Weekly market brief: 21 - 25 June 2021

FTSE 100 (#UKX)

The FTSE 100 had a negative week down -2.33%.

For this week the FTSE could recover ground to 7.080 and then test 7,020 again.

Indicators

MACD crossed strongly to the downside followed by a RSI, which after the divergence is now at the 43 level.

The bearish wedge exploded on Friday bringing the index to reconcile with the 50MA. Given the sharp fall, the # UKX could bounce off the 50 and test the 7.080 level again and then proceed to the downside.

However, a second scenario could occur, if the FTSE breaks the barrier of the 50MA . This would imply a test of the 6.900 level.

For the moment we are more in favor of a rebound on the 50MA, also consider the recent weakening of the pound: a weak GBP / USD has generally led to bullish movements in the FTSE 100.

Support at 6,980

Resistance at 7.122

FTSEMIB (#FTSEMIB)

The FTSEMIB had a negative week down by -2.32%

For the week ahead, the index could retest the 25.500 level and then continue downward. A missed rebound will bring the FTSEMIB straight to 24.930.

Indicators

MACD finally crossed to the downside followed also by a strong bearish move in the RSI.

At the moment, the FTSEMIB has stopped at an intermediate support area which could lead the index to a short rebound. The most important area, and our target for any long positions, is the one at 24.930. Level of the 50MA and which has often played the role of strong support for bullish momentum.

Support at 25,554

Resistance at 24.930

DAX (#DAX)

The DAX ended the week down -2.20%.

For the week we expect a rebound to 15,400 which could lead the DAX to test 15,540 again.

If it fails to reverse the direction, the index will point to 15,200

Indicators

MACD and RSI have both turned to the downside after a phase of consolidation. In particular, the RSI stopped at a strong level of internal support.

The bearish descent stopped at the 50-day average, a level that has often played the role of support for bullish momentum.

Given the proximity to the resistance level, we will wait to see how the DAX performs on the 50-day average: a rebound could lead to strong bullish swings. Conversely, a close below it will lead the index to test the support at 15.135.

Support at 15.135

Resistance at 15.540

S&P500 (#SPX)

The S&P 500 had a negative week down by -1.77%.

For the week ahead, we believe in a bearish continuation to 4.130.

Indicators

The MACD crossed to the downside along with the RSI which, having left the divergence with the price, stopped at a strong internal support level.

The close below the 50MA could lead the index to continue the bearish fluctuation up to the current support. This theory would be nullified if the # SPX managed to close above 4.190 at the beginning of the week.

A test of the current support could offer an excellent level for long positions.

Support at 4.125

Resistance at 4.190

NASDAQ 100 (#NDX)

The NASDAQ had a positive week up + 0.48%.

We expect a retracement to 13.850 - 13.800 for the coming week and then continue higher.

Indicators

MACD signals strong positive momentum albeit slight slowdown. The loss of strength is also supported by a descending RSI.

We expect a retracement to the 50-day average and then continue the bullish momentum. The trend is strongly positive and also seems to want to create an ascending triangle.

Support at 13,540

Resistance at 14.123

DOW JONES (#DJI)

DOW JONES had an additional week down -3.23%

For the coming week we expect a consolidation at 33.240 and then move higher to 33.671

Indicators

The MACD is strongly bearish and is almost exceeding the 0 threshold, which would confirm a bearish momentum.

RSI has reached the oversold zone, the last time was October 29, 2020.

The index is now in close to the 100-day average, a strong support area

Given the strong bearish extension, we are in favor of a gradual recovery of the #DJI with the first target at the current resistance

Support at 33.237

Resistance 33.671

OTB Global Investments

19 June 2021