💡16 - 20 November 2020
📈 FTSE 100: 6,351.45 (+ 0.48%)
📈 DAX: 13,137.25 (-0.25%)
📈 S&P 500: 3,557.54 (- 1.19%)
📈 Nasdaq 100: 11,854.97 (+ 0.06%)
📈 Dow Jones: 29,263.48 (- 1.38%)
FTSE 100 (#UKX)
This week the FTSE 100 was initially bumped up by Moderna (NASDAQ: #MRNA) on positive vaccine news: on Monday 16th we reached 6460, few point away from June’s high.
However, for the rest of week FTSE has been posting lower highs closing at 6,351.5.
From a technical perspective, we can start to map the support at 6,290 and resistance 6,387: the index has indeed moving in this channel since the 11 November 2020.
RSI is at 66 coming down from the overbought territory and the MACD, however over 0, is slopping down almost telling us that the trend is loosing its strength.
The candle reported on Friday is almost an inverted hammer one, signalling that a possible downward move is imminent.
For the week, we would proceed with caution: a test of the support level at 6,290 is very much likely. If higher volumes will be reported on the break, further downside will be possible.
We are keen to consider, if higher volumes will be reported, there will be a pullback testing the 6,150-6,180 level before reversing to the upside: we shall keep an eye on the 50MA moving up.
The German index has been moving near the higher end of the channel (approx. 12,300 - 13,300) for the whole week.
Few analysts are pointing at a bull flag formation however we remain skeptical: the run up of the last couple of week left we can define it as “to good to be true”.
The index is loosing its strength and reporting lower highs
From a technical perspective, MACD is showing sign of a weakening trend with the 12EMA getting closer to the 26EMA. The RSI is still at 60.
We remain still on our convictions: for the week we would expect a re-test of the 50MA level at 12,750-12,800
S&P 500 (#SPX)
The S&P 500 this week did it again: retest the higher end of the megaphone pattern at 3,624 and retraced back for the rest of the week.
Considering how few town in the US are going back to lockdown measures, we are keen to consider that downsides are coming soon.
From a technical perspective, the #SPX closed at almost the high of 12 October (support once broken becomes resistance) with a strong red bearish candle.
MACD is sloping down with the 12 EMA getting closer to the 26 EMA and RSI moving down, now at 56.
For week, considering the above indicators, we would expect a pullback to 3,450 - 3,500 level.
Dow Jones (#DJI)
The Dow tried and failed, again, to reach the 30,000 and closed the week with a very strong red bearish candle almost touching the support level at 29,200.
From a technical stand point, based on the red bearish candle and MACD that is moving to the downside: we see a momentum that is loosing its steam.
Compared to last week, the RSI is more in line with the overall picture byreporting divergence between 3 September 2020 and 9 November 2020 level.
We believe that the gab will be filled in the near future: therefore we expect a pullback to 28,500 before considering any kind of long position.
OTB Global Investments
London, 22 November 2020