Equities report: Uncertain market forces sideways motion

US stock markets tended to send mixed signals over the past week implying a rather indecisive market. It should be noted that on a fundamental level, the agreement for the US debt ceiling tended to provide little support, while tech shares seem to dominate the markets with the AI frenzy still leading market sentiment. In this report, we aim to present the recent fundamental and economic news releases that impacted the US stock markets, look ahead at the upcoming events that could affect their performance and conclude with a technical analysis.

Apple’s AR/VR headset

We make a start by noting that Apple’s share price hit a new record high on Tuesday at $184.70 yet seemed to correct lower the following day. Apple may have had its biggest product event in years at which it presented its new AR/VR headset, the Apple Vision Pro. The ski mask like googles, allows you to see through the glass and apply layers that are to assist the user and create a mixed reality. Also, Disney is to work and create content for the headset which is to be considered an additional plus. It would seem as if the company is placing more emphasis on VR rather than AI. Overall, the release of the new AR/VR headset may be considered as a positive on the one hand yet it’s also a risk as the market seems to remain unproven for the particular product currently. It should be noted that despite the AR/VR headset being the star of the event, Apple also unveiled the 15-inch MacBook Air which seems to promise better performance, at least battery-wise. Furthermore, there are new features for FaceTime and messages while the Apple Watch, the iPad and AirPods seemed to have been freshened up.

Intel continues to generate interest

The issue is characteristic in regard to the market’s AI frenzy. We note that Intel’s share price fell on Monday after Apple’s announcement that the new Mac Pro computer is to use the new M2 Ultra chip which is to replace the Intel processor. Overall the fact that Apple is expected to replace Intel’s microchips with in-house produced models had understandably, a negative impact on Intel’s share price, yet it seems to have regained the lost ground in Wednesday’s session. Yet the company seems to be still a way off to compete with semiconductor giants such as TSMC and Samsung, leaving market participants skeptical.

NVIDIA’s AI rally seems to have been halted, for now

Following last week’s report, NVIDIA’s share price rally seems to have hit a ceiling after $418.20 and currently has consolidated lower. Nevertheless, the company is about to expand its frontiers as it announced its new DGX GH200 AI supercomputer. The new supercomputer is reported that it will have a massive new memory and is to be powered by its GH200 Grace Hopper superchips. That is to be added to the company’s newly introduced AI model Neuralangelo which is able to create 3D versions of a 2D video. Overall the company seems to be pioneering a field that is expected to grow exponentially, according to some and that could provide additional support for its share price. Yet we remain worried about the intense market enthusiasm for the sector and would not be surprised to see a correction lower at a future stage.

Análisis técnico

#NVIDIA Daily Chart

Support: 368.30 (S1), 317.25 (S2), 261.30 (S3)

Resistance: 418.50 (R1), 463.40 (R2), 503.10 (R3)

NVIDIA’s share price seems to have hit a ceiling at the 418.50 (R1) resistance line since our last report. The share’s price has been moving in a sideways motion between the 418.50 (R1) resistance line and the 368.30 (S1) support line. For the time being, we tend to maintain a bias for the sideways motion to be maintained, yet we highlight that the RSI indicator despite dropping is still above the reading of 70, implying a residue of a bullish sentiment in the market. Also please note that the price action’s stabilisation has allowed for some room to be formed between itself and the upper Bollinger band, which may allow the bulls to play again. Yet for a renewal of the bullish outlook we would require NVIDIA’s share price-action to clearly break the 418.50 (R1) resistance line which forms the latest peak and start aiming for the 463.40 (R2) resistance level. Should the bears take over, we may see NVIDIA’s share price breaking the 368.30 (S1) support line and aim for the 317.25 (S2) support level.

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