Weekly market brief: 3 - 7 January 2022

Index	Current price	Forecast	S1	R1	S2	R2
​FTSE100	7.384	Bearish	7.330	7.405	7.220	7.490
FTSEMIB	27.347	Cons./ Bearish	26.750	27.406	25.820	27.975
DAX 40	15.885	Consolidation	15.736	15.980	15.040	15.980
S&P 500	4.766	Bearish	4.720	4.808	4.600	4.900
NASDAQ 100	16.320	Cons./ Bearish	15.700	16.450	15.180	16.770
DOW JONES	35.365	Bearish	36.00	36.565	35.350	36.815

S: Support R: Resistance

FTSE 100 (#UKX)

The FTSE 100 ended the week up + 0.39%

For the week ahead we expect a retracement to at least 7,300

Indicators

During the last days of the week, we believe the FTSE 100 has started to form a consolidation that lead to a slight retracement.

The MACD, well above 0 is now showing signs of weakening along with a RSI very close to the overbought zone.

We can also see how the RSI could soon give indications of stronger fluctuations in the short term: for this indicator, in fact, we see a strong resistance at 62 and a trendline. That if broken, it could anticipate bearish swings.

Although the primary trend remains bullish, we believe that the current risk/return of the index pushes more towards bearish swings.

The first strong support area coincides with the crossing of the 50MA between 7,300 and 7,250.

Support at 7,330

Resistance at 7,405

FTSEMIB (#FTSEMIB)

The FTSEMIB had a week up + 1.71%

For the week we expect a possible test at 27,000

Indicators

After the strong bullish push of the last few weeks, the Italian index is now consolidating at a strong resistance level.

In our view, we may now see a slight retracement to at least the 50MA. In fact, if on one hand, the MACD has just crossed the 0 line indicating a positive change in momentum it more the RSI to suggest bearish swings in the short term.

The RSI is now at 62, a strong resistance that has repeatedly repelled the index from bullish continuations.

To monitor carefully the levels of 27,250 for bearish fluctuations and 27,250 for a bull continuation.

Support for 26,750

Resistance at 27.406

DAX (#DAX)

The DAX ended the week up + 1.35%

For the week ahead, we expect a consolidation between 15,736 and 15,980

Indicators

The German index has now entered what we believe to be a consolidation phase very similar to the period of August 2021.

Despite a MACD in recovery, there are two indicators that make us think of a consolidation and subsequent decline in the short term: the RSI is now approaching the area of 60, a strong resistance that has repeatedly stopped the index from continuing bullish.

In addition, we can see that the last 8 strong bullish candles have recorded decreasing volumes.

Despite an uptrend, we believe that the current risk / return of the DAX pushes more towards bearish swings.

Support for 15,736

Resistance at 15,980

S&P500 (#SPX)

The DAX ended the week up + 1.35%

For the week ahead, we expect a consolidation between 15,736 and 15,980

Indicators

The German index has now entered what we believe to be a consolidation phase very similar to the period of August 2021.

Despite a MACD in recovery, there are two indicators that make us think of a consolidation and subsequent decline in the short term: the RSI is now approaching the area of 60, a strong resistance that has repeatedly stopped the index from continuing bullish.

In addition, we can see that the last 8 strong bullish candles have recorded decreasing volumes.

Despite an uptrend, we believe that the current risk / return of the DAX pushes more towards bearish swings.

Support for 15,736

Resistance at 15,980

NASDAQ 100 (#NDX)

The NASDAQ ended the week down -0.62%

For the week ahead, we expect a possible test of the 16,100

Indicators

The technology index continues to fluctuate on a broad parallel channel between 15,700 and 16,450, and we do not believe it is ready for a break to the upside for the moment.

MACD, despite exceeding 0, we can see a decreasing trend since November

Very similar situation on the RSI, also in strong divergence with the levels of early November 2021.

Given the previous swings, we believe the risk-return is more in favor of short-term bearish movements.

Support at 15,700

Resistance at 16,450

DOW JONES (#DJI)

The DOW JONES had a week up + 0.78%

For the week ahead, we expect a retracement of up to 36,000

Indicators

After a strong push in the last few weeks, we believe that the DOW is now forming a reversal pattern that could lead to retracements at least to the resistance area.

In fact, despite having reached new highs, these levels were not supported by MACD and RSI, which instead appear to be in strong divergence with the price.

Despite an uptrend, we believe that the index may retrace before eventually continuing to rise.

Support to 36,000

Resistance 36,565

OTB Global Investments

2 January 2022