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Weekly market brief: 1 - 5 August 2022


Financial index

Current price

Forecast

S1

R1

S2

R2

​FTSE100

7,423

Consolidation

7,300

7,470

7,100

7,620

FTSEMIB

22,405

Consolidation

20,000

23,650

20,260

25,000

DAX 40

13,484

Consolidation

12,600

14,050

12,000

14,460

S&P 500

4,130

Consolidation

3,950

4,175

3,740

4,370

NASDAQ 100

12,948

Consolidation

12,400

13,500

11,100

14,255

DOW JONES

32,845

Consolidation

32,000

34,000

30,000

35,400

S: Support R: Resistance

FTSE 100 (#UKX)

The FTSE 100 ended the week up by + 2.02%

For the coming week we could see a consolidation in the area between 7,300 - 7,400


Indicators

Positive week for the British index which managed to break above the 50MA (yellow line): we consider this a positive bullish sign for the short-medium term.


At the same time, the strong push brought the price outside the Bollinger bands which now makes us lean towards a slight retracement for the week ahead. The break of the 7.300 level was a very important signal and, in order to avoid overbought scenarios, we believe there may be a slight retracement and back-test before continue to rise.


MACD and RSI support the push of the UKX: the former has broken out of the 0 line (positive momentum) and the latter is now in a strong resistance area.


We remain positive on the FTSE100 and look forward to retracements.


Support at 7,300

Resistance at 7.470




FTSEMIB (FTSEMIB)

The FTSEMIB had a week up by +5.63%

For the week ahead we could see a consolidation in the area of ​​22,000


Indicators

A very positive week for the Italian index that breaks the medium-long term bearish trendline: further confirmation will come when the 50MA (yellow line) will be exceeded.

The two gaps created in the last two days are positive but at the same time they have brought the price outside the upper Bollinger band: as often happens, this can then lead the price to bearish swings aimed at "filling" these gaps that we see at 22,000 and 21,500.


MACD and RSI are both recovering with the former close to a breakout of the 0 line (bullish momentum) and the latter now lying on a strong resistance area.


We remain positive on the FTSEMIB and believe that the index could retrace before continuing higher.


Support at 20,700

Resistance at 23,650



DAX (#DAX)

The DAX ended the week up by +1.74%

For the coming week we could see a consolidation in the area of 13,300-13,400


Indicators

The upsides continue on the German index which is now on the 50MA (yellow line) and on the upper part of the Bollinger band. Given the strong upward extension, we believe that the price may retrace slightly in order to avoid overbought situations and an unsustainable bullish move to the upside.


MACD and RSI are supporting the push, finding the first near the 0 line (positive momentum) and the second at 60, a strong resistance area tested several times in the past.


We remain positive on the DAX and see a bullish push supported by an increase in volumes


Support at 12,600

Resistance at 14,050



S&P500 (SPX)

The S&P 500 had a week up by + 4.26%

For the coming week we are in favour of a consolidation in the area of 4,000 - 4,050


Indicators

Strong week of rises that brought the SPX close to the resistance of May - June 2022. The strong moves to the upside that have just occurred make us exclude a break up of this area and lean more towards a retracement to avoid situations of overbought and unsustainable growth .


MACD and RSI reflect the index positivity with the first above the 0 threshold (positive momentum) and the second very close to the overbought area.


We remain positive on the S&P500 but an almost overbought RSI coupled with strong resistance at 4,150 keeps us cautious and in favour of a retracement.


Support at 3,950

Resistance at 4,175



NASDAQ 100 (NDX)

The NASDAQ ended the week up by + 4.45%

For the week ahead, we believe there may be a retracement to the area of 12,500


Indicators

The week just ended saw the reaching of the intermediate resistance at 13,000: given the strong stretches and the near exit from the Bollinger band, we exclude a bullish continuation up to 13.500 without first seeing a price retracement.


We believe a possible target for this retracement can be identified at 12,500


MACD and RSI support the push of the index and are both very extended upwards: the first is well above 0 and the second has almost reached the overbought area. Still on the RSI, we see a tight uptrend channel that almost seems to suggest a possible very short-term downside.


We remain positive on the NASDAQ100 and despite expecting a possible retracement


Support at 12,400

Resistance at 13,500


DOW JONES (#DJI)

DOW JONES had a week up by +2.97%

For the coming week we could see a possible retracement to the area of 32,400


Indicators

The index is now close to the intermediate resistance seen also in May-June 2022. Given the bullish upsides of the week just ended, we exclude a strong continuation to the upside while we are in favor of a possible retracement: this price action could avoid an overbought situation and unstable push.


It is important to note that the price is now outside the Bollinger band and a bearish swing is very likely.

MACD and RSI are supporting the upside of the index with the former well above the 0 threshold (positive momentum) and the RSI very close to the overbought area.


We remain positive on the DOW JONES but look forward to its retracement

Support at 32,000

Resistance 34,000


OTB Global Investments

31 July 2022

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