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Weekly market brief: 7 -11 December 2020

๐Ÿ’ก7 - 11 December 2020

๐Ÿ“ˆ FTSE 100: 6,546.75 (- 0.28%)

๐Ÿ“ˆ DAX: 13,114.30 (- 1.18%)

๐Ÿ“ˆ S&P 500: 3,663.46 (- 0.78%)

๐Ÿ“ˆ Nasdaq 100: 12,375.41 (- 1.41%)

๐Ÿ“ˆ Dow Jones: 30,046.37 ( - 0.34%)

FTSE 100 (#UKX)

The FTSE 100 this week was initially pushed higher by the uncertainty in regards to Brexit and a No-Deal scenario, that weakened sterling and acted as a positive catalyst for the #UKX.

With a weak Sterling the Index reached 6,640, slightly above the resistance level of 6,606 (61.8% Fib. level).

The #UKX on Friday fell till the 9MA: in the history of the chart, the 9MA acted few times as support. However, as happened before, approaching the 9MA with a negative momentum on the MACD most of the time led the FTSE to fall even lower.

From a technical perspective, the level of support and resistance are as per last week: resistance at 6,606 and support at 6,462.

The MACD, even if still well above 0, is loosing momentum and the 12MA is almost crossing the 26MA. In addition, the RSI is gradually moving from the overbought territory and still showing divergence with the price.

For the near future, based also on the history of the chart, we expect a move to the downside and a retest of the support level at 6,462.

However, in case the Brexit negotiation will lead to a no deal scenario, we might see a break of resistance and move to the 6,703 level.


As highlighted last week, the German index successfully touched the 13,000 level on an increase number of Covid cases across the country.

The MACD, even if above 0, lost the momentum and it is now pointing to the downside.

From a technical perspective, we might see a continuation to the downside until the 50MA at 12,900. At this level, we will have to analyse the volumes to understand if a continuation to the downside will be possible or the MA will act as a reversal point.

Therefore, for the near future it is confirmed the resistance level at 13,255 (upper end of the channel) and support at 13,000.

If the 13,000 level will be broken, the next target will be 12,900

S&P 500 (#SPX)

The #SPX this week followed a very similar pattern, bullish move to the upside on Monday and gradually lose the momentum during the week.

However, what we have noticed different from the past weeks is that on Friday the #SPX closed below the 9MA and almost closed outside the channel that it has been taken place since the beginning of November 2020.

Based on the history of the chart, when the index closes below the 9MA we generally see sharp moves to the downside.

From a technical perspective, we confirm the previous level of support and resistance as the level of 3,637 has not been broken yet.

However, we want to stress how the MACD has started to curved down and move to the downside are much probable.

Therefore, for the near future, the support and resistance level are as follow:

first resistance at 3,700

second resistance at 3,800

first support at 3,637

second support at 3,582


The NASDAQ 100 had the worst week among the Indexes above: the big techs have started to slightly curved down. Pullbacks are natural and even healthy for markets, especially when all time market high has been reached.

The #NDX touched the support level at 12,255 but even more significant, it closed for two days in a row below the 9MA. Looking at the moves from September 2020, we understand how when closed below the 9MA happen, we generally see quite strong continuations to the downside. This theory is also support by a MACD, still above 0, but curving to the downside and leading us to think that breath is to the downside.

Therefore for the near future, we might see a retest of the 12,255 and possible continuation to the downside till the 50 MA at 12,900.

The all time market high of 12,650 is, for the moment, our resistance.

Dow Jones (#DJI)

The #DJI has been among the strongest indexes losing only -0.34% in a quite bearish week

The Dow on Friday touched the lower end of the channel and slightly bounced back.

From a technical perspective, we see a MACD showing negative momentum and the RSI that is gradually moving away from overbought territory.

The levels highlighted last week are still valid, therefore the support and resistance levels are as follow

first resistance at 30,225

second resistance at 30,800

first support at 29,880

second support at 29,200

If the lower end of the channel will be broken, further downside will indeed be possible.

OTB Global Investments

London, 13 December 2o20

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