $475 target on the stock, citing Microsoft’s scale and cloud infrastructure as key strengths.

But the real buzz? Quantum computing. Microsoft recently unveiled the Majorana 1 chip – a leap in quantum tech enabled by a breakthrough “top conductor” material. While still in the early stages, the quantum computing market is forecast to balloon to $90–$170 billion by 2040, with strong government and private sector backing.

That puts Microsoft in a prime spot. Its investment in future-proof technologies, from AI to quantum, could pay massive dividends – if it stays ahead of the curve.

Quantum spending has also been growing steadily and is expected to stay on that trajectory in the foreseeable future. Fifty to 60 percent of the spending is expected to come from the public sector, 35 to 50 percent from the corporate sector, and the rest from supply chain spending.

Source: Hyperion Research

Technical outlook: The bottom line

The upcoming earnings calls from Alphabet and Microsoft will be pivotal. They will clarify AI strategies, quantum computing potential, and how each company plans to tackle economic uncertainties. Investors now face a crucial decision: jump in early, banking on potential upside, or await further clarity from executive insights.

Whichever approach investors choose, one thing is clear: Tech earnings season is shaping up to be exciting – and potentially lucrative – for those paying close attention.

At the time of writing, Google stock is hovering around the $153.86 mark. Prices remain below the moving average, indicating that the trend is still downwards. However, RSI rising steadily indicates that some upside pressure is building. Should the downward trend continue, prices could find support around the $149.18 and $146.34 support levels.

Source: Deriv MT5

Microsoft stock has also seen some downward movement over the past few days. The RSI pointing up suggests that some upward pressure is building. However, we recently saw a “death cross,” a tell-tale sign of a bearish trend. This is when the 200 SMA crosses over the 50 SMA.

If the slump continues, prices could find a support floor at the $356.53 support level. Prices could find resistance barriers at the $380.00 and $395.00 resistance levels if we see a significant bounce.

Source: Deriv MT5