Weekly market brief: 30 January - 3 February 2023

Financial index	Current price	Forecast	S1	R1	S2	R2
​FTSE100	7,765	Cons./ Bearish	7,400	7,900	7,200	7,800
FTSEMIB	26,435	Cons./ Bearish	23,400	25,900	22,400	26,500
DAX 40	15,150	Cons./ Bearish	13,800	15,200	13,400	15,500
S&P 500	4,070	Consolidation	3,750	4,100	3,600	4,180
NASDAQ 100	12,166	Consolidation	10,400	12,000	10,000	12,700
DOW JONES	33,978	Consolidation	31,200	34,500	30,200	35,000
TADAWUL	10,847	Consolidation	10,000	11,200	9,700	11,700
FTSE ADX	9,373	Consolidation	9,900	10,750	9,680	11,000
DFM	3,329	Consolidation	3,270	3,500	3,100	3,730

S: Support R: Resistance

FTSE 100 (#UKX)

The FTSE100 index had a week down by -0.07%

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

Indicators

Slightly negative week that sees the British index remaining below the 5-day average. That this could be the beginning of a major retracement is still too early, but looking at internal indicators, the conditions seem to be in place for a market reversal.

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)

The FTSEMIB index had a week up by +2.56%

We are in favor of a consolidation in the 25,500 area for the week ahead

Indicators

Very positive week for the Italian index which is now less than 2,000 points from the 2021 highs.

Despite a strong upside price swing, internal indicators seem to point to fragility

MACD and RSI are very extended to the upside in a sharp negative divergence with the November 2022 highs.

The risk/reward is unbalanced in favour of a possible market reversal if we assume 28,000 as the medium-term target.

We remain neutral on the FTSEMIB, the upward moves in recent months are positive and seem to mark a change of pace. At the same time, we believe it is necessary to wait for a reversal followed by consolidation before evaluating long setups.

Support at 23,400

Resistance at 25,900

DAX (#DAX)

The DAX index had a week up by +0.77%

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 broadly to the upside and in negative divergence with the price move. 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 reversal.

A plausible short-term target we believe to be 14,400 which can then play as a reversal point or 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 index had a week up by +2.47%

We are in favour of a possible consolidation between 4.000-4.100 for the week ahead

Indicators

Bullish week that sees the price retesting the November-December 2022 highs.

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

The resistance area is very strong and the price has often reversed lower: this occasion could be different but we believe that a retracement is necessary before continuing, possibly higher.

We identify backtest areas around 3,900 (in conjunction with the 50MA) and at 3,750: it will be necessary to monitor how the price will behave

After a bull run, we are neutral on the S&P 500.

Support at 3,750

Resistance at 4,100

NASDAQ 100 (#NDX)

The NASDAQ 100 index had a week up by +4.71%

We are in favour of a possible consolidation in the 11,600-12,000 area for the week ahead

Indicators

Good week for the tech index as it now approaches the strong resistance area at 12,000-12,400.

MACD and RSI are positive even if the latter suggests caution: RSI is in fact overbought that has often anticipated market reversal.

If in the medium term, the price action of the last few months could be positive, in the short term we believe that the best strategy is to remain neutral and/or create liquidity. If indeed we are seeing a change of pace, we would rather wait for a backtest of previous breakout points than chase the price to the upside.

Support at 10,800

Resistance at 12,400

DOW JONES (#DJI)

The DOW JONES index had a week up +1.81%

We are in favour of a consolidation in the 33,000 area for the week ahead

Indicators

Positive week for the industrial index which sees the price consolidate around the 50-day average (yellow line).

We expect strong volatility once we break the 33,000 or 34,500 levels following a catalyst event

MACD and RSI are essentially neutral even if they have slowed sharply from November to today.

We remain neutral on DJI with a short-term downside bias.

Support at 31,200

Resistance at 34,500

TADAWUL (#TASI)

TADAWUL index had a week up by +0.10%

We are in favour of a possible upside no further than 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 -4.41%

For the week ahead we are in favour of a consolidation in the 9,680 - 9,800 area

Indicators

A week of steep declines which sees the price retesting the strong support at 9,680

Before considering a possible long setup, we believe the price must first consolidate: according to previous swings, the current support level seems to be an area of plausible reversal.

MACD and RSI are now very extended to the downside with the second in oversold territory.

We are bullish on the FADGI but prefer to wait for an initial phase of consolidation which is not yet in place at the moment.

Support at 9,680

Resistance at 10,300

DUBAI FINANCIAL MARKET GERNAL INDEX (#DFMGI)

DFM index had a week down by -0.70%

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 move 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

29 January 2022