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The weekly market brief

๐Ÿ’ก22 - 26 February 2021

๐Ÿ“ˆ FTSE 100: 6,483.43 ( -1.91%)

๐Ÿ“ˆ FTSEMIB: 22,848.58 ( -0.66%)

๐Ÿ“ˆ DAX: 13,786.29 ( - 0.67%)

๐Ÿ“ˆ S&P 500: 3,811.15 ( - 1.68%)

๐Ÿ“ˆ Nasdaq 100: 12,909.44 ( -3.52%)

๐Ÿ“ˆ Dow Jones: 30,932.37 ( -1.19%)

The percentage increases are on a weekly basis


FTSE 100 (#UKX)

The #UKX had a rough week down -1.91% where GBP/USD rate and an overall market bearish sentiment led the FTSE at important level of support.

As highlight last week, the Index reversed from 6,700 and went as low as 6,462: at present, it seems the #UKX is not able to break the downward trendline that has been put in place since 6 January 2021.


From a technical perspective, the #UKX is now sitting at a strong support level where we believe the breath remains to the downside.

Looking at the MACD, it seems the bearish sentiment might have just started however with a this low RSI, moves to the upside are possible, at least for the nearest future.

For the week ahead, crucial role will be played by the 50MA: in the past, when the #index closed below the 50MA, it acted as resistance. Given the Friday moves, the first days of the week will potentially have the โ€œdead cat bounceโ€ effect where we will target 6,660 as intermediate level before considering moves in either direction.

A break below current support, will make 6,400 our next target.


Support at 6,462 and resistance at 6,662


FTSEMIB (#FTSEMIB)

The #FTSEMIB, compared to other major indexes, had a calm week down only -0.66%. The index keep moving around the 9MA and unless it will close above it or below the 50MA we donโ€™t expect much moves for the week ahead.


From a technical perspective, the MACD and RSI are both bearish and still have room to fall lower: perhaps, the #FTSEMIB might found a good reversal point at the 50MA.


For the week ahead, we believe the important level to watch will be 22,600 and 23,000: a close below 22,600 would signal a further possible sell off with target at current support. On the other hand, a close above 23,000 might signal a short term change of sentiment where will target current resistance.


Support at 22,380 and resistance at 23,435


DAX (#DAX)

The #DAX closed the week down -0.67% where it managed to sit just below the 50MA: last time it closed below was at the beginning of February, followed a bounce back and at the end of October, where it followed a sell off.

At this moment, we believe it is too early to predict where the #DAX will go, however we will identify critical points that might help us to understand where the Index will go next.


From a technical perspective, the #DAX is at an important level that acted as support since December 2020 (a part from few days between January and February). The MACD is pointing to the downside, where a fall below 0 would indicate a bearish momentum, the RSI is pointing as well to the downside, however last time it was at this level at the beginning of February it bounced back.


For the week ahead, given the not cleat path suggested by MACD and RSI, we indicate how a close below 13,600 would trigger a test of 13,452. On the other hand, a close above 13,875 would indicate 14,000 as next target.

However, given the reversal type looking candle of Friday and good, positive, volumes tempt us to think that a short move to the upside is indeed possible.

Support 13,756 and resistance at 14,127


S&P500 (#SPX)

The #SPX was down -1.68% over the week given the bearish sentiment that took over in the market, especially due to the spike in the 10 years US yields.


From a technical perspective, the #SPX is still in bullish context: the upward channel that has been taking place since October 2020 is not broken yet.

On this occasion, the lower end of channel coincides with the 50MA and it acted indeed as a strong area of support despite the strong selling of previous days.

It is too early to say if the trend is broken, especially given the reversal/doji type looking candle of Friday. Both MACD and RSI are pointing to the downside but at level that in early January led to bounce and reverse to the upside.


For the coming week, especially during the first days of the week we are in favour of a bounce to the upside till 3,871: at that level we will have to evaluate candlestick setup and volumes to target either a reversal or a continuation. At the same time, a close below 3,800 would signal a continuation to the downside and we would target 3,708.


Support at 3,811 and resistance at 3,871.


NASDAQ (#NDX)

The #NDX had a rough week down -3.52% where the spike in 10 years US yields directly impacted the tech index. The move was so strong that led the #NDX to exist the upward channel that was taking place since November 2020.

From a technical perspective, the Index is now below the 50MA which can eventually act as strong area of resistance. The RSI is approaching oversold territory while the MACD is almost below 0.

The sell off stopped at a strong area of support, consolidation level of December/January, and we do not expect the #NDX will be able to break it so easily.


Given the doji candle that closed the last trading session, we expect for the week ahead a reverse at least till 13,100 which could act as intermediate resistance level. At this level, the volumes and candlestick setup will determine either a continuation to the upside or a reversal lower.


Support at 12,758 and resistance at 13,400.


DOW JONES (#DJI)

The #DJI had a negative week down -1.19%, less than major US peers, where closed just above the 50MA.

From a technical perspective, last week we highlighted how especially the MACD was signalling a strong crossover: at present, both MACD and RSI are strongly pointing to the downside, almost signalling that this could be only the beginning.


Giving the strong two bearish candles that finished the week, we believe the breath is still to the downside. However, before keep continuing to the downside, we aim for a retest of previous support, now resistance.

For the week ahead, we expect a potential retest of 31,251 before keep going lower. In case, a retest would not occur, a break of current support would confirm 30,345 as next target.

Support at 30,900 and resistance at 31,251


OTB Global Investments

London, 28 February 2021

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