Weekly market brief: 16 - 20 January 2023

Financial index	Current price	Forecast	S1	R1	S2	R2
​FTSE100	7,844	Cons./ Bearish	7,400	7,900	7,200	7,800
FTSEMIB	25,783	Consolidation	23,400	25,900	22,400	26,500
DAX 40	15,086	Consolidation	13,800	15,200	13,400	15,500
S&P 500	3,999	Cons./ Bullish	3,750	4,100	3,600	4,180
NASDAQ 100	11,541	Cons./ Bullish	10,400	12,000	10,000	12,700
DOW JONES	34,302	Cons./ Bullish	31,200	34,500	30,200	35,000
TADAWUL	10,744	Cons./ Bullish	10,000	11,200	9,700	11,700
FTSE ADX	10,210	Consolidation	9,900	10,750	9,680	11,000
DFM	3,323	Cons./ Bullish	3,270	3,500	3,100	3,730

S: Support R: Resistance

FTSE 100 (#UKX)

The FTSE100 index had a week up by +1.88%

For the week ahead we are in favour of a possible retracement to the 7.650 area

Indicators

Very positive week for the English index which returns to 2018 highs'.

The upswings resulted in the break of the strong resistance area at 7,650 which now sees the price continuing to move on Bollinger Band upper level.

MACD and RSI are in large overbought territory and in negative divergence with the price action.

We believe that the risk/reward is even more in favour of short to medium term declines with the first target at 7,650 and then, in our opinion, proceed further downwards to at least 7,400-7,300.

We remain bearish on the FTSE100 given the over-extension to the upside

Support at 7,400

Resistance at 7,900

FTSEMIB (#FTSEMIB)

The FTSEMIB index had a week up by +2.40%

We are in favour of a consolidation in the 25,000 area for the week ahead

Indicators

Positive week for the Italian index which is now testing a strong resistance area at 25,800: a level that has acted as support during 2021.

MACD and RSI are very extended to the upside and in negative divergence with the price action: these two factors in fact make us lean towards a possible retracement, especially near a strong resistance area.

We remain neutral on the FTSEMIB with a propensity towards short-medium term downside pressure

Support at 23,400

Resistance at 25,900

DAX (#DAX)

The DAX index had a week up by +3.26%

We are in favour of a consolidation in the 14,600 area for the week ahead

Indicators

Positive week for the German index which is now approaching the strong resistance level at 15,200

MACD and RSI are broadly to the upside and in negative divergence with the price action. It is precisely this last factor that makes us remain skeptical about the possibility of a bullish continuation.

A plausible short-term target we believe to be 14,400 which can then play as a reversal point or first step in view of a more substantial retracement.

We remain short on the DAX40 and waiting for a market reversal.

Support at 13,800

Resistance at 15,200

S&P500 (#SPX)

The S&P500 index had a week up by +2.67%

For the week ahead we are in favour of a possible continuation till 4,100

Indicators

Bullish week where the price managed to remain above the 50-day average.

MACD and RSI are recovering and seem to support the price action

The price is once again slightly above the downward trendline that started in 2022 and given the positive momentum, we do not exclude a test of the 4,100 area.

Unlike other occasions, the inside indicators are not overextended to the upside thus leaving the door open for further upside.

At the same time, a drop below the 50-day average (yellow line) could open the door to a new bearish phase.

We are bullish, cautiously, on the S&P 500

Support at 3,750

Resistance at 4,100

NASDAQ 100 (#NDX)

The NASDAQ 100 index had a week up by +4.54%

We are in favour of a possible upside to 12,000 for the week ahead

Indicators

Positive week for the Tech index as its recovery continues.

MACD and RSI appear to support the recovery of the index with the former about to return to bullish territory.

The price is now near the strong downward trendline which could be broken to the upside. Unlike other occasions we now have internal indicators not overextended and in a strong recovery mode: two important factors if we want to consider a trend change.

We are bullish on the NASDAQ 100 with a short-term target of 12,000

Support at 10,400

Resistance at 12,000

DOW JONES (#DJI)

The DOW JONES index had a week up by +2.00%

For the week ahead we are in favour of a possible upside potential till 35,000

Indicators

Positive week for the American index which can now point to a further extension of the price at least up to 35,000 and then possibly reverse slightly.

MACD and RSI are positive even though the latter is now approaching the overbought area

Keep in mind that the exit from the Bollinger Bands suggests caution

Despite possible short-term upside, we remain bearish on the DOW JONES over the medium term and until the price reaches at least 31,600 the risk-reward will remain skewed in favour of further downside.

Support at 31,200

Resistance at 34,500

TADAWUL (#TASI)

TADAWUL index had a week up by +2.02%

We are in favour of a possible upside potential till 11,000 for the week ahead

Indicators

Positive week for the Saudi index which continues its recovery.

The trend reversal at 10,000 is meeting expectations and we could now assume a stretch to at least 11,000.

MACD and RSI are positive and are supporting the price action

We remain bullish on TADAWUL with a short-term target at 11,000.

Support at 10,000

Resistance at 11,200

FTSE ADX GROWTH MARKET INDEX (#FADGI)

FTSE ADX index had a week up by +0.13%

For the week ahead we favour a consolidation in the 10,000-10,400 area

Indicators

A week of slightly to the upside which sees the price respecting the bearish trendline that began in December

Continued swings near the 50-day average (yellow line) could pave the way for a re-test of 10,600.

MACD and RSI mirror the price action and are both very close to going back into bullish territory.

Specifically, we prefer to wait for a consolidation in the 10,000 -10,400 area and then consider long setups: even a possible retracement to 9,900 could offer interesting opportunities.

We currently remain neutral on the FTSE ADX with a short-term upside bias.

Support at 9,900

Resistance at 10,750

DUBAI FINANCIAL MARKET GERNAL INDEX (#DFMGI)

DFM index had a week up by +0.65

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 fluctuate within the same trading range of 3,300-3,400, giving no particular direction in the short to medium term.

MACD and RSI are also neutral with the latter slipping into bearish territory.

We currently remain neutral on DFMGI waiting for a break of one of the two levels at 3,300 or 3,400

Support at 3,270

Resistance at 3,500

OTB Global Investments

15 January 2022