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SXLK: time to take profitThe ETF SXLK has been providing an easy access to the US big techs for the European investors, allowing us to piggyback the insane bull run over the past few quarters. However in the recent weeks, it's showing some weakness. While the (5) waves up off the March 2021 low looks complete, the daily RSI shows an downward trend. Above all, the weekly RSI and stochastic is leaving the overbought zone, indicating an exhaustion of the rally. When was last time that this happened? It was the covid crash in 2020. I'm aware of the small sample size due to the rather short existence of the SXLK, but I'm certainly willing to pay attention to it. If you take a close look at the XLK, the American OG of the SXLK; top two constituents AAPL and MSFT have signaled potential multiple top, while number 3 NVDA is already in a downward channel. As those three have a combined weighting of about 50% in the XLK, when they head into correction phase, so will the SXLK do. Currently I'm eyeing 66-69 as initial correction target, that is the retracement range of wave (4), and the volume wedge around 67 on the daily should also provide some support. The bounce of yesterday 12-Jan provides an exit opportunity, it's prudent to reduce exposure and/or buy protective puts. Let me be clear that the aforementioned are well run companies, and AAPL and MSFT also pay dividends and buy back shares. Long term I'm not bearish for them, in the short term however, I doubt the high multiples are still justified by the growth. I generally do not track US stocks closely and I prefer using ETF for exposures in the foreign markets, so DYOR. And maybe show some love for the European cyclicals/values?
EURONEXT:SXLKShort
by EuroStockOption
Some hopium for the TSLA bullsTLDR: short term upside target 1k - 1.1k if 860 holds. EW interpretation: On the 4h chart published above, we can see either a i-ii or a a-b movement off the Jan '22 low, with a higher low struct at 838. If a new higher high presents itself, preferably above 860, both counts will project us to ~1050 in the short term. The rising trend of the RSI, started prior to the Jan low, gives some extra hopium. The action off the low today is constructive so far, on the 5min chart I can solidly count five waves up before the pull back begins. Two probable targets for this mini correction, if this count is correct, would be 0.382 and 0.618 retracement marked with the purple fibs, around 875 and 860. (5min chart: ) Stop can be placed under the 0.764 fib ~852. Note: this was a request, not actively following it.
NASDAQ:TSLA
by EuroStockOption
Europe Pays for Its Mistakes as Gas Prices Go Sky-High AgainThis week started with rising fuel prices, as it is getting colder in Europe. The ICE Dutch TTF January gas futures’ prices are close to $160 per MWh and are above October all-time highs. The Weather forecast reports that the temperature will soon drop below zero centigrade in several European cities, and that may cause the power grid to exceed its capacity. But Europe became a victim of higher gas prices by its own fault. The European Union is moving towards green energy, and many details about this transformation have been overlooked, including gas pricing. But officials in Brussels are far from blaming themselves. Instead, the European commission moved to scrap long-term gas supply contracts after 2049. Russia, which is a major gas supplier, constantly called on Europe to extend such contracts to avoid high volatility of gas prices on the spot market. Even 2049 looks like a distant future now. This winter in Europe may be painful as gas supplies from Russia via the Yamal-Europe gas pipeline are close to zero. Warsaw refused to extend long-term contracts with Russia’s Gazprom, replacing it with spot gas auctions. Germany said it would not certify the newly built Nod Stream 2 pipeline until the second half of 2022, and it is also threatening to block the pipeline operations as part of sanctions against Russia in case Russian troops invade Ukraine. Whether there is a political reason behind this threat or not is not really important since Germany will just end up hurting itself. According to BBC polls energy bills will continue to rise. A cold winter and gas reserves shortage are two main reasons for this. Germany’s gas reserves are only 59% full and will not be enough to satisfy demand in case of a severe winter. On top of this market speculations may push gas prices above $200 per MWh in the beginning of next year. Some electricity producers in Germany like Neckermann Strom AG went bankrupt due to high production costs. Five more electricity producers in Germany filed for bankruptcy in October.
NYMEX:TTFF2022Long
by scavoanastasiia