Weekly market brief: 12 - 16 December 2022

Financial index	Current price	Forecast	S1	R1	S2	R2
​FTSE100	7,476	Bearish	7,200	7,600	7,100	7,670
FTSEMIB	24,277	Bearish	22,500	24,850	21,000	25,500
DAX 40	14,370	Bearish	13,100	14,550	12,650	15,000
S&P 500	3,934	Cons./ Bearish	3,750	4,100	3,600	4,180
NASDAQ 100	11,563	Consolidation	10,400	12,000	10,000	12,700
DOW JONES	33,476	Cons./ Bearish	31,200	34,500	30,200	35,000
TADAWUL	10,246	Cons./ Bullish	10,000	11,200	9,700	11,700
FTSE ADX	10,251	Consolidation	9,900	10,750	9,680	11,000
DFM	3,325	Cons./ Bullish	3,270	3,500	3,100	3,730

S: Support R: Resistance

FTSE 100 (#UKX)

The FTSE100 index had a week down by -1.05%

For the week ahead we are in favour of a retracement to the 7,400 area

Indicators

Negative week for the British index, as it almost seems to want to repeat the August's setup.

The price finally broke below the 9-day average (red line) which has been a strong dynamic resistance since October.

We believe this break is important, especially after a long upside phase: we could expect a short back-test of the 9MA and then, in our opinion, begin a downward phase.

MACD and RSI have started an initial reversal and mirror price action.

We are bearish on the FTSE 100 as we believe risk/reward is still in favour of further downsides: short-term target remains the 50-day average (yellow line), today at 7,200.

Support at 7,150

Resistance at 7,600

FTSEMIB (#FTSEMIB)

The FTSEMIB index had a week down by -1.40%

For the week ahead we in favour of a retracement to the 23,700-23,500 area

Indicators

Negative week for the Italian index which saw the break of the narrow trading range in place singe the beginning of November.

We believe this move could be an early sign of further short-term bearish pressure.

MACD and RSI are also slowing down and in line with the price.

After these initial declines, it is likely to expect a very brief recovery of momentum and then, in our view, proceed further downwards.

We are bearish on the FTSEMIB: November's strong stretches have only now begun a retracement phase and we believe a plausible short-term target is the 50-day average, now at 23,100.

Support at 22,500

Resistance to 24,850

DAX (#DAX)

DAX index had a week down by -1.09%

We are in favour of a progressive retracement to 13,900 for the week ahead

Indicators

Bearish week for the German index which keep staying within the narrow trading range started in November 2022.

The few closes below the 9-day average (red line) seem to herald a possible trend reversal to the downside.

MACD and RSI are slowing down in line with the price action

We are bearish on the DAX and in favor of possible short-term downward pressure: we believe the trend reversal has only just begun and a possible short-term target is the 50-day average (yellow line), now at 13,600

Support at 13,100

Resistance at 14,550

S&P500 (#SPX)

The S&P500 had a week down by -3.37%

For the week ahead we are in favour of a possible consolidation on the 3,900 area

Indicators

Negative week for the US index which sees the price at the November levels'..

The price action seems to be forming a possible “head and shoulders” setup, where we should in theory see a slight recovery followed by a stronger bearish reversal to at least 3,800 - 3,850.

MACD and RSI are retracing but continue to hold in positive territory.

We remain neutral on the S&P 500 and prefer to wait for further market reversal

Support at 3,750

Resistance at 4,100

NASDAQ 100 (#NDX)

The NASDAQ 100 index had a week down by -3.59%

We are in favour of a consolidation in the 11,500 area for the week ahead

Indicators

Negative week for the Tech index which keeps the price substantially unchanged from the month of November.

The price is currently stuck between the 9 (red line) and 50 (yellow line) day averages and only the break of one of these two levels will lead to more pronounced short-term volatility.

MACD and RSI are flat, reflecting a hesitant price action.

We are neutral on the NASDAQ 100 but with bearish expectations,: a recovery in US 10-year rates could lead to further market downward pressure.

Support at 10,400

Resistance at 12,000

DOW JONES (#DJI)

The DOW JONES index had a week down by -2.77%

For the week ahead we favour an initial retracement to the 33,000 area

Indicators

Bearish week on the industrial index which saw anyway the price holding above the strong intermediate support at 33,400.

MACD and RSI mark a notable slowdown although still in positive territory.

Looking at previous price action, we believe risk/reward is still in favour of possible short- to medium-term downsides.

We remain bearish on the DOW JONES and that only a retest with the 50-day average (yellow line) could possibly offer interesting setups.

Support at 31,200

Resistance at 34,500

TADAWUL (#TASI)

TADAWUL index had a week down by -5.32%

We are in favour of a recovery to at least SAR 10,500 for the week ahead

Indicators

Bearish week that saw the Saudi index breaking the strong resistance at 10,500

As happened in November 2021, the strong distance from the 50-day average (yellow line) could suggest a possible short-term recovery. At the same time it is important to stress that the first obstacle to overcome remains the 9-day average (red line), which has played the role of dynamic resistance in recent months

MACD and RSI are in oversold territory, decreasing the possibility of further short-term downside.

At the moment we prefer to remain neutral on the Tadawul. The strong downside extension makes today's price action very interesting, at the same time we believe it is worth waiting for a consolidation followed by a price reversal above at least the 10,600 level.

Support at 10,000

Resistance at 11,200

FTSE ADX GROWTH MARKET INDEX (#FADGI)

FTSE ADX index had a week down by -2.58%

For the week ahead we favour a consolidation in the 10,100 - 10,200 area

Indicators

Negative week that now sees the price staying on the 50-day average (yellow line)

MACD and RSI are significantly slowing down in an almost negative divergence with the price: the latter has in fact retraced less than the internal indicators have done.

The initial retracement to the 50-day average is positive and could create interesting long opportunities.

At the same time, we believe it is important to wait for the price to consolidate before making decisions: as 10.250 has played the role of resistance in the past, there is a good chance of a price reversal. In the event that this level will not hold, the price could quickly fall to at least 10,000

We are currently staying neutral on the FTSE ADX.

Support at 9,900

Resistance at 10,750

DUBAI FINANCIAL MARKET GERNAL INDEX (#DFMGI)

DFM index had a week up by +0.03%

For the week ahead we are in favour of a possible recovery to 3,380

Indicators

A week of substantial consolidation for the DFM

Since mid-September, the index has continued to move within the same trading range of 3.300-3.400, giving no particular direction in the short to medium term.

MACD and RSI both seem to suggest an imminent recovery; while the former indicator is essentially flat, the latter is now moving away from the oversold area.

We currently remain neutral on DFMGI waiting for a break of one of the two levels at 3,330 or 3,400

Support at 3,270

Resistance at 3,500

OTB Global Investments

11 December 2022