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Weekly market brief: 20 - 24 February 2023


Financial index

Current price

Forecast

S1

R1

S2

R2

​FTSE100

8,004

Cons./ Bearish

7,400

8,050

7,200

8,160

FTSEMIB

27,715

Cons./ Bearish

24,800

27,900

24,000

28,400

DAX 40

15,482

Cons./ Bearish

14,200

15,500

13,800

15,800

S&P 500

4,079

Consolidation

3,750

4,200

3,600

4,300

NASDAQ 100

12,358

Consolidation

11,000

12,700

10,500

13,300

DOW JONES

33,826

Consolidation

31,200

34,500

30,200

35,000

TADAWUL

10,548

Consolidation

10,000

11,200

9,700

11,700

FTSE ADX

9,977

Consolidation

9,680

10,300

9,680

11,000

DFM

3,457

Consolidation

3,270

3,500

3,100

3,730

S: Support R: Resistance

FTSE 100 (#UKX)

The FTSE100 index had a week up by +1.55%

For the week ahead we are in favour of a possible consolidation in the 7,900 area


Indicators

Positive week for the British index that saw the price holding at all time high


The strong upward extension makes us remain skeptical and we believe that the surrounding scenario is in any case very fragile: at the same time it is advisable not to fight the strong price action but rather wait for a break of the 5MA that has been holding the price since the end of 2022.


MACD and RSI keep remaining in overbought territory and in a strong negative divergence with the price. Important to notice that they have reached very high readings also on a weekly basis.


The risk-reward is unbalanced in favour of downsides but we believe it is appropriate to wait for price signals: specifically, the three obstacles to overcome on the downside are the 9-day average (red line) and the price level at 7.800 in the very short term term. Then it will be necessary to see how the price will behave near the 50-day average (yellow line) to forecast next moves.


We remain bearish on the FTSE100 given the over-extension to the upside and we rather wait for a first dip below 7,800.


Support at 7,400

Resistance at 8,050



FTSEMIB (#FTSEMIB)

The FTSEMIB index had a week up by +1.77%

We are in favour of a consolidation in the 27,000 area for the week ahead


Indicators

Positive week for the Italian index that saw the price remaining on the 2021 highs’.


Despite a strong upside price action, internal indicators seem to point to fragility. However, at this precise moment is better not to fight price action as the 5MA has acted as dynamic support since December 2022.

We rather wait for a break below the short term Moving Average that could trigger a risk off move to the downside.

MACD and RSI are very extended to the upside and we remain sceptical on the possibility to proceed further, considering also the strong supply area at 28,000.


The risk/reward is unbalanced and in favour of a possible market reversal if we assume 28,000 as the medium-term target.


We remain neutral on the FTSEMIB, the upward move in recent months is positive and seem to mark a change of pace. At the same time, we believe it is necessary to wait for a reversal followed by consolidation before considering long setups.


Support at 24,800

Resistance at 27,900


DAX (#DAX)

The DAX index had a week up by +1.14%

We are in favour of a consolidation in the 15,300 area for the week ahead


Indicators

Positive week for the German index as the price keep consolidating at 15,500.


A decrease of volumes for the past two weeks together with a price that keeps remaining on the upper part of the Bollinger Band could lead the price to reverse to the downside.

At the same time, we believe it’s important not to fight price action but rather wait for a break of 15,300 (to the downside) or 15,600 (to the upside).


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. It is important to note that the MACD appears to be close to a bearish reversal.

A plausible medium-term target we believe to be 15,500 which can then play as a reversal point or first step in view of a more substantial retracement.


We remain neutral on the DAX40 and waiting for a break below 15,300


Support at 13,800

Resistance at 15,500


S&P500 (#SPX)

The S&P500 index had a week dow by -0.28%

We are in favour of a possible consolidation between 4,050 - 4,100 for the week ahead


Indicators

Consolidation week that saw the price falling below the 20MA (blue line) for the first time since the beginning of the year.

At the moment we believe we’ll need to see what happen on the backtest of the 4,100: a rejection could open the way to more downside pressure.

If the price will easily recover the 4,100 mark we could see a bullish continuation to 4,200 in the short term.


MACD and RSI, after a long upward phase, are curving to the downside with the second one near the 50 threshold area.


The recent bull run has been positive but we would feel much more comfortable if the price could manage to retrace at least to 3,900 before evaluating long setups.


We are neutral on the S&P 500 and waiting for retracements.


Support at 3,750

Resistance at 4,200




NASDAQ 100 (#NDX)

The NASDAQ 100 index had a week up by +0.43%

For the week ahead we are in favour of a possible consolidation in the 12,000 - 12,250 area


Indicators

Positive week for the Tech index that saw the price gapping down on the last trading day of the week.

The many points of conjunctions since February are showing a consolidation phase for the Tech index, therefore we believe it’s appropriate to wait for a break to either direction.


MACD and RSI are positive but slowing down with the second close to bearish territory,


If in the medium term, the price action of the last few months could be positive, in the short term we believe that the best strategy is to remain neutral and/or create liquidity. If indeed we are seeing a change of pace, we would rather wait for a backtest of previous breakout points than chase the price to the upside.


We are neutral on the Nasdaq with a slight bias towards a backtest of the 11,600 area.


Support at 11,000

Resistance at 12,700



DOW JONES (#DJI)

DOW JONES index had a week down by -0.13%

We are in favour of a consolidation in the 33,600 area for the week ahead


Indicators

Neutral week for the industrial index which sees the price consolidate around the 50-day average (yellow line).


We expect strong volatility once we break the 33,600 or 34,300 levels following a catalyst event


MACD and RSI are essentially neutral even if they have slowed sharply from November till now.


We remain neutral on DJI with a short-term downside bias.


Support at 31,200

Resistance at 34,500



TADAWUL (#TASI)

TADAWUL index had a week up by +1.31%

We are in favour of a possible continuation till 10,800


Indicators

Positive week for the Saudi index that sees the price holding above the 50MA.


MACD and RSI have reversed to the upside and they are now approaching positive territory


At the same time, it is important to notice that a fall below 10,400 could pave the way for further downside pressure.

After a bullish phase, we are back to neutral on TADAWUL and waiting for price to recover ground.


Support at 10,000

Resistance at 11,200



FTSE ADX GROWTH MARKET INDEX (#FADGI)

FTSE ADX index had a week down by -0.46%

For the week ahead we could see a regain of the 10,000 mark


Indicators

Week of consolidation after the recovery of the last weeks


Before considering a possible long position, we believe that the price must first consolidate: according to previous swings, the current intermediate support level seems to be an area for further upside..

MACD and RSI are now very extended to the downside with the latter recovering slightly.


We are bullish on the FADGI but prefer to wait for an initial phase of consolidation which seems to be ongoing.


Support at 9,680

Resistance at 10,300


DUBAI FINANCIAL MARKET GERNAL INDEX (#DFMGI)

DFM index had a week up by +0.11%

For the week ahead we are in favour of a possible consolidation within the 3,430-3,460


Indicators

Positive week for the DFM which is now consolidating after breaking the long trading channel in place since October 2022.

MACD and RSI have now reached overbought condition and could anticipate weakness in the index.


After the positive upside move, we believe the DFMGI will backtest previous break-out points to then possibly continue upwards.

After the bullish momentum, we remain neutral on the DFM and await for internal indicators to retrace.


Support at 3,270

Resistance at 3,500


OTB Global Investments

19 February 2023

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