Weekly Market Brief: FTSE, DAX Up; S&P, NASDAQ 100, Dow Still Down
2022.05.15 10:41
FTSE 100 (UKX)
FTSE FT100 TR (UKX) ended the week up by + 0.66%. For the coming week, we could see a consolidation between 7.400 – 7.350 followed by a move to the upside.
FTSE100 Daily Chart
The parallel channel of the FTSE 100 continues between 7.300 – 7.600 with the area around 7.190 once again confirmed as a reversal point.
For the coming week, we could expect a consolidation with subsequent upward push. Specifically, the index could slightly retrace to 7.350 to then possibly aim for a break of the current resistance level.
MACD and RSI signal a resumption of vigor, with the former intending to reverse to the upside and the RSI close to breaking the bearish trendline and the 50 line (bullish).
We remain positive on the British index, in the short to medium term with a favorable series of higher highs from 10 May.
Support at 7.300
Resistance at 7.450
FTSEMIB
The FTSE MIB Net Total Return (Lux) had a week up by +2.60%. For the week, we could see a consolidation between 23.250 – 24.600 followed by a push to the upside.
FTSEMIB Daily Chart
The week just ended saw the Italian index, on Friday, exceeding the 9MA (red line) which we believe to be a short-term positive indicator. Observing past price action, we noted positive performance after similar moves.
At the same time, the FTSEMIB is now re-testing the bearish trendline in place since early 2022 (which coincides with the 50MA—yellow line).
MACD and RSI seem to favor a bullish push for the index, with the former close to a reversal to the upside and the latter on the 50 line (bullish).
We are positive on the FTSEMIB and believe that a consolidation above 24.250 could then lead to further upside.
Support at 22.900
Resistance at 24.250
DAX 40
The DAX ended the week up by 3.01%. The coming week could see a consolidation between 13.800 -14.050 to then moving higher.
DAX Daily Chart
The German index is again close to the 50MA (yellow line) which has played the role of dynamic resistance in recent months.
MACD and RSI appear to support a bullish recovery in the DAX, with the former near a bullish crossover and the latter very close to break the 50 line (bullish).
It is still too early to understand if the index will be able to break the resistance level (and 50MA) to reverse to the upside.
A scenario like that of Mar. 29, Apr. 21, and May 5 is still possible. At the same time, we believe that the greatest difference between the current price action and those past lies in the RSI: the indicator exited the oversold area and broke the bearish trendline in place since March 2022, which didn’t happened on previous occasions.
We are positive on the DAX and in favor of a possible short to medium term upside reversal.
Support at 13.600
Resistance at 14.050
S&P 500
The S&P 500 had a week down by -0.84%. For the week ahead, we are in favor of a recovery to at least 4.150.
S&P 500 Daily Chart
The strong green candles in the final days of the week make us lay out a resumption of vigor in the SPX also considering the strong downward extension. Looking at past price action, the low volumes area between 3.850 and 4.150 could lead to rapid price movements.
MACD and RSI are both very extended to the downside with the RSI in positive divergence with the price.
As also pointed out last week, we believe that the Index is now strongly extended to the downside, shifting its risk/reward in favor of long positions.
The short-term target is at 4.150; a break of it could then bring the index to 4.300 in the medium term.
Support at 3.850
Resistance at 4.150
NASDAQ 100
The NASDAQ ended the week down by -0.53%. For the coming week, we are in favor of a consolidation between 12.600-13.000 followed by a bullish upside.
NASDAQ 100 Daily Chart
Despite another bearish week, we believe that the index may soon begin a slow upward recovery. We believe it is also supported by a slowdown in the weekly declines.
The price action of the week just ended continue to be above the bearish trendline which we believe to be a positive indicator. Further confirmation will be given by a break of the 9MA (red line) at 12.600.
MACD and RSI are both very extended to the downside, which makes us shift the risk/reward ratio in favor of possible price recovery and trend reversals. We highlight also a mild positive divergence between RSI and price.
Still on the RSI, another factor to monitor is the bearish trendline in existence since March 2022; a break of it could be very positive in a short-medium term perspective.
The price action on the trendline combined with oversold internal indicators make us remain positive on the NASDAQ and in favor of a price recovery with a short-term target of 13,500 (strong breaking point)
Support at 12.200
Resistance at 13.500
Dow Jones
The Dow had a week down by -0.81%. For the week ahead, we expect a bullish recovery to at least 33.200.
Dow Jones Daily Chart
We believe that the reversal at 31.250 is a good short to medium term indicator that could position the Index price action in the broad channel between 32,000 and 34,000 (just below the 50MA – yellow line).
MACD and RSI are now very extended to the downside, which makes us lean towards a recovery in strength of the index and upward moves in the short term. Further confirmation will be given by the break of the 9MA (red line) at 32.600.
We are positive on the DJI and believe that the 32.000 level can now serve as a support for a bullish recovery in the index.
Support at 32.000
Resistance 34.000
