Financial index | Current price | Forecast | S1 | R1 | S2 | R2 |
​FTSE100 | 7,901 | Cons./ Bearish | 7,400 | 7,900 | 7,200 | 7,800 |
FTSEMIB | 26,950 | Cons./ Bearish | 24,800 | 27,200 | 24,000 | 28,000 |
DAX 40 | 15,476 | Cons./ Bearish | 14,200 | 15,500 | 13,800 | 15,800 |
S&P 500 | 4,136 | Consolidation | 3,750 | 4,200 | 3,600 | 4,300 |
NASDAQ 100 | 12,573 | Consolidation | 11,000 | 12,700 | 10,500 | 13,300 |
DOW JONES | 33,926 | Consolidation | 31,200 | 34,500 | 30,200 | 35,000 |
TADAWUL | 10,551 | Consolidation | 10,000 | 11,200 | 9,700 | 11,700 |
FTSE ADX | 9,931 | Consolidation | 9,680 | 10,300 | 9,680 | 11,000 |
DFM | 3,382 | Consolidation | 3,270 | 3,500 | 3,100 | 3,730 |
S: Support R: Resistance
FTSE 100 (#UKX)
The FTSE100 index had a week up by +1.76%
For the week ahead we are in favour of a possible retracement to the 7,650 area
Indicators
Positive week that saw the British index reaching all-time highs
The strong upward extension makes us remain skeptical and we believe that the surrounding scenario is in any case very fragile: at the same time it is advisable not to fight the strong price action but rather wait.
MACD and RSI are in overbought territory and in a strong negative divergence with the price.
The risk-reward is unbalanced in favour of downsides but we believe it is appropriate to wait for price signals: specifically, the three obstacles to overcome on the downside are the 9-day average (red line) and the price level at 7.700 in the very short term term. Then it will be necessary to see how the price will behave near the 50-day average (yellow line).
We remain bearish on the FTSE100 given the over-extension to the upside but await an initial dip below 7,700.
Support at 7,400
Resistance at 7,900
FTSEMIB (#FTSEMIB)
The FTSEMIB index had a week up by +1.95%
We are in favour of a consolidation in the 25,600 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 action, 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 move in recent months is 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 considering long setups.
Support at 24,800
Resistance at 27,200
DAX (#DAX)
The DAX index had a week up by +2.15%
We are in favour of a consolidation in the 15,000 area for the week ahead
Indicators
Positive week as the German index now approaches the strong congestion area between 15,500 and 15,800.
This area could in fact play the role of reversal given the high concentration of volumes. Added to this is also the almost exit from the Bollinger Bands.
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 medium-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 short 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 +1.62%
We are in favour of a possible consolidation between 4,000 - 4,100 for the week ahead
Indicators
Bullish week that saw the price closing with a possible short-term reversal.
MACD and RSI, after a long upward phase, have reached their respective overbought areas which, according to previous oscillations, could signal an impending weakness.
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 near both 3,950 (in conjunction with the 50MA) and 3,750 (strong short- to medium-term support).
After a bull run, we are neutral on the S&P 500 and waiting for retracements.
Support at 3,750
Resistance at 4,200
NASDAQ 100 (#NDX)
The NASDAQ 100 index had a week up by +3.34%
For the week ahead we are in favour of a possible consolidation in the 12,000 - 12,250 area
Indicators
Positive week for the Tech index which is now very distant from the main short-term moving averages.
MACD and RSI are positive even if they are now in overbought territory: conditions that in the past have anticipated market reversals.
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 11,000
Resistance at 12,700
DOW JONES (#DJI)
DOW JONES index had a week down by -0.15%
We are in favour of a consolidation in the 33,000 area for the week ahead
Indicators
Neutral 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 till now.
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 down by -1.51%
We are in favour of a possible backtest to 10,300 for the week ahead
Indicators
Negative week that sees the Saudi index reverse the direction of the last few weeks.
MACD and RSI have reversed to the downside
In the event that the price does not hold above the 50MA, we assume a possible backtest of the intermediate support at 10,300.
After a bullish phase, we are back to neutral on TADAWUL and waiting for a price consolidation.
Support at 10,000
Resistance at 11,200
FTSE ADX GROWTH MARKET INDEX (#FADGI)
FTSE ADX index had a week up by +1.99%%
For the week ahead we are in favour of a consolidation in the 9,680 - 9,800 area
Indicators
Week of slight recovery after the strong downward extension
Before considering a possible long position, we believe that 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 latter recovering slightly.
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 up by +1.61%
For the week ahead we are in favour of a possible extension to 3,440
Indicators
Positive week for the DFM which seems to break the narrow trading range of recent months upwards
Since mid-September, the index has continued to fluctuate 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
5 February 2023