Weekly Market Brief: Forecasts For The FTSE, DAX, NASDAQ 100, S&P 500, Dow
2022.06.12 08:50
FTSE FT100 TR
The FTSE FT100 TR ended the week down by -2.86%. For the week ahead, we could see a consolidation between 7.280 and 7.360.
FTSE Daily Chart
With the strong trend reversal that took place over the last two days, the FTSE 100 once again confirms the wide lateral channel between 7.215 and 7.600.
Based on previous price action, we could in fact expect a consolidation in the lower part of this channel to then eventually test the lower part of the 50MA (yellow line).
MACD and RSI are in line with the negative movement of the index with the first close to a downward reversal and the second near the oversold area.
We want to underline the short-term bearish channel in existence since April, in which the UKX returned after the “false break” at the beginning of June. With this in mind, we can expect interesting price action in the area of 7.215 where the the index may reverse to the upside or break with greater force to the downside.
Given the strong downward extension of internal indicators, we are positive on the FTSE index from a short-medium term perspective.
Support at 7.300
Resistance at 7.450
FTSE MIB Net Lux Index
The FTSE MIB Net Lux Index had a week down by -6.70%. For the week we could see a consolidation between 23.500 and 24.000.
FTSEMIB Daily Chart
The very negative week brings the Italian index back to the strong support level of March 2022. Unless the May hikes turn out to be a false break, we could have a slight recovery in strength that could bring the index back above the bearish trendline.
This thesis could also be supported by the extension of the price outside the Bollinger® Bands.
MACD and RSI at the same time confirm the negative movement with the former close to a bearish cross and the latter in the oversold area as in March 2022.
We are positive on the FTSEMIB in the short to medium term, but we prefer to wait for a confirmation of a reversal at 23.500
Support at 22.220
Resistance at 23.650
DAX 40
The DAX ended the week down by -4.83%. For the coming week, we are in favor of a consolidation in the 13.600 – 13.800 area.
DAX Daily Chart
The sell off week brought the DAX back to the bearish trendline broken at the end of May. Based on previous swings and how it is now at the bottom of the Bollinger Bands, it is possible to expect a consolidation in this area (followed by an upward recovery).
MACD and RSI at the same time describe the actual negative scenario with the former near a bearish crossover and the latter near the oversold area (which coincides with the trendline that started in March 2022).
We are positive on the DAX in the short to medium term, however, we want to wait for a price confirmation on the current support at 13.600. The aspect that leaves us cautious is the increase in volumes during the last trading days.
Support at 13.600
Resistance at 14.050
S&P 500
The S&P 500 had a week down by -5.06%. For the coming week, we see a consolidation in the area of 4,000.
S&P 500 Daily Chart
The recent sell-off brought the SPX back to the strong support level in place since May 2022 where we believe a consolidation is possible before possible strong swings in both directions.
MACD and RSI correctly describe the current situation, with the former still below the 0 line (negative momentum) and the latter below the 50 line (bearish).
We believe it is appropriate to monitor how RSI and price will act at the beginning of the week in order to have better idea regarding direction. As mentioned, the internal indicator is in slight divergence with the price, which can suggest a possible recovery.
At the same time, a break of the strong support level could lead to further, and stronger, moves to the downside.
We remain positive on the S&P 500 in the short to medium term, but we prefer to wait for a price reversal on the strong support at 3.850.
Support at 3.850
Resistance at 4.160
NASDAQ 100
The NASDAQ 100 ended the week down by -7.15%. For the coming week, we are in favor of a consolidation in the area of 12.000.
NASDAQ 100 Daily Chart
The tech index is back again on the bearish trendline and we believe that this could lead to price lateralization in the coming week. MACD and RSI remain negative with the MACD still below the 0 line (negative momentum) and the RSI near the oversold area.
Given the strong downward extension of the RSI, we believe that the price may not have sufficient strength to break the strong support level, but we still believe it is appropriate to wait for price confirmation before evaluating long positions.
We are positive on the NASDAQ in the short to medium term, expecting a turnaround in the 12.000 area.
Support at 11.500
Resistance at 13.000
Dow Jones Industrial Average
Dow Jones Industrial Average had a week down by -4.58%. For the coming week, we view favorably a consolidation in the area between 31.000 and 32.000.
Dow Jones Daily Chart
The strong bearish channel in place since November 2021 continues to dictate the DJI‘s price action. Based on previous swings, we might expect possible consolidation at the bottom of that channel.
MACD and RSI continue to correctly describe the negative period of the index: the MACD is below the 0 line and the RSI is now near the oversold area.
We believe it’s appropriate to monitor how the RSI and price will act at the beginning of the week. Possible divergences with the levels of mid-May could give more information on short-term price action
We are positive on the Dow Jones index in the short to medium term and are waiting for a trend reversal in the 31.000 – 31.500 area.
Support at 30.600
Resistance 33.290
