Weekly market brief: 5 - 9 July 2021

FTSE 100 (#UKX)

The FTSE 100 had a mixed week closing at +0.04%

For the week ahead we confirm the uptrend with the first target at 7.165 and 7.215 to follow.

Indicators

This week the index managed to form a higher low compared to last week (7.011 vs 6.950), therefeore confirming the upward trend.

The strong resistance level at 7.122 was broken on Friday followed by a "back-test": we believe that from this point the # UKX can restart to reach our short-term targets.

MACD is about to cross to the upside along with a RSI which could support the bullish momentum.

Support at 7,122

Resistance at 7.165

FTSEMIB (#FTSEMIB) The FTSEMIB had a week slightly down by -0.77%

For the coming week, we believe the FTSEMIB still has upside potential targeting 25.550 for the near term.

Indicators

The 50MA is still playing a strong supporting role, which we believe can continue at least for the month of July.

Before looking at our target (current resistance), the #FTSEMIB has an intermediate target at 25,400 where it has been rejected few times: a strong break of this level could easily lead to current resistance.

MACD, very close to 0, seems to want to crossover to the upside along with a consolidating RSI: both indicators could support a bullish move in the short term.

Support at 25,554

Resistance at 24.930

DAX (#DAX)

The DAX closed the week with a rise of + 0.37%

For the week ahead we confirm our target at 15.736 to then aim for 15.800.

Indicators

The #DAX this week managed to create a higher low compared to previous week (15,462 vs 15,320), which reaffirms the upward trend and the possibility of reaching both of our targets.

The Index, which entered a phase of consolidation at the beginning of June, now seems to be able to continue rising. The momentum could be supported by a MACD that is crossing over to the upside, along with a RSI that is consolidating before a leg higher.

Support at 15.135

Resistance at 15.540

S&P500 (#SPX)

The S&P 500 had a positive week up by + 1.54%

For the week ahead, we are in favor of a test of 4.300 and then possibly continue higher.

Indicators

The index, given the strong volumes of the last two days, seems to want to continue rising: the trend is undoubtedly bullish. The problem, however, is that now the strong distance from the 50MA, combined with an overbought RSI, in strong divergence with the price, make us think either to a bearish move to the support level or a consolidation phase.

Every time the RSI has reached the overbought area, there have been strong downward swings. Once the index is closer to the 50MA, we will consider long positions.

Support at 4.286

Resistance at 4.360

NASDAQ 100 (#NDX) NASDAQ had a positive week up + 1.90%

For the week ahead, we are in favor of a retest of previous levels at 14.420 and 14.123

Indicators

We believe that the Nasdaq risk/reward ratio is now very much against a long position: despite having a very strong uptrend, looking at previous swings whenever the #NDX has moved more than 5% from the 50MA has then had strong bearish movements.

A decisive bearish movement would not mean a change in trend, but rather a physiological rebalancing of the trend.

The MACD is pointing strongly to the upside, and does not seem to want to cross to the downside at the moment. The RSI has now reached overbought, the last time was in September 2020

Support at 14,420

Resistance at 14.827

DOW JONES (#DJI)

The DOW JONES had a week up + 1.16%

For the coming week we expect a continuation of the uptrend with a target, in the short term, of 35.093

Indicators

More regular index than other American peers, it is now testing the resistance level at 34.851 again.

Compared to previous times, the MACD and RSI indicators seem to encourage a break of the resistance level: MACD has crossedover to the upside and is returning above 0, the RSI has broken the bearish trendline and can now push up until the overbought territory.

Support at 34.261

Resistance 34.851

OTB Global Investments

3 July 2021