Weekly market brief: 21 - 25 February 2022

Financial index	Current price	Forecast	S1	R1	S2	R2
​FTSE100	7.513	Bearish/ Cons.	7.405	7.520	7.295	7.600
FTSEMIB	26.506	Bearish/ Cons.	26.750	27.406	26.000	27.887
DAX 40	15.042	Bearish/ Cons.	15.040	15.450	14.815	15.736
S&P 500	4.349	Bearish/ Cons.	4.245	4.535	4.245	4.720
NASDAQ 100	14.009	Bearish/ Cons.	13.855	14.426	13.445	15.330
DOW JONES	34.079	Bearish/ Cons.	33.600	34.200	33.260	35.515

S: Support R: Resistance

FTSE 100 (#UKX)

The FTSE 100 ended the week down -0.59%

For the week we are in favour of a consolidation at 7,450

Indicators

Looking at last month price action, we can see the strong support role played by the 7,520 level: on January 21, the break of this level led to strong short-term volatility.

We cannot know if the market will react in the same way, but we can certainly understand that the bearish pressure is still very present on the British index: the lower highs of the past week suggest a descending triangle, with an imminent break of the level at 7.520.

MACD and RSI both point downward, after last week's negative divergence: with the second indicator already below the 50 line (bearish).

For the week ahead we are in favor of a bearish continuation which we believe will find consolidation around the 50MA.

Support at 7.405

Resistance at 7,520

FTSEMIB (FTSEMIB)

The FTSEMIB had a week up + 0.86%

For the week we could expect retracement to at least 26,000

Indicators

Indecision that still remains the protagonist on the Italian index even though we believe that this week we could see strong fluctuations in both directions.

The 50-day average, broken in January 2022, again played the role of resistance by pushing the price down.

On the index we can see the respect of two trendlines, one downward and one upward, which have been respected in recent months: the numerous points of intersection between price and trendline make the latter very "strong". Consequently, the breaking of one of the two will lead to strong fluctuations.

A similar scenario can also be seen in the RSI which is also close to a breaking point. On the other hand, the information provided by the MACD is more neutral, reflecting the indecision of recent weeks.

We remain in favor of short-term bearish pressure which will see the FTSEMIB initially test 26,000

Support to 26,000

Resistance at 26,750

DAX (#DAX)

The DAX ended the week down -0.29%

For the week ahead, we expect a consolidation between 15,100 - 14,900

Indicators

The German index has a certain regularity in its fluctuations, having been on a horizontal channel since May 2021.

We can see a marked bearish trend line in existence since early January 2022 which has been respected again in the week ahead.

MACD and RSI both seem to want to reverse to the downside.

In the short term, we believe that the German index can consolidate downwards between 15,100 and 14,900 and then eventually reverse to the upside and test the bearish trendline again.

Support for 15.040

Resistance at 15,450

S&P500 (#SPX)

The S&P 500 had a week down by -1.41%

For the coming week, the index could retrace at least to 4,300

Indicators

The bearish pressure has now led the S&P500 to an interesting area that could mark the start of a stronger bearish downtrend or a short-term bullish reversal.

The area of 4.300 -4.350 has in fact played a supporting role in the past for bullish recoveries: July and October 2021 and the most recent at the end of January 2022.

MACD and RSI if on the one hand confirm the bearish moment, on the other they report higher lows if we compare the candles of Friday and January 28, 2022: two candles are obviously not enough to draw a rebound, but they help us to understand the importance of this price range.

Staying in favour of a retracement till 4,300, we will monitor how the price will react within this range.

Support for 4,245

Resistance at 4.376

NASDAQ 100 (#NDX)

The NASDAQ ended the week down -1.64%

For the week ahead, we expect a possible consolidation between 14,000 - 13,700

Indicators

Despite still strong bearish pressure on the technology index, we could see a possible consolidation in the week ahead.

In fact, if we compare the fluctuations on Friday with those at the end of January 2022 we can see a slight positive divergence between price and indicators.

MACD and RSI, despite the fact that we are clearly on the downside present increasing lows when compared with the previous levels: two price moments are not enough to support the thesis of a rebound in the short term, but they are enough to make us understand the importance of the level on which the index is found.

In addition, we can also see a marked distance from the 9-day average which has led to short-term upside in the past.

Although still in favor of a bearish continuation at the beginning of the week, we could expect a bottoming with a subsequent rise by the end of February.

Support at 13,855

Resistance at 14,426

DOW JONES (#DJI)

DOW JONES had a week down by -0.68%

For the coming week we expect a consolidation between 34,200 - 33,800

Indicators

I continue bearish for the DJI which we believe may slow down near the strong support area between 33,600 and 34,200 that has supported the index since April 2021.

MACD and RSI both bearish, seem to indicate a positive divergence with the price with the levels of the end of January.

Although the price is not offering inversion formations, it is plausible to expect a consolidation as happened in the past: only the break from a short consolidation phase can offer more directional information for the short-medium term.

To conclude, we expect a bearish continuation at the start of the week and then gradually improve towards the end of February.

Support to 34,200

Resistance 35,515

OTB Global Investments

20 February 2022