Weekly market brief: 12 - 16 July 2021

FTSE 100 (#UKX)

The FTSE 100 had a mixed week closing with a slight fall of -0.14%

For the week ahead we confirm the uptrend with the first target at 7.165 and 7.215 to follow.

Indicators

This week the index consolidated between 7.165 and 6.980, a relatively wide range that indicates how the break of one of the two levels will lead to strong moves in either directions.

We remain in favor of an uptrend, supported by a rising 50MA and a MACD that is crossing over to the upside.

RSI is rising, the break of one of the two trendlines will anticipate the direction of the index

Support at 7,030

Resistance at 7.165

FTSEMIB (#FTSEMIB) The FTSEMIB was down for the week by -0.88%

For the coming week, the FTSEMIB may have entered a bearish channel, we will wait for the reaching of 25.300 to have a more precise direction.

Indicators

The FTSEMIB this week closed below the 50MA, which hasn't happened since January 2021.

It can be noted that the uptrend channel was momentarily broken and the index started to form lower highs from the beginning of June till today.

MACD is gradually falling below 0, which could indicate a shift in momentum.

A more bullish scenario, however, is given by the RSI that is approaching the trendline, where a break of it could support a bullish movement.

In addition, we had a strong rebound to 24.470 (intermediate support / resistance) followed by a strong bullish candlestick on Friday.

We will wait for a close above the 50MA and above the bearish channel at 25.300 to re-confirm the uptrend.

Support at 25,554

Resistance at 24.930

DAX (#DAX)

The DAX closed the week up by + 0.37%

For the week ahead we confirm again our target at 15.736 and then aim for 15.800.

Indicators

The intermediate resistance at 15.306 held up very well again and allowed the DAX to open the next day above the 50MA.

Volumes seem to be in favor of a bullish momentum also supported by a MACD that seems to want to crossover to the upside.

Particular formation in the RSI, a break of one of the two trend lines could suggest the future direction of the Index: we are in favor of a break to the upside

Support at 15.306

Resistance at 15.736

S&P500 (#SPX)

The S&P 500 had a positive week up + 0.90%

For the week ahead, the index could go to test 4.390

Indicators

It would be more appropriate to expect a retracement of the index but given the strong volumes on Friday, these suggest a continuation at least up to 4.390.

Once this level has been reached, we expect a consolidation phase, thus allowing a reconciliation with the 50MA average and a reduced divergence between RSI and price.

MACD signals strong bullish momentum albeit very close to a bearish crossover.

The general setup of the S&P500 remains very fragile and until there is a more consistent retracement to the 50MA we do not recommend long positions.

Support at 4,286

Resistance at 4.390

NASDAQ 100 (#NDX) NASDAQ had a positive week up + 1.25%

For the week ahead, we are in favor of a retest of previous levels at 14.420 and 14.123

Indicators

We believe that the Nasdaq risk / reward is now very much in favour of long positions: despite having a very strong uptrend, looking at previous swings whenever the #NDX has moved more than 5% from the 50MA had then strong bearish movements.

A decisive bearish movement would not mean a change in trend, but rather a physiological rebalancing of the trend.

The MACD appears to want to cross to the downside

The RSI has now reached overbought, the last time was in September 2020

Support at 14,420

Resistance at 14,827

DOW JONES (#DJI)

DOW JONES had a week up + 0.51%

For the coming week we expect a continuation of the uptrend with a target, in the short term, of 35.093

Indicators

The index this week managed to reconcile with the 50MA which we consider a very positive factor for further bullish momentum.

The MACD has picked up speed and is now above the 0 level, supported by a RSI that has broken the bearish trend line and can now support bullish swings.

Support at 34.261

Resistance 35.096

OTB Global Investments

10 July 2021