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Weekly market brief: 14 - 18 November 2022


Financial index

Current price

Forecast

S1

R1

S2

R2

​FTSE100

7,318

Bearish

7,000

7,400

6,850

7,600

FTSEMIB

24,455

Bearish

22,500

24,850

21,000

25,500

DAX 40

14,255

Bearish

13,100

14,350

12,650

15,000

S&P 500

3,992

Cons./ Bearish

3,750

4,050

3,600

4,180

NASDAQ 100

10,857

Consolidation

10,400

12,000

10,000

12,700

DOW JONES

33,747

Cons./ Bearish

31,200

34,150

30,200

35,000

TADAWUL

11,211

Consolidation

11,250

12,270

10,900

12,650

FTSE ADX

10,629

Cons./ Bearish

9,900

10,750

9,680

11,000

DFM

3,407

Consolidation

3,270

3,500

3,100

3,730

S: Support R: Resistance

FTSE 100 (#UKX)

The FTSE100 index had a week down by -0.23%

For the coming week we are in favour of a retracement in the area of ​​7,200-7,250


Indicators

Very positive week for the British index which brings back the price close to the strong resistance at 7,400.


We can see that the price ended the week just below the 200-day moving average (blue line) and we don't believe there is the strength and conditions needed to move further up.

MACD and RSI are now very extended to the upside: the former is however reporting a slowdown in the histograms and the RSI is in overbought territory and negative divergence with the price action.


The exit from the Bollinger Bands is a further element of caution and a sign of a price that is now very extended to the upside and with high downside potential.


We are bearish on the FTSE 100 and await substantial declines before considering long setups.


Support at 7,000

Resistance at 7,400




FTSEMIB (FTSEMIB)

The FTSEMIB index had a week up by + 5.04%

For the coming week we are in favour of a retracement in the area of ​​23,300


Indicators

Very positive week for the FTSEMIB which brings the Italian index back above the 200 days moving average (blue line) and strong resistance at 23,600.


If in the medium to long term these latest upward moves are certainly positive, in the short term we believe that now the price is very extended to the upside and that it may need significant retracements before proceeding to the upside.


MACD and RSI are now very extended to the upside with the latter in particular in overbought territory (a scenario that has not happened since November 2021).


We are bearish on the FTSEMIB as we believe that price swing and internal indicators are now very extended to the upside, shifting the risk in favour of retracements rather than repeated upside moves.

The index is now very far from all the main moving averages, making the current scenario unstable and subject to significant reversals.


Support at 22,500

Resistance at 24,850





DAX (#DAX)

The DAX index had a week up by + 5.68%

For the week ahead, we are in favour of a progressive retracement to 13,600


Indicators

Positive week for the German index which brings the price well above the 200 day moving average (blue line) and we believe the conditions are not there to continue rising, at least in the short term.


MACD and RSI are now very extended to the upside with the latter in overbought area: this aspect radically shifts the risk /reward in favour of possible short-term declines.


The large trading range 12,200-13,600 has been temporarily broken and we could assume 13,600 as a back-test area


We are bearish on the DAX and in favour of possible short-term weakness


Support at 13,100

Resistance at 14,350




S&P500 (SPX)

The S&P500 index had a week up by +5.90%

For the coming week we are in favour of a possible consolidation in the area of 3,800 - 3,900


Indicators

Positive week for the American index which gained strength after a long period of consolidation.


Given the strong candles at the end of the week it is desirable to expect a consolidation rather than a bullish continuation: the short-medium term target remains the long bearish trendline at 4,000-4,100 and we believe that this can be reached after the occurrence of a possible reversal /backtest.


We are positive on the S&P 500 and we believe there is room for further upside moves, at the same time we believe it is appropriate to wait for a consolidation in price before considering long setups.


Support at 3,550

Resistance at 3,900



NASDAQ 100 (NDX)

The NASDAQ 100 index had a week up by +8.84%

For the coming week we are in favour of a consolidation in the area of 11,200 - 11,600


Indicators

Positive week for the Tech index which brings the price back to the top of the narrow trading range 11,800-11,600.


The break of the 50-day moving average (yellow line) is an excellent indicator of possible short-medium term bullish continuation. Added to this are the MACD and RSI internal indicators seem to support the index's recovery in strength: the former is marking higher lows and the RSI is now back above 50.


We are positive on the NASDAQ 100 and looking forward to a consolidation above 11,600: once that is exceeded, we see 12,000 and 12,700 as short to medium term targets.


Support at 10,400

Resistance at 12,000


DOW JONES (#DJI)

The DOW JONES index had a week up by +4.15%

For the coming week we are in favour of an initial retracement in the area of ​​32,800


Indicators

Positive week that brings the index back to the levels of August 2022 and above the 200-day moving average.

At the same time, the strong distance from the 50 (yellow line) and 9 (red line) day moving averages makes us remain cautious on the latest strong upward extensions.

MACD and RSI are now very extended to the upside with the latter in overbought territory.


In addition, we believe it is interesting to point out how the recent swing in October is very similar to the ones recorded in August: we are not alluding to upcoming new lows in the DJI but we believe there is a fair chance of a retracement at least close to the 50MA, or around 31,000 - 31,500.


A retracement of this magnitude, however, would present an overall encouraging scenario in favour of medium-term bullish case.


We are bearish on the DOW JONES given the strong upward extension, further stretches would make the situation even more fragile and less sustainable. We look forward to a retracement in both price and internal indicators, along with a possible reconciliation with the major moving averages.


Support at 31,200

Resistance at 34,150




TADAWUL (#TASI)

The TADAWUL index had a week down by -1.99%

For the coming week we are in favour of a consolidation in the area of SAR 11,000 - 11,200


Indicators

Bearish week for the Saudi index which we believe is positioned to test again the strong support at 11,000 with the 50-day moving average (yellow line) continuing to act as strong resistance.


MACD and RSI both reversed to the downside with the second close to the oversold area


At the moment we prefer to remain neutral on the Tadawul, although the area of 11,000 - 11,250 has in the past represented a buying zone, we prefer to wait for a consolidation and inversion of the price.


Support at 11,200

Resistance at 12.270



FTSE ADX GROWTH MARKET INDEX (#FADGI)

The FTSE ADX index had a week up by + 1.41%

For the coming week we are in favour of a consolidation in the area of 10,200


Indicators

Positive week for the ADX which sees the price reaching all-time highs


MACD and RSI are now very extended to the upside shifting the risk / reward ratio in favour of possible downside moves rather than repeated stretches to the upside.


At the moment we prefer to remain neutral on the FTSE ADX, the strong upward extension is positive in the medium to long term. At the same time, before evaluating long setups, we believe it is appropriate to wait for the price to stabilise: a return in the area of 10,200-10,300 could be act as backtest area.


Support at 9,900

Resistance at 10,750




DUBAI FINANCIAL MARKET GERNAL INDEX (#DFMGI)

The DFM index had a week up by + 1.70%

For the coming week we are in favour of a possible upside till 3,500


Indicators

Positive week for the DFM as it appears to see the price exiting the most recent trading range


MACD and RSI describe an encouraging scenario having both turned upward.


A possible consolidation above 3,400 could lead the price to reach again mid-September levels'.


Given the recent price action we are slightly positive on the DFMGI, from which we could expect a short-term recovery.


Support at 3,270

Resistance at 3,500



OTB Global Investments

13 November 2022

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