Weekly market brief: 24 - 28 October 2022

Financial index	Current price	Forecast	S1	R1	S2	R2
FTSE100	6,969	Cons./ Bullish	6,850	7,200	6,700	7,400
FTSEMIB	21,567	Cons./ Bullish	20,700	22,800	20,000	25,000
DAX 40	12,730	Cons./ Bullish	12,200	13,600	11,500	14,000
S&P 500	3,752	Cons./ Bullish	3,550	3,900	3,400	4,100
NASDAQ 100	11,310	Cons./ Bullish	10,400	12,000	10,000	12,700
DOW JONES	31,082	Cons./ Bullish	29,170	32,000	28,150	33,250
TADAWUL	11,963	Consolidation	11,250	12,270	10,900	12,650
FTSE ADX	10,113	Cons./ Bullish	9,615	10,200	9,160	10,500
DFM	3.398	Cons./ Bullish	3,270	3,500	3,100	3,730

S: Support R: Resistance

FTSE 100 (#UKX)

The FTSE100 index had a week up by + 1.62%

For the week ahead, we are in favour of a recovery to at least 7,150

Indicators

A week of consolidation that seems to herald a short-term uptrend: the price seems to want to get out of the tight trading range 6,850 - 7,000.

What seems desirable to expect is a break to the upside, followed by a back test of the 7,000 area. This scenario could shift the balance in favour of more sustainable upside momentum.

MACD and RSI are both recovering and appear to support the index

One of the indicators that makes us, for the moment, however, lean towards greater caution is the narrowing of the Bollinger bands: in fact, similar setups have brought strong volatility in both directions.

We remain neutral on the FTSE100, the scenario is improving and a consolidation above 7,000 could give that long-awaited confirmation.

Support at 6,850

Resistance at 7,200

FTSEMIB (FTSEMIB)

The FTSEMIB index had a week up by + 3.04%

For the week ahead we are in favour of a bullish continuation to at least 22,400

Indicators

Positive week for the FTSEMIB which seems to want to exit the tight trading range 20,400-21,700 and break to the upside the bearish trendline in place since the beginning of 2022.

Looking at past price action, we can see that the 50 moving average (yellow line) has always played the role of dynamic resistance and at the moment there are no particular indicators that suggest a different scenario.

MACD and RSI are positively up.

We are positive on the FTSEMIB but we await the overcoming of the level of 21,500-22,000 which also coincides with the 50MA: the bearish trendline is very strong and we believe that its break may require a long process and not a "simple" break to the upside.

Support at 20,700

Resistance at 22,800

DAX (#DAX)

The DAX index had a week up by + 2.36%

For the week ahead we are in favour of a bullish continuation to 13,000

Indicators

Positive week for the German index which saw the price reach the 50-day moving average (yellow line) which has been playing the role of dynamic resistance since the beginning of 2022.

MACD and RSI are both recovering, which is favourable for the short to medium term.

We are positive on the DAX40 but look forward to a 12,500 back-test and / or overcome of 12,750. The trend is still strongly bearish and at the moment the price is only consolidating in the wide range between 11,800 - 12,750

Support at 12,000

Resistance at 13,600

S&P500 (SPX)

The S&P500 index had a week up by 4.74%

For the coming week we are in favour of a possible recovery to at least 3,900

Indicators

A week that saw the short-term bearish trendline breaking upwards: this scenario is very positive, especially if confirmed by a back-test, it could lead to a quick test of the 3,900 level.

As already seen in the past, the SPX alternates phases of contraction with phases of expansion: the narrowing of the Bollinger bands seems to suggest that the price may be close to a strong phase of expansion and volatility.

We are positive on the S&P500 and looking forward to a consolidation above 3,800: this week's price action is very interesting but we note that the price has been substantially flat over the last month.

Support at 3,550

Resistance at 3,900

NASDAQ 100 (NDX)

The NASDAQ 100 index had a week up by + 5.78%

For the week ahead, we are in favour of a continuation to the upside till 11,600

Indicators

Positive week for the Tech index which saw the price consolidating above the 5-day moving average (red line) and which could pave the way for short-medium term rises.

The internal MACD and RSI indicators are recovering and could therefore support the index to the upside.

We are positive on the NASDAQ 100, at the same time the trading range 10,800 - 11,600 continues to be respected and the scenario remains unchanged from the end of September to today: the narrowing of the Bollinger bands confirms a strong volatility at the gates that could give rise to medium-long term long setups'.

Support at 10,400

Resistance at 12,000

DOW JONES (#DJI)

The DOW JONES index had a week up by + 4.89%

For the coming week we are in favor of a consolidation in the area of 31,000 - 31,500

Indicators

Positive week that saw the price reach the 50-day moving average (yellow line), confirming the most recent recovery in strength

MACD and RSI are both up: we note that the RSI is now at 60, a level that in the past acted as temporary resistance.

The upward exit from the Bollinger bands is positive as it seems to determine a change of pace, at the same time it is desirable to expect a slight retracement before keep moving upward. Such scenario would avoid hyper-extension setups.

We are positive on the Dow Jones and ready to consider long positions in the event of a back-test of the previous breakpoints at 30,500 - 30,700

Support at 29,170

Resistance at 32,000

TADAWUL (#TASI)

The TADAWUL index had a week up by + 4.74%

For the coming week we are in favour of a consolidation in the area of SAR 11,800 - 12,200

Indicators

A week that saw the Saudi index reverse its short-term direction on the strong support at 11.250: the series of higher lows and highs that began at the end of September is certainly a positive indicator.

A consolidation above the 50-day moving average (yellow line) could open the door for more substantial moves to the upside.

MACD and RSI describe a positive scenario although it should be noted that the latter is very close to the oversold area.

At the moment we prefer to remain neutral on the Tadawul to understand if the price will be able to consolidate in the area of 11,800 - 12,200: a similar scenario could in fact offer interesting long opportunities.

Support at 11,250

Resistance at 12,270

FTSE ADX GROWTH MARKET INDEX (#FADGI)

The FTSE ADX index had a week up by + 3.46%

For the coming week we are in favour of a consolidation in the area of 10,000

Indicators

Positive week for the ADX which sees the price test again the strong resistance at 10,200 and which, based on past price action, it is desirable to expect a slowdown rather than a break to the upside.

MACD and RSI are positive although we believe it is worth noting that both indicators are showing decreasing highs starting from August 2022, against a price that is again testing the top of the horizontal channel.

At the moment we prefer to remain neutral on the FTSE ADX, the exit from the Bollinger bands in fact makes us lean towards a possible retracement at least up to 10,000 - 9,900 which could give rise, eventually, to long setups

Support at 9,615

Resistance at 10,200