Weekly market brief: 23 - 27 January 2023

Financial index	Current price	Forecast	S1	R1	S2	R2
​FTSE100	7,770	Cons./ Bearish	7,400	7,900	7,200	7,800
FTSEMIB	25,775	Consolidation	23,400	25,900	22,400	26,500
DAX 40	15,033	Consolidation	13,800	15,200	13,400	15,500
S&P 500	3,972	Cons./ Bullish	3,750	4,100	3,600	4,180
NASDAQ 100	11,619	Cons./ Bullish	10,400	12,000	10,000	12,700
DOW JONES	33,375	Cons./ Bullish	31,200	34,500	30,200	35,000
TADAWUL	10,713	Cons./ Bullish	10,000	11,200	9,700	11,700
FTSE ADX	10,186	Consolidation	9,900	10,750	9,680	11,000
DFM	3,352	Cons./ Bullish	3,270	3,500	3,100	3,730

S: Support R: Resistance

FTSE 100 (#UKX)

FTSE100 index had a week down by -0.94%

For the week ahead we are in favour of a possible retracement to the 7,650 area

Indicators

Slightly negative week that saw the British index close below the 5-day average for the first time from the beginning of 2023. It is still too early that this could be the beginning of a more important retracement, but looking at the internal indicators, the conditions seem to be in place.

At the moment we do not exclude a back-test of the previous breakout area and then continue downwards

MACD and RSI, left the overbought areas, are now reversing to the downside.

We believe that risk-reward is still in favour of short-medium term downsides with the first target at 7,650 and then, in our view, proceed further downside to at least 7,400-7,300.

We remain bearish on the FTSE100 given the over-extension to the upside

Support at 7,400

Resistance at 7,900

FTSEMIB (#FTSEMIB)

FTSEMIB index had a week down by -0.03%

We are in favor of a consolidation in the 25,000 area for the week ahead

Indicators

A week of substantial consolidation which we believe could give rise to a more substantial retracement.

MACD and RSI are very extended on the upside and in negative divergence with the price action: the first in fact has histograms in strong contraction and close to a downward reversal.

We remain neutral on the FTSEMIB with an expectation of short-medium term downsides

Support at 23,400

Resistance at 25,900

DAX (#DAX)

DAX index had a week down by -0.36%

We are in favour of a consolidation in the 14,600 area for the week ahead

Indicators

Consolidating week for the German index which continues to be near the strong resistance level at 15,200

MACD and RSI are extended 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 crossover.

A plausible short-term target we believe to be 14,400 which can then play as a reversal point or as a first step in view of a more substantial retracement.

We remain bearish on the DAX40 and waiting for a market reversal.

Support at 13,800

Resistance at 15,200

S&P500 (#SPX)

The S&P500 had a week down by - 0.66%

For the week ahead we are in favour of a possible upside to 4,100

Indicators

Positive week in which the price remains above the 50-day average (yellow line).

MACD and RSI are recovering and seem to support the price action

The price is once again slightly above the downtrendline that started in 2022 and given the positive momentum, we do not exclude a test of the 4,100 area.

Unlike other occasions, the inside indicators are not overextended to the upside thus leaving the door open for further upside.

At the same time, a dip below the 50-day average (yellow line) could open the door to a new bearish leg.

We are cautiously bullish on the S&P 500 from a short-term perspective.

Support at 3,750

Resistance at 4,100

NASDAQ 100 (#NDX)

The NASDAQ 100 index had a week up +0.67%

We are in favour of a possible continuation till 12,000 for the week ahead

Indicators

Positive week for the Tech index as its recovery continues.

MACD and RSI appear to support the index upside with the former about to return to bullish territory.

The price is now near the strong downward trendline which could be indeed broken. Unlike other occasions we now have internal indicators not overextended and in a strong recovery: two important factors if we want to consider a trend change.

We are bullish on the NASDAQ 100 with a short-term target of 12,000

Support at 10,400

Resistance at 12,000

DOW JONES (#DJI)

The DOW JONES index had a week down by -2.70%

We are in favour of a possible backtest of 34,000 for the week ahead

Indicators

Negative week for the industrial index which sees the price return below the 50-day average (yellow line)

MACD and RSI are now back in neutral territory.

The strong recovery on Friday could suggest a possible recovery to the breakout area at 34,000 and then possibly reverse back down again.

To monitor carefully is the intermediate support at 32,800 which almost seems to play the role of neckline in a "Head and Shoulders" pattern

Despite possible short-term upside, we remain bearish on the DOW JONES over the medium term and until the price reaches at least 31,600 the risk-reward will remain biased in favor of further downside.

Support at 31,200

Resistance at 34,500

TADAWUL (#TASI)

TADAWUL index had a week up by +0.54%

We are in favour of a possible extension to 11,000 for the week ahead

Indicators

Positive week for the Saudi index which continues its recovery.

The trend reversal at 10,000 is meeting expectations and we could now assume a stretch to at least 11,000.

MACD and RSI are positive and are supporting the price action

We remain bullish on TADAWUL with a short-term target at 11,000.

Support at 10,000

Resistance at 11,200

FTSE ADX GROWTH MARKET INDEX (#FADGI)

FTSE ADX index had a week down by -0.23%

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 remaining above 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 a 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 +0.86%

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 are also neutral with the latter slipping into bearish territory.

We currently remain neutral on DFMGI waiting for a break of one of the two levels at 3,300 or 3,400

Support at 3,270

Resistance at 3,500

OTB Global Investments

22 January 2022