💡25 - 29 January 2021
📈 FTSE 100: 6,407.46 ( - 4.50%)
📈 DAX: 13,432.87 ( -3.49%)
📈 S&P 500: 3,714.24 ( -3.65%)
📈 Nasdaq 100: 12,925.38 ( -4.64%)
📈 Dow Jones: 29,982.62 ( -2.99%)
The percentage increases are on a weekly basis
The FTSE had a difficult week, down -4.50% from our last reading: a negative sentiment on the market together with previous overextended moves brought the #UKX to fall since the last three weeks.
From a technical perspective, we can see how at the beginning of the week the #UKX kept brushing the 9MA to then really push to the downside and break support at 6,618 and even the 50MA. The Index stopped at a strong level of support which was previous resistance for the majority of November 2020.
Looking at the indicator, we have the RSI that is approaching oversold territory: interesting to note that it is at the same level as November 2020.
On the other side, the MACD is strongly pointing to the downside: if it goes below 0, we could se a confirmation of change in sentiment and enter a more bearish outlook.
For the week ahead, given the strong moves to the downside and touch of strong support level, we might expect a slight rebound. The 6,462 level could an intermediate area of resistance that, if broken, would favour a run till at least the 6,520 before eventually continue to the downside.
Support at 6,387 and resistance at 6,567
The DAX had a very volatile week, down -3.49% from our last weekly market brief: as expected, the Index managed to break support level at 13,756 and continue the run to the downside.
Given the low of Thursday, we notice how the DAX slightly bounce and backtested resistance at 13,600.
From a technical perspective, the MACD is crossing down and if it manages to go below 0 the bearish outlook would be indeed confirmed.
The RSI is pointing to the downside however not yet in overbought territory.
Given the lower low of Friday and a relevant distance from the 9MA we might expect for the week ahead the #DAX to test the 50MA at 13,520 before eventually keep going lower.
For the week ahead, we see support at 13,452 and resistance at 13,756
The S&P500 suffered a strong moved to the downside, down 3.65% on a weekly basis: negative market sentiment brought the index to reverse from all time high and close the month in the red.
From a technical perspective the Index managed to sit on the 50MA together with a MACD that is curving down. The RSI as well is signalling a strong move to the downside.
Considering the strong moves of the last three trading days we are concern that the continuation to the downside could go ahead.
However, given the nature of the Index we might expect a retest of previous support level before continuing the decline.
For the week ahead, we expect the #SPX to eventually test intermediate resistance levels at 3,730 and 3,750 before either continue to the downside or enter in consolidation.
Support at 3,708 and resistance at 3,806
NASDAQ 100 (#NDX)
The Nasdaq 100 had, among the markets we cover, the worse week dropping -4.64%: given a series of disappointing earnings the Index retraced substantially and exit the upward channel we draw last week.
From a technical perspective, the MACD has curved down and the RSI is pointing to the downside: despite an overall bullish context, the #NDQ has drifted down closing down for the month. Given a strong 50MA, we believe the Index may eventually test the current support but then moved slightly upward and enter in consolidation below the 9MA.
For the week ahead, we see support at 12,758 and resistance at 13,151.
Dow Jones (#DJI)
The Dow had a rough week, finishing down -2.99% over the last five trading days where it broke below support levels and 50MA.
From a technical perspective, the MACD is sloping down and if will continue below 0 would confirm a bearish outlook for the Index. The RSI is pointing to the downside however not yet in oversold territory.
Given the strong moves to the downside of recent weeks, we can expect now the #DJi to slightly bounced back and eventually backtest resistance level. At resistance, we expect the Index to then continue to drift lower.
At present, the #DJI has approached a strong area of support/resistance: a break below current support could signalling a strong move to the downside.
Support at 29,732 and resistance at 30,345.
OTB Global Investments
London, 30 January 2021