Weekly market brief: 9 - 13 January 2023

Financial index	Current price	Forecast	S1	R1	S2	R2
​FTSE100	7,699	Cons./ Bearish	7,300	7,750	7,200	7,850
FTSEMIB	25,180	Consolidation	23,000	25,500	22,000	26,200
DAX 40	14,610	Consolidation	13,400	14,650	13,000	15,000
S&P 500	3,895	Cons./ Bullish	3,750	4,100	3,600	4,180
NASDAQ 100	11,040	Cons./ Bullish	10,400	12,000	10,000	12,700
DOW JONES	33,630	Cons./ Bullish	31,200	34,500	30,200	35,000
TADAWUL	10,531	Cons./ Bullish	10,000	11,200	9,700	11,700
FTSE ADX	10,197	Consolidation	9,900	10,750	9,680	11,000
DFM	3,302	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 +3.32%

For the week ahead we are in favour of a possible retracement to the 7,500 area

Indicators

Very positive week for the British index which returns to the 2022 highs'.

The area of 7,000-7,750 represents a strong resistance that has never been overcome and we believe that even in this case there is not the necessary strength to proceed further upwards. Has happened before, a move up is usually proceed by a retracement first.

MACD and RSI are both very extended to the upside with the latter in overbought territory and negative divergence with the price action.

The price action regularity during 2022 we believe to be a strong direction indicator for the index and we reiterate that risk/reward is now in favour of possible market reversals. In addition, the exit from the Bollinger bands keeps us even more defensive for the week ahead

We remain bearish on the FTSE 100 and await a sizeable market reversal.

Support at 7,300

Resistance at 7,750

FTSEMIB (#FTSEMIB)

The FTSEMIB index had a week up by +6.22%

For the week ahead we are in favour of a consolidation in the 24,400 area

Indicators

Very positive week for the Italian index which returns to the March 2022 levels'.

As happened before, the resistance at 25,500 we believe is very difficult to overcome and in a context of strong extension we do not believe the necessary conditions are in place to continue upwards.

MACD and RSI are both quite extended to the upside and diverge negatively with the price move.

Risk/reward continues to be skewed to the downside, without excluding brief upswings.

We remain bearish on the FTSEMIB: the strong extensions of the week just concluded could represent one last push before more strong market reversals. A retracement to the 23,000 area could be very attractive for long setups.

Support at 23,000

Resistance at 25,500

DAX (#DAX)

The DAX index had a week up by +4.93%

We are in favour of a consolidation in the 14,400 area for the week ahead

Indicators

Positive week that brings the German index back into the strong resistance level, which we believe could once again represent a strong barrier to overcome.

MACD and RSI after a bearish phase now seem ready to support any upside moves in the index even if very close to the overbought zone and in negative divergence with the price action.

In the very short term, the German index could give rise to bullish swings.However, we believe the surrounding scenario is very fragile with strong probabilities of declines rather than repeated upward moves.

We remain bearish on the DAX and await possible market reversals.

Support at 13,400

Resistance at 14,650

S&P500 (#SPX)

The S&P500 index had a week up by +1.45%

For the week ahead we are in favour of a possible consolidation on the 3,900 area

Indicators

Bullish week that sees the price now close to the 50-day average (yellow line).

The narrow trading range that started in mid-December seems to to be breaking to the upside, in the event of a positive opening for the coming week, we could look at a short-term target at 4,100.

Bearish scenario instead sees the price slide to 3,650.

MACD and RSI after a bearish phase could support the index in a short-term bullish phase.

We are bearish on the S&P 500, despite a possible recovery of strength we prefer to wait for further market retracements until at least 3,650.

Support at 3,750

Resistance at 4,100

NASDAQ 100 (#NDX)

The NASDAQ 100 index had a week up by +0.92%

We are in favour of a possible move upward to 11,500 for the week ahead

Indicators

Positive week for the Tech index which manages to stay above the October lows'.

The continuous swing close to the Bollinger band seems to suggest possible rises to at least 11,500.

MACD and RSI after a bearish phase now seem to lean towards positive swings, especially look at the RSI which has now reversed to the upside.

We are bullish on the NASDAQ 100 in the short term: the break above the 5-day average (red line) seems to suggest a slight recovery of vigour for then.

Support at 10,400

Resistance at 12,000

DOW JONES (#DJI)

The DOW JONES index had a week up by +1.46%

For the week ahead we are in favour of a further leg upward to 3,400-3,500

Indicators

Positive week that saw the price exiting the narrow trading range started in mid-December

We believe a plausible scenario would be to back-test the previous consolidation area at 34,000 and then continue lower.

MACD and RSI seem to be favouring a slight recovery for now.

Despite a possibile short term bullish scenario, we remain bearish on the DOW JONES over the medium term and until the price reaches at least 31,600 the risk return will remain skewed in favor of further downsides.

Support at 31,200

Resistance at 34,500

TADAWUL (#TASI)

TADAWUL index had a week up by +2.57%

We are in favour of a recovery to at least SAR 10,750 for the week ahead

Indicators

Positive week for the Saudi index which seems to want to start an upward reversal

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 has played the role of dynamic resistance in recent months

MACD and RSI are in oversold territory, decreasing the possibility of further short-term downside. Both indicators have started a slight reversal to the upside.

At the moment we prefer to remain neutral on the Tadawul. The strong downside extension makes today's swings very interesting, at the same time we believe it is worth waiting for a consolidation followed by price reversal above at least the 10,550 - 10,600 level.

Support at 10,000

Resistance at 11,200

FTSE ADX GROWTH MARKET INDEX (#FADGI)

FTSE ADX index had a week down by -0.13%

For the week ahead we favour a consolidation in the 10,000-10,400 area

Indicators

A week of slight declines which sees the price respecting the bearish trendline that began in December

Continued swings near the 50-day average (yellow line) could pave the way for a re-test of 10,600.

MACD and RSI mirror the price action and are both very close to going back into bullish territory.

Specifically, we prefer to wait for a consolidation in the 10,000 -10,400 area and then consider long setups: even a possible retracement to 9,900 could offer interesting opportunities.

We currently remain neutral on the FTSE ADX with a short-term upside bias.

Support at 9,900

Resistance at 10,750

DUBAI FINANCIAL MARKET GERNAL INDEX (#DFMGI)

DFM index had a week down by -1.01%

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 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

8 January 2022