Financial index | Current price | Forecast | S1 | R1 | S2 | R2 |
FTSE100 | 7,427 | Cons./ Bearish | 7,300 | 7,570 | 7,100 | 7,620 |
FTSEMIB | 21,745 | Cons./ Bearish | 20,700 | 23,650 | 20,260 | 25,000 |
DAX 40 | 12,860 | Cons./ Bearish | 12,600 | 14,050 | 12,000 | 14,460 |
S&P 500 | 4,057 | Cons./ Bearish | 3,950 | 4,175 | 3,740 | 4,370 |
NASDAQ 100 | 12,605 | Cons./ Bearish | 12,400 | 13,500 | 11,100 | 14,255 |
DOW JONES | 32,283 | Cons./ Bearish | 32,000 | 34,000 | 30,000 | 35,400 |
S: Support R: Resistance
FTSE 100 (#UKX)
The FTSE 100 ended the week down by -1.63%
For the week ahead we could see a bearish continuation till 7,300
Indicators
Week that we believe marks the beginning of a possible market decline. The resistance area at 7.570 is once again confirmed as a strong barrier to overcome, as indeed happened throughout 2022.
MACD and RSI signal a rapid loss of strength, with the former close to fall below 0 and the latter already broken below the 50 level.
A possible target, before considering any upward trend reversals, is represented by the 50MA (yellow line)
Considering the broad parallel channel 7,100 - 7,570 in which the British index is moving, we believe that the RSI may be another factor to be carefully taken into account: in particular, an RSI in the area of 30 could signal a leading signal of exhaustion of the bearish trend.
We see GBP / USD very extended to the downside: a recovery of it could indeed bring downward pressure on the UKX
We remain neutral on the FTSE100 as we await not only further declines but also to see if the 50MA will be able to hold the bearish pressure and how the RSI will react to such price action.
Support at 7,300
Resistance at 7.530
FTSEMIB (FTSEMIB)
The FTSEMIB had a week down by -2.84%
For the following week we could see a consolidation in the area of 21,000 - 21,500
Indicators
A week that once again sees respected the strong bearish channel in place since the beginning of 2022.
The price is currently on the 50MA (yellow line) which we believe will not withstand this latest bearish pressure.
It is very important now to understand how the index will behave in the area of 21,000, which played the role of reversal to the upside in July: in fact, the index could create a new low in the area of 20,000 (respecting the bearish channel) or reverse to the upside again (with possible positive divergences with internal indicators).
At the moment it is too early to know which option will prevail on the market. However, we note a strong trend reversal in internal indicators: MACD seems close to a descent below 0 (negative momentum) and the RSI is now below 50.
We remain neutral on the FTSEMIB and look forward to its possible consolidation in the area of 21,000
Support at 20,700
Resistance at 23.650
DAX (#DAX)
The DAX ended the week down by -4.23%
For the week ahead we could see a bearish continuation to 12,800
Indicators
Negative week that could lead the index to test again the lows of July 2022: what leaves us very skeptical is in fact the Friday's strong bearish candle.
MACD and RSI are both negative: the former is close to a drop below 0 and the RSI is close to the oversold area.
Given the extension of the RSI, we believe that at least for the moment the DAX may not break the strong support at 12,600 to the downside.
We remain neutral on the DAX and we await a possible consolidation
Support at 12,600
Resistance at 14.050
S&P500 (SPX)
The S&P500 had a week down by -4.04%
For the coming week we could see a possible consolidation in the area of 4,000
Indicators
Bearish week on the US index which, for the moment, only seems to retrace slightly after the upward recovery of June and July 2022.
We believe a very important area to take into consideration is that of 4,000: which coincides with the 50MA (yellow line).
MACD and RSI both signal the loss of strength of the index with the first close to a cross below 0 and the second already below 50.
We remain neutral on the S&P500 and waiting for the price to consolidate.
Support at 3,950
Resistance at 4,300
NASDAQ 100 (NDX)
The NASDAQ ended the week down -4.82%
For the week ahead, we believe the index will consolidate in the area of 12,000 - 12,400
Indicators
Bearish week for the tech index which now sees the price close to the 50MA (yellow line): the strong Friday's bearish candle does not exclude further declines that we believe may find their possible bullish reversal in the area of 12,000, upward breaking point in July 2022.
MACD and RSI both signal a loss of strength of the index with the former close to a bearish crossover and the latter now well below the 50 line.
We remain neutral on the NASDAQ100 and stay in anticipation of a possible consolidation on the previous breakpoint at 12,000.
Support at 12,400
Resistance at 13,500
DOW JONES (#DJI)
DOW JONES had a week down by -4.22%
For the coming week we could see a possible consolidation in the area of 32,000 - 31,500
Indicators
Bearish week that now sees the price coinciding with the 50MA (yellow line): given the strong sales on Friday, we do not rule out a possible bearish continuation for the beginning of the week.
MACD and RSI both signal the bearish period of the index: the first has crossed to the downside and the second is below the 50 line.
Given the previous price action, we believe it is appropriate to monitor the RSI: a reach of the 20 and 30 area could anticipate possible trend reversals.
We remain neutral on DOW JONES and await its consolidation
Support at 32,000
Resistance 34,000
OTB Global Investments
28 August 2022
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