Financial index | Current price | Forecast | S1 | R1 | S2 | R2 |
​FTSE100 | 7,556 | Bearish | 7,200 | 7,600 | 7,100 | 7,670 |
FTSEMIB | 24,621 | Bearish | 22,500 | 24,850 | 21,000 | 25,500 |
DAX 40 | 14,529 | Bearish | 13,100 | 14,550 | 12,650 | 15,000 |
S&P 500 | 4,071 | Cons./ Bearish | 3,750 | 4,100 | 3,600 | 4,180 |
NASDAQ 100 | 11,994 | Consolidation | 10,400 | 12,000 | 10,000 | 12,700 |
DOW JONES | 34,429 | Cons./ Bearish | 31,200 | 34,500 | 30,200 | 35,000 |
TADAWUL | 10,882 | Cons./ Bullish | 10,800 | 11,950 | 10,500 | 12,270 |
FTSE ADX | 10,552 | Consolidation | 9,900 | 10,750 | 9,680 | 11,000 |
DFM | 3,323 | 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 +0.93%
For the week ahead we are in favour of a retracement on the area of 7,400
Indicators
Positive week for the British index that sees the price keep moving close to the strong level already reached in August.
Despite a further positive week we believe that the risk/reward on the UKX is now heavily unbalanced in favour of short-medium term downside. We believe that there are two important factors to support this thesis: the first is the price action, in fact we can see that throughout 2022 the FTSE 100 has fluctuated on a wide lateral channel between 7,000 - 7,600.
The second aspect is internal indicators: MACD and RSI are now very extended to the upside, with the first seeing a slowdown in histograms and the RSI remaining in overbought territory.
Combining price action and internal indicators we can see that at current levels, the British index has more often fluctuated downwards rather than upward. The first sign of reversal we believe will come from the breaking of the 9-day moving average (red line), which has supported the price from mid-October till today.
We are bearish on the FTSE 100 and awaiting substantial drawdowns before considering long setups.
Support at 7,150
Resistance at 7,600
FTSEMIB (#FTSEMIB)
The FTSEMIB index had a week down by -0.39%
For the week to come we are in favour of a retracement in the area of 23,700-23,500
Indicators
Consolidation week for the FTSEMIB continuing to move near the strong area of 24,850
Index that after the strong stretches of previous weeks is now stuck in a side channel: break that will lead to strong volatility.
MACD and RSI keep being extended upwards with in particular the second in overbought territory (scenario that has not happened since November 2021, which was followed by strong moves downwards). Further element of caution is the negative divergence between RSI and price.
The index is far from all major moving averages making the contour scenario unstable and subject to considerable reversals.
We are bearish on the FTSEMIB as we believe that the overextension of both price and internal indicators shifted the weight in favour of possible pullbacks.
Support at 22,500
Resistance to 24,850
DAX (#DAX)
The DAX index had a week down by -0.08%
For the week to come we are in favour of a progressive retracement till 13,900
Indicators
Positive week for the German index that keeps the price close to the resistance level at 14,550 respecting the horizontal channel in place from February-March 2022
MACD and RSI continue to be extended upwards with the second in overbought area: in both indicators we notice a negative divergence with the price action.
Looking at previous swings, once the price once has reached today's levels of MACD and RSI a pullback has shortly followed. We believe that this situation is no different from the previous ones
In order to allow the price to rise, the internal indicators should first retrace.
We identify a possible retracement area around 13,600, without excluding a stronger pullback till 13,100.
We are bearish on the DAX and in favour of possible short-term reversals
Support at 13,100
Resistance at 14,550
S&P500 (#SPX)
The S&P500 index had a week up by +1.13%
For the week to come we are in favour of a possible consolidation on the area of 4,000 - 3,900
Indicators
Week that saw the SPX close slightly above the long bearish trendline in place since early 2022.
The 9-day moving average (red line) continues to play the role of dynamic support.
MACD and RSI are extended upwards with in particular the first in considerable slowdown: although they are not in overbought territory, we are sceptical about the possibility of further upside potential.
