💡9 - 13 November 2020
📈 FTSE 100: 6,316.39 (+ 5.75%)
📈 DAX: 13,076.72 (+ 2.86%)
📈 S&P 500: 3,585.15 (- 1.34%)
📈 Nasdaq 100: 11,937.84 (- 1.36%)
📈 Dow Jones: 29,263.48 (- 0.84%)
FTSE 100
This week the FTSE 100 had one of the best week since the beginning of the crisis, managed to overcome the downward trend line at 5,900 and touched the 6,400. The major contributors to the upside where the Pfizer news on a potential vaccine that positively impacted oil and bank stocks, heavyweights on the FTSE
The next target is the 6,500 level reached on the 8th June 2020.
From a technical perspective, RSI is at 70 signalling a potential overbought territory and the MACD, however over 0, is slopping down almost telling us that the trend is loosing its strength.
The candle formed on Friday 13 is a “hammer” one therefore slight moves to the upside are still possible.
For the week, we would proceed with caution: any healthy move to the upside is made by retest of previous resistance (now support) levels. We soon expect a pullback at the 6,150 level where also the 200MA lays.
DAX
The German index had a healthier run up compared to other European indexes: it successfully managed to re-enter the channel zone (approx. 12,300 - 13,300).
From a technical perspective, the doji candle of 11th November led us to thing that a pullback is expected for the near future.
MACD is showing sign of a weakening trend while RSI at 60 however not heavily overbought is at a level that in the space led to downside.
For the week, we would expect a re-test of the 50MA level at 12,750-12,800
S&P 500
The S&P 500 this week reported new market high at 3,640 on positive news from Pfizer of an upcoming vaccine. Once retraced it has been moved sideways and closed slightly in the red for the week.
From a technical perspective, the inverted hammer candle reported on 9 November is definitely cause of concern. If from one side we have MACD showing positive momentum on the other side the RSI is reporting a divergence with the price between 12 October 2020 and 9 November 2020:
in both dates, the RSI stood at 65 but price ways we have registered a difference of 100 points.
However few upside are still possible from a momentum perspective, we expect pullbacks in the near future with re-test of 3,450 level.
Dow Jones
The Dow, as the other market, gained almost 5% on the 9 November from the positive Pfizer news on a possible vaccine: almost reached the 30,000 level but then moved sideway and closed slightly in the red for the week.
From a technical stand point, the inverted hammer candle from 9 November can be seen as a very strong reversal signal, however the MACD is showing positive momentum.
On the contrary, RSI is reporting divergence between 3 September 2020 and 9 November 2020 level, giving us the impression that the trend is weakening.
Very confusing picture, however we believe that the gab will be filled in the near future: therefore, if light upside might be possible from a momentum perspective, we believe a pullback to 28,500 is possible.
OTB Global Investments
London, 15 November 2020