Weekly market brief: 2 - 6 January 2023

Financial index	Current price	Forecast	S1	R1	S2	R2
​FTSE100	7,496	Cons./ Bearish	7,200	7,600	7,100	7,670
FTSEMIB	23,665	Consolidation	22,500	24,850	21,000	25,500
DAX 40	13,857	Consolidation	13,100	14,550	12,650	15,000
S&P 500	3,839	Cons./ Bullish	3,750	4,100	3,600	4,180
NASDAQ 100	10,939	Cons./ Bullish	10,400	12,000	10,000	12,700
DOW JONES	33,147	Cons./ Bullish	31,200	34,500	30,200	35,000
TADAWUL	10,478	Cons./ Bullish	10,000	11,200	9,700	11,700
FTSE ADX	10,211	Consolidation	9,900	10,750	9,680	11,000
DFM	3,336	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 -0.81%

For the week ahead we are in favour of a possible consolidation in the 7,400-7,500 area

Indicators

Slightly negative week that sees the price remaining above the 5-day average: a positive short-term indicator, even if we believe that the seasonality of the British index will continue to bear witness.

MACD and RSI are still in positive territory

An eventual re-test of the 7,600 is still on the table. At the same time it is important to underline how the British index has repeatedly behaved on regular pattern: recovery following a rebound on the 50-day average (yellow line), to then cut back gains in favour of more marked declines. Proof of that are the periods of January - February 2022 and April - May 2022.

We remain bearish on the FTSE 100 despite a possible short-term upside as risk/reward continues to remain in favour of a test of 7.200-7.100.

Support at 7,150

Resistance at 7,600

FTSEMIB (#FTSEMIB)

FTSEMIB index had a week down by -1.07%

For the week ahead we favour a consolidation in the 24,000-23,600 area

Indicators

Bearish week for the Italian index which continues to fluctuate on the 50-day average (yellow line).

If from a short-term perspective we believe there may be the conditions for a recovery of strength, in the medium term we expect a bearish continuation initially at 22,400 and then continuing till 21,000.

MACD and RSI seem to hint at a possible bullish rebound

Risk/reward continues to be skewed to the downside, without excluding quick upsides.

We remain bearish on the FTSEMIB: November's strong draws have only now begun a retracement phase and we believe that once the 50-day average is cleared at 23,400, the price will continue lower to at least 22,500.

Support at 22,500

Resistance at 24,850

DAX (#DAX)

DAX index had a week down by -0.82%

For the week ahead we favour a consolidation in the 13,900 - 14,100 area

Indicators

Consolidation week for the German index that seems to want to back-test the previous breakout area.

Indeed, the 14,200 level could be a possible intermediate resistance.

MACD and RSI after a bearish phase now seem ready to support a move to the upside.

In the very short term, the German index could give rise to bullish swings which, in our opinion, however, would not go beyond 14,550. The overall scenario we believe is now positioned towards short-medium term declines.

We remain bearish on the DAX and in favor of further market declines. In the short-term we believe there may be a chance for a recovery at least to the breakout point at 14.200 to then continue lower.

Support at 13,100

Resistance at 14,550

S&P500 (#SPX)

The S&P500 had a week down by -0.14%

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

Indicators

Bearish week which saw the price stay below the 50-day average (yellow line)

The continued price action near the bottom of the Bollinger Band seems to suggest short-term upside which we believe can go as far as the previous breakout area at 3,900.

MACD and RSI after a bearish phase could support the index in a short-term bullish phase.

We are bearish on the S&P 500, despite a possible recovery of strength we prefer to wait for further market reversals until at least 3,650.

Support at 3,750

Resistance at 4,100

NASDAQ 100 (#NDX)

NASDAQ 100 index had a week down by -0.42%

We are in favour of a possible upside move to 11,500 for the week ahead

Indicators

Negative week for the Tech index which is now near the October - November lows'.

The continuous swing close to the Bollinger band seems to suggest possible rises to at least 11,500.

MACD and RSI after a bearish phase now seem to lean towards a positive price action, especially looking at the RSI which is now almost oversold.

We are bullish on the NASDAQ 100 in the short term: the current exit from the Bollinger Bands seems to suggest a slight recovery in vigour and then, in our view, continue the bearish swing in the medium term.

Support at 10,400

Resistance at 12,000

DOW JONES (#DJI)

DOW JONES index had a week down by -0.17%

For the week ahead we favour a consolidation in the 33,000 - 33,500 area

Indicators

A week of substantial consolidation which saw the price remain on the 50-day average (yellow line).

We believe a plausible scenario is to back-test the previous breakout area at 33,500 and then continue lower.

MACD and RSI are slowing down but seem to be favouring a slight recovery for now.

We remain bearish on the DOW JONES and until the price reaches at least 31,600 the risk/reward will remain skewed in favour of further downsides.

Support at 31,200

Resistance at 34,500

TADAWUL (#TASI)

TADAWUL index had a week up by +2.57%

We are in favour of a recovery to at least SAR 10,750 for the week ahead

Indicators

Positive week for the Saudi index which seems to want to start an upward reversal

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. Both indicators have started a slight reversal to the upside.

At the moment we prefer to remain neutral on the Tadawul. The strong downside extension makes today's swings very interesting, at the same time we believe it is worth waiting for a consolidation followed by price reversal above at least the 10,550 - 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 -0.92%

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

Indicators

A week of slight declines 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 again.

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 +0.22%

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 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

31 December 2022