Weekly market brief: 26 - 30 December 2022

Financial index	Current price	Forecast	S1	R1	S2	R2
​FTSE100	7,496	Bearish/ Cons.	7,200	7,600	7,100	7,670
FTSEMIB	23,920	Bearish/ Cons.	22,500	24,850	21,000	25,500
DAX 40	13,971	Bearish/ Cons.	13,100	14,550	12,650	15,000
S&P 500	3,844	Bearish/ Cons.	3,750	4,100	3,600	4,180
NASDAQ 100	10,985	Cons./ Bullish	10,400	12,000	10,000	12,700
DOW JONES	33,203	Bearish/ Cons.	31,200	34,500	30,200	35,000
TADAWUL	10,232	Cons./ Bullish	10,000	11,200	9,700	11,700
FTSE ADX	10,306	Consolidation	9,900	10,750	9,680	11,000
DFM	3,316	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 +1.92%

For the week ahead we are in favour of a possible consolidation in the 7,400-7,500 area

Indicators

Positive week which sees the price returning to a strong intermediate resistance area.

The continued hold above the 50-day average (yellow line) is a positive indicator that could push the price to a possible re-test of 7.600 for the last week of 2022.

MACD and RSI mirror the price action and are both back in bullish territory.

Despite a positive swing in price, we believe that the rebound on the 50-day average can only give rise to short-term gains, to then continue downwards to at least 7.100.

We remain bearish on the FTSE 100 despite a possible short-term upside as risk/reward continues to remain in favour of a test of 7,200-7,100.

Support at 7,150

Resistance at 7,600

FTSEMIB (#FTSEMIB)

The FTSEMIB index had a week up +0.80%

For the week ahead we favour a consolidation in the 24,000-23,600 area

Indicators

Slightly positive week for the Italian index which sees the price remaining above the 50-day average.

As highlighted last week, we could now see a back-test of the previous breakout area at 24,400.

MACD and RSI seem to suggest a possible recovery of strength that could support a short-term move to the upside.

Despite an encouraging setup for the year's end, we believe that the risk/reward is now very unbalanced in favour of a medium-long term market decline.

We remain bearish on the FTSEMIB: November's strong draws have only now begun a retracement phase and we believe that once the 50-day average is cleared at 23,200, the price will continue lower to at least 22,500.

Support at 22,500

Resistance at 24,850

DAX (#DAX)

The DAX index had a week up by +0.34%

For the week ahead we favour a consolidation in the 13,900 - 14,100 area

Indicators

Consolidation week for the German index that seems to want to back-test the previous breakout area as the 14,200 level could act as possible intermediate resistance.

MACD and RSI after a bearish phase now are set to support any pressure to the upside.

In the very short term, the German index could give rise to bullish swings which, in our opinion, however, would not go beyond 14,550. We believe the overall scenario is now positioned towards short- to long-term declines.

We remain bearish on the DAX and in favour of possible market reversals. In the short-term we believe there may be a chance for a recovery at least to the breakout point at 14,200 and then continue lower.

Support at 13,100

Resistance at 14,550

S&P500 (#SPX)

The S&P500 had a week down by -0.20%

For the week ahead we are in favour of a possible consolidation on the 3,900 area

Indicators

Bearish week that saw the price fall below the 50-day average (yellow line)

The continued swings near the Bollinger Bands' bottom seem to suggest short-term upside which we believe can go as far as the previous breakout area at 3,900.

MACD and RSI after a bearish phase could support the index in a short-term bullish phase.

We are bearish on the S&P 500, despite a possible recovery of strength we prefer to wait for further market reversals until at least 3,650.

Support at 3,750

Resistance at 4,100

NASDAQ 100 (#NDX)

The NASDAQ 100 index had a week down by -2.30%

We are in favour of a possible upside till 11,500 for the week ahead

Indicators

Negative week for the Tech index which is now near the October - November lows'.

The continued swings close to the Bollinger band seems to suggest possible upsides to at least 11,500.

MACD and RSI after a bearish phase now seem to lean towards a bullish price action.

We are bearish on the NASDAQ 100. The current breakout of the Bollinger Bands seems to suggest a slight pick up of momentum and then, in our view, continued bearish trend].

Support at 10,400

Resistance at 12,000

DOW JONES (#DJI)

The DOW JONES index had a week up by +0.86%

For the week ahead we favour a consolidation in the 33,000 - 33,500 area

Indicators

A week of substantial consolidation which saw the price remain above the 50-day average (yellow line).

We believe a plausible scenario is to back-test the previous breakout area at 33,500 and then continue lower.

MACD and RSI are slowing down but seem to be favouring a slight recovery for now.

We remain bearish on the DOW JONES and until the price reaches at least 31,600 the risk reward will remain skewed in favour of further downsides.

Support at 31,200

Resistance at 34,500

TADAWUL (#TASI)

TADAWUL index had a week down by -0.73%

We are in favour of a recovery to at least SAR 10,500 for the week ahead

Indicators

Consolidation week for the Saudi index which seems very close to a possible upward reversal.

As happened in November 2021, the strong distance from the 50-day average (yellow line) could suggest a possible short-term recovery. At the same time it is important to stress that the first obstacle to overcome remains the 9-day average (red line), which has played the role of dynamic resistance in recent months

MACD and RSI are in oversold territory, decreasing the possibility of further short-term downside. MACD looks like a bullish reversal is on the line.

At the moment we prefer to remain neutral on the Tadawul. The strong downside extension makes today's price action very interesting, at the same time we believe it is worth waiting for a consolidation followed by price reversal at least above the 10,550 - 10,600 level.

Support at 10,000

Resistance at 11,200

FTSE ADX GROWTH MARKET INDEX (#FADGI)

FTSE ADX index had a week down by -0.21%

For the week ahead we favour a consolidation in the 10,350 -10,400 area

Indicators

Consolidation week that sees the price reverse its trend after a long downward series.

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 swing and are both very close to going back into bullish territory again.

Specifically we prefer to wait for a consolidation in the 10,350-10,400 area before considering long setups.

We currently remain neutral on the FTSE ADX with a short to medium term upside bias.

Support at 9,900

Resistance at 10,750

DUBAI FINANCIAL MARKET GERNAL INDEX (#DFMGI)

DFM index had a week down by -0.39%

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 both seem to suggest an imminent recovery; while the former indicator is essentially flat, the latter is now moving away from the oversold area.

We currently remain neutral on DFMGI waiting for a break of one of the two levels at 3,330 or 3,400

Support at 3,270

Resistance at 3,500

OTB Global Investments

26 December 2022