Weekly Market Brief: FTSE, DAX, NASDAQ 100, S&P 500 and Dow
Francesco Bergamini | Nov 20, 2022 10:54AM ET
The FTSE 100 index had a week up by +0.92%. We favor a retracement to the 7,200-7,250 area for the week ahead.
Indicators
Positive week for the British index, which sees the price staying near the strong level of 7,400.
We can see that the price finished the week just above the 200-day moving average (blue line); however, we believe there is not enough strength and conditions to proceed further up.
MACD and RSI are now very extended to the upside: the former sees a slowdown in the histograms, and the RSI remains in overbought territory.
The general context remains very delicate, and we believe it needs a retracement before possibly aiming for 7,600.
We are bearish on the FTSE 100 and waiting for a substantial downside before considering long positions.
- Support at 7,000
- Resistance at 7,400
The FTSE MIB Futures index had a week up +0.42%. For the week ahead, we favor a retracement to the 23,300 area.
Indicators
A positive week for the Italian index continues to stay near the strong area of 24,850.
If, in the medium-long term, these last moves upward are undoubtedly positive, in the short term, we believe that the price is now significantly extended to the upside and that it may need significant reversals before proceeding further.
MACD and RSI are now extended upwards, with the latter in particular in overbought territory (a scenario that has not happened since November 2021, which was followed by strong declines).
We are bearish on the FTSEMIB as we believe the overextension in price and internal indicators shift the weight in favor of retracements rather than repeated upward pressure.
The index is also far from all the leading moving averages making the surrounding scenario unstable and subject to significant reversals.
- Support at 22,500
- Resistance at 24,850
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The DAX index had a week up +1.46%. We favor a progressive retracement to 13,800 for the week ahead.
Indicators
A positive week for the German index keeps the price close to the resistance level at 14,550, respecting the horizontal channel since February-March 2022.
MACD and RSI are now very extended to the upside, with the latter in the overbought area: this aspect radically shifts the risk/return in favor of possible short-term downsides.
We see a possible retracement area at 13,600, not excluding a stronger drop to 13,100. We are bearish on the DAX and in favor of possible short-term reversals.
- Support at 13,100
- Resistance at 14,550
The S&P 500 had a week down -0.69%. We favor a possible consolidation of the 3,800 - 3,900 area for the week ahead.
Indicators
Week of substantial consolidation that keeps the price below the 200-day average (blue line).
Given the indecision candles at the end of the week, it is desirable to expect a consolidation rather than a bullish continuation: the short-medium term target remains the long bearish trendline at 4.000-4.10,0, and we believe that this can be reached after the occurrence of a possible reversal/backtest.
We are positive on the S&P 500 and believe there is room for further upside; at the same time, we believe it is appropriate to wait for price consolidation/drawback before considering long setups.
- Support at 3,550
- Resistance at 3,900
NASDAQ 100 (NDX)
Nasdaq 100 index had a week down by -1.18%. For the week ahead, we favor a consolidation in the 11,200 - 11,600 area.
Indicators
Consolidation week for the Tech index brings the price back into the narrow trading range of 11,800-11,600.
The close above the 50-day average (yellow line) indicates possible short-medium-term increases.
Added to this are the internal indicators MACD and RSI, which seem to support the recovery of strength of the index: the former is marking higher lows, and the RSI is now back above 50.
We are positive on the NASDAQ 100 and waiting for consolidation above 11,600: once above, we see 12,000 and 12,700 as short to medium-term targets.
- Support at 10,400
- Resistance at 12,000
Dow Jones Industrial Average index had a week down by -0.01%. We favor an initial retracement to the 32,800 area for the week ahead.
Indicators
The week that keeps the index at the levels of August 2022 and above the 200-day moving average.
At the same time, the substantial distance from the 50MA (yellow line) keeps us cautious about the latest substantial upside extensions.
MACD and RSI are now very extended to the upside, with the latter in overbought territory.
In addition, we believe it is interesting to point out how the recent October price action is very similar to the one recorded in August: we are not alluding to new lows in the DJI, but we believe there is a fair probability of a retracement at least close to the 50MA, i.e., around 31,000 - 31,500.
A retracement of this magnitude would present an overall encouraging scenario in favor of medium-term increases.
We are bearish on the DOW JONES, given the strong upside extension. Further extensions would make the situation even more fragile and less sustainable.
We look forward to a retracement in price and internal indicators and a possible reconciliation with the major moving averages.
- Support at 31,200
- Resistance at 34,150
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