ABB Ltd is a global technology leader that drives the digital transformation of industries. With a history of innovation spanning over 130 years, ABB specializes in robotics, power, heavy electrical equipment, and automation technology. The company is listed in Stockholm and operates in over 100 countries, ensuring energy efficiency and sustainability for its clients. In Q2 2023, the company’s revenues grew from 7.3 to 8.2 billion dollars (+13%) YoY, and gross profit increased by 26% from 2.3 to 2.9 billion dollars.
ABB 1W Chart Analysis, September 11, 2023
ABB – Signs of trend exhaustion.
The company maintains a long-term growth trend thanks to growing revenue and profit. Its beginning dates back to the bottom of the COVID-19 panic in March 2020. Since then, the share price has increased by around 213%. Although the shorter EMA50 is still above EMA100, the indicators show a bearish divergence similar to that from September 2021 to January 2022 (marked with red vertical lines). Then, the higher price peak was not confirmed by the RSI oscillator. This occurred with a crossover on the MACD, well-predicting declines lasting until June 2022. The decline from the local peak was then approximately 26%.
We are currently dealing with a similar situation. First, a higher price peak occurred without a new peak on the RSI (purple, diagonal lines), and now this oscillator is even falling while maintaining the price at a similar level. It’s a so-called bearish divergence, which usually occurs before the price declines. The risk of downfall emphasizes a death cross on a MACD from the last day of July.
ABB 1W Chart Analysis, Fibo extensions, September 11, 2023
Fibo extension is a technical analysis tool traders use to predict potential price targets. It extends past price moves using Fibonacci ratios, aiding in profit-taking decisions. As we can see, the price respected the original Fibo levels and its extensions quite well. The company’s valuation is currently around the 0.786 (409) retracement. Closing the weekly candle below this retracement may open the way to further declines. Levels worth watching in this case are Fibo retracements, especially those coinciding with EMA100. These are levels 0.5 (351) and 0.382 (328).
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