We are neutral on the S&P 500: the contour scenario remains that of a bear market and before we can change course the obstacles are the overcoming of 4.100 and then 4,300.
We do not believe that there is the necessary strength to be able to make extensions of this magnitude, and we therefore prefer to wait for market reversals coupled with retracement of internal indicators.
Support for 3,750
Resistance at 4.100
NASDAQ 100 (#NDX)
The NASDAQ 100 index had a week up by +2.03%
For the week to come we are in favour of a consolidation in the area of 11,700 - 12,200
Indicators
Positive week for the Tech index that now sees the price getting closer to the long bearish trend line that started in January 2022.
MACD and RSI are positive and seem to support the advance of the index.
The price continues to stay above the 50-day average (yellow line) which we believe is a good medium to long term indicator.
We are positive on the Nasdaq, at the same time the strong downward extension of US rates to 10 years (now at 3.488%) makes us remain cautious about the index as a recovery of vigour in the US10 could bring downward pressure on the Index.
Support at 10,400
Resistance to 12,000
DOW JONES (#DJI)
The DOW JONES index had a week up +0.24%
For the week to come we are in favour of an initial retracement in the area of 33,600
Indicators
Week that keeps the index at the August 2022 levels’.
MACD and RSI are now very extended upwards with the second in overbought territory: the particular slowdown in histograms we believe is a further element of caution
As in the past, the distance from the 50MA (yellow line) makes us remain cautious about the last strong upward extensions. We believe there is a fair chance of a retracement at least close to the 50-day average, or around 31,500 - 32,000.
We are bearish on the DOW JONES given the strong upward move. We prefer to look forward to a slowdown in internal indicators, reconciliation with major moving averages and a better relationship with volumes.
Support for 31,200
Resistance at 34,500
TADAWUL (#TASI)
The TADAWUL index had a week down by -1.06%
For the week ahead we are in favour of a consolidation in the area of SAR 10,700 - 10,900
Indicators
Week of substantial consolidation for the Saudi index that keeps the price above the strong support at 10,800.
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 in recent months has played the role of dynamic resistance
MACD and RSI are very extended downwards, decreasing the possibility of further medium-term declines.
At the moment we prefer to remain neutral on the Tadawul. The strong downward extension makes today's price action very attractive, at the same time we believe it is appropriate to wait for a consolidation followed by price reversal at least above the 11,000 level.
Support at 10,800
Resistance at 11,950
FTSE ADX GROWTH MARKET INDEX (#FADGI)
The FTSE ADX index had a week up by +0.23%
For the week to come we are in favour of a consolidation in the area of 10,400
Indicators
Consolidation week that saw the price saying above 10,400.
MACD and RSI are in considerable slowdown and in negative divergence with the price action: the latter has in fact set back less than the internal indicators have.
At the moment we prefer to remain neutral on the FTSE ADX, the strong upward move is positive in a medium to long-term perspective. At the same time, before evaluating long setups we believe it is appropriate to wait for the price to stabilise: a return in the area of 10,200-10,300 could be an area of backtest.
We are not ruling out the possibility of further lengths: in the event of this, we believe that the best strategy is still to wait for more important market reversals.
Support at 9,900
Resistance at 10,750
DUBAI FINANCIAL MARKET GERNAL INDEX (#DFMGI)
The DFM index had a week up by +0.57%
For the week ahead we are in favour of a possible recovery of up to 3,380
Indicators
Negative week for the DFM that saw the price reverse on the strong support at 3,270
Since mid-September the index continues to move within the tight trading range 3,300-3,400 not giving particular short-medium-term direction.
MACD and RSI both seem to suggest a possible recovery; although the first indicator is essentially flat, the second is now moving away from the oversold area.
Despite being slightly positive, we remain neutral on the DFMGI waiting for the break of one of the two levels at 3,330 or 3,400
Support for 3,270
Resistance at 3,500
OTB Global Investments
4 December 2022