Buy before this bank share bounces

TL;DR

Credit Suisse faces challenges from the Archegos affair, but could see a potential rally, while FTSE is poised to test resistance levels for a bullish move.

Transcript

hello it's john burford with chart of the week for monday the 12th of april and this week i'm covering credit suisse which has received an awful lot of headlines recently for all the wrong reasons um it has been involved with the infamous arch egos affair this is a hedge fund that blew up spectacularly it's over leveraged positions um this is a typ... Read More

Key Insights

• 🥺 Credit Suisse's involvement in the Archegos affair has led to a significant loss, but the stock has reached a strong support level, potentially signaling a bounce back.
• 🥺 The FTSE is currently in a rally phase and is approaching a resistance level. A breakthrough could lead to a bullish move and potentially new highs.
• 💡 The shape of the decline on the Credit Suisse chart suggests a corrective pattern, further supporting the idea of a potential bounce back.
• 👋 The FTSE analysis includes a wave pattern, with the current move being a possible wave three of three, indicating a strong bullish trend.
• 💹 The presence of momentum divergence in the FTSE chart suggests that the conviction behind the current rally may be weaker compared to previous rallies.
• 🫵 Confirmation of a bullish view for Credit Suisse requires a move up into a specific region within the next few weeks.
• ✋ If the FTSE breaks through the resistance area, it could result in a test of previous highs and potentially lead to new highs.

Questions & Answers

Q: What is the Archegos affair, and how did it impact Credit Suisse?

The Archegos affair refers to the collapse of a hedge fund due to its over-leveraged positions. Credit Suisse, being involved with Archegos, suffered a 25 percent loss, reflecting the risks of excessive bullish positions.

Q: How does the trend line and support level indicate a potential rally for Credit Suisse?

The trend line drawn from the 2015 high has now been reached, suggesting a potential support region for the stock. Additionally, the shape of the decline forms a known corrective pattern, along with other factors like Fibonacci correction, indicating a possible bounce back.

Q: What is the current outlook for the FTSE?

The FTSE is in a rally phase and is approaching a resistance area. If it manages to surpass this level, it could indicate a bullish trend and potentially lead to new highs.

Q: What is a momentum divergence, and how does it affect the FTSE analysis?

A momentum divergence occurs when the conviction behind a rally weakens. While the FTSE analysis remains bullish, the presence of this divergence suggests that the current rally may not be as strong as the previous one.

Summary & Key Takeaways

• Credit Suisse has been in the headlines due to its involvement in the Archegos affair, resulting in a significant loss. However, the stock has reached a key support level and shows potential for a bounce back.

• The FTSE had previously faced resistance but is now in a rally phase. It is about to test the resistance area again, and if it breaks through, it could signal a strong bullish move.