Weekly market brief: 17 -21 May 2021


FTSE 100 (#UKX)

The FTSE had a negative week down -1.45% where it managed to reconcile with the 50MA to then bounce back at a strong level of resistance.

For the week ahead, if the #UKX managed to stay above the support at 7,035 we might see a continuation to the upside at least until 7,100. Alternatively, if it starts to close below current support we will target 6,950.


Indicators

From a technical perspective, we confirm the bullish context given the latest re-test of the 50MA which strength even more the current trend.

The MACD crossed over but is now rapidly gaining momentum together with an RSI that is pointing to the upside.

If the index manages to stay above the 9MA, we are confident it may continue to the upside until 7,100.

Alternatively, we might se a consolidation phase between 7,000 and 6,950

To conclude, we may argue the formation of a bearish flag pattern: therefore the current support level is crucial to understand near future directions.

Support at 7,035 and resistance at 7,145


FTSEMIB (#FTSEMIB)

The FTSEMIB had a volatile week up +0.13% where it touched once again the strong level of 23,975 to then bounce back.

For the week ahead, at the current level the #FTSEMIB got rejected already few times: a break and close above 24,800 may lead the Index to target 25,000.

If the index will get rejected, we will aim at 24,500 before considering further moves in either directions.

Indicators

From a technical perspective, the setup is healthy and it appears to be in a long consolidation move since mid March 2021.

A break of current support or residence will surely lead to strong moves in either direction.

Considering how strong the 50MA is holding the Index, we might see soon quick moves to the upside.

The MACD is above 0, which is bullish, however is not showing a strong momentum in either directions.

The RSI is pointing to the upside even if reporting a light divergence with the price.


Support at 23,975 and resistance at 24,949


DAX (#DAX)

The DAX had a very volatile week up +0.03% where it touched once again the 14,801 level before quickly bounced back to the main area of resistance.

For the week ahead, if the index continues the upward momentum and closes above 15,500 we might see a continuation to the upside and a break of current resistance.

On the other side, a close below 15,300 may lead to further selling pressure and a retest of current support.

Indicators

From a technical perspective, the further bounce from the 50MA of this week confirmed the very bullish trend. In addition, it also managed to close above the 9MA which may give the necessary strength to break current resistance.

The MACD is curving up together with an RSI that is pointing to the upside.

Given the strong last moves, we might see a re-test of the 9MA before keep moving to the upside.

Support at 15,135 and resistance at 15,510


S&P 500 (#SPX)

The S&P 500 had a negative week down -1.29% where it managed to retrace from all time high and found strong support at 4,078.

For the week ahead, if the #SPX manages to stay above 4,170 we will target 4,220. On the contrary, a close below such level will lead us to aim at 4,129.

The trend remains bullish however it could now enter in a consolidation mode between 4,125 - 4,190.

Indicators

From a technical perspective, what really act as catalyst during the past months has been the 9MA: a close above, could lead to upside at least till 4,240.

The MACD is reversing and picturing a positive momentum, the RSI is as well pointing to the upside after touching the 40 mark.

The #SPX may well enter in a consolidation mode, floating between 4,078 and 4,190.

Support at 4,129 and resistance at 4,190

NASDAQ (#NDX)

The Nasdaq had a negative week down -1.41% founding strong support at 13,104.

For the week ahead, a close above 13,400 would confirm a continuation to the upside until 13,800. On the contrary, if the index would get rejected we will target once again the strong support at 13,404.


Indicators

From a tecnica perspective, the selling pressure got stopped at 13,104 making it a strong area of support and a good reversal point.

The #NDX is now holding at a confluence of 9MA and 50MA and at a level that acted as resistance in February 2021.

The MACD is signalling a reversal despite being below 0, which is a bearish signal, and the RSI is pointing to the upside. Looking at the RSI, it still didn’t manage to break the downward trendline: a break of it, would confirm upside potential.

As of today, we can see two scenarios taking place on the Nasdaq: either an ascending triangle or a wider horizontal channel: the week ahead may help to understand better the future moves of the index.


Support at 13,104 and resistance at 13,540

DOW JONES (#DJI)

The Dow Jones had a negative week down -1.59% retracing from all time high and founding strong support at 33,600.

For the week ahead, if the #DJI manages to hold above 34,261 we will target 34,500. On the other side, a close below current support at 34,261 would confirm further selling pressure where we will target a conservative 33,900.


Indicators

From a technical perspective, the recent pullback offered strong upside potential but is now once again back at a very weak level.

The MACD is still positive and well above 0 confirming the bullish trend of the #DJI together with the RSI that re-tested the 45 level and bounce back from it.

Giving the formation of the last two trading candles, we might be more in favour of a short term consolidation move between 33,750 and 34,500: this would allow the 50MA to hold strong as support level as well to avoid divergence between RSI and price.


Support at 34,261 and resistance at 34,800

OTB Global Investments

16 May 2021

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