Weekly market brief: 25 - 29 October 2021


Index

Current price

Expectation

S1

R1

S2

R2

​FTSE100

7.024

Bearish

7.165

7.220

6.980

7.285

FTSEMIB

26.572

Bearish

26.184

26.750

25.554

27.370

DAX 40

15.553

Bearish

15.306

15.736

14.967

15.980

S&P 500

4.542

Bearish

4.468

4,545

4.390

4.590

NASDAQ 100

15.355

Bearish

15.152

15.500

14.775

15.702

DOW JONES

35.677

Bearish

35.455

35.772

35.096

35.772

S: Support R: Resistance

FTSE 100 (#UKX)

The FTSE 100 ended the week down -0.08%

For the week we expect a downside to at least 7,165


Indicators

The past week of consolidation could now lead the FTSE100 to retrace slightly.


Towards the beginning of the week we expect a "back-test" of the previous resistance level (now support).

MACD is starting to curve to the downside after a good bullish period.

RSI was again rejected at the level of 60 and we could now expect a slight retracement in the indicator as well.

A key role is in fact now played by the support at 7,165: the index could reverse to the upside once this level has been tested with a bull flag formation. At the same time, such a reaction could lead the index into overbought territory.

Second scenario, it could see a retracement to 7,120 and then evaluate subsequent swings.

Support for 7.165

Resistance at 7,220


FTSEMIB (#FTSEMIB)

The FTSEMIB had a week up + 0.80%

For the week we could see a retracement to 26.184

Indicators

The index has now consolidated at the levels of the end of August and we could see a slight at least till the support level (former resistance).

The reversal candle reported on Friday suggests a possible “evening doji star” formation and therefore a possible imminent descent.

MACD, despite a strong rally, is signaling a slight weakening

RSI is now at 60, a resistance level that has been respected more than once and which, looking at previous moves, could now reverse to the downside.


A slight retracement would avoid overbought situations and make the bullish push less hectic.


Support for 26.184

Resistance at 26,750


DAX (#DAX)

The DAX ended the week up + 0.28%

For the week ahead, we expect a slight decline to 15,400


Indicators

After being pushed back few times by the 50MA, we could expect a slight retracement to the intermediate resistance at 15,400-15,450 for the week.

Once it has reached these levels, it will be necessary to understand whether the index will be more inclined to a bull flag formation or to a more general bearish "topping patter" that could lead to the DAX retesting 15,200

The MACD, despite an upward crossing, is still below 0 confirming a still "bearish" momentum and a failure to overcome it would support the thesis of a possible downside.

The RSI has almost reached the level of 60 and looking at previous fluctuations it could retrace slightly.


Support at 15,306

Resistance at 15,736


S&P500 (#SPX)

The S&P 500 had a week up by + 2.13%

For the coming week, the index could retrace at least to 4,500


Indicators

Also thanks to a weaker dollar during the week, the S&P500 reached a new high and then closed just below.

Friday's doji candlestick suggests a possible retracement at least to the intermediate resistance at 4.500: this could only be a first target and then continue downward to the support level, very close to the 50MA.


MACD, strongly bullish, has now reached levels that have led to slight retracements in the past.

RSI, managed to break through the resistance at 60 and is now curving down in what could be a possible "back-test".

The trend remains strongly bullish but to avoid overbought situations, a retracement would be more than natural.


Support for 4,468

Resistance at 4.545


NASDAQ 100 (#NDX)

The NASDAQ ended the week up + 1.77%

For the week ahead, we expect a retracement to 15,200


Indicators

The index managed to exceed the 50MA, but did not reach the previous highs of 15,702.


MACD has crossed to the upside but appears to be declining slightly

RSI has just crossed the 50 line and seems to want to back-test this level.


We remain bullish on the Nasdaq but expect a slight consolidation given the strong candles of the last few days.


Looking at previous fluctuations we can see a certain similarity with the period of February-March and May-June 2021: in both cases, the NDX after reaching a new maximum has retraced strongly and then formed a lower high in conjunction with the 50MA.

In both cases, the index then had strong bullish movements


The trend remains strongly bullish but we expect a slight retracement in the short term and then continue higher.


Support for 14.775

Resistance at 15,152


DOW JONES (#DJI)

DOW JONES had a week up + 1.70%

For the week ahead, we expect a retracement to at least 35,300


Indicators

The strong bullish push led the DJI to reach a new high at the end of the week: the candle of indecision, however, suggests a possible retracement in the short term.


MACD has crossed the 0 line and is now indicating a slight loss of strength

RSI broke above the 61 level and looking at past swings may now retrace.


The trend remains bullish and we are convinced of further new highs in the medium term, but at the moment the index is relatively far from the 50MA together with the MACD and RSI indicators which have recorded excellent bullish swings in the last two weeks.

A retracement is more than natural and will offer new opportunities for long positions


Support for 35,455

Resistance 35,772

OTB Global Investments

25 October 2021

0 views0 comments