S&P 500 could retrace at least to 4,300

FTSE 100 (#UKX)

The FTSE 100 ended the week down -0.59%.

For the week we are in favour of a consolidation at 7,450.

Indicators

Looking at last month price action, we can see the strong support role played by the 7,520 level: on January 21, the break of this level led to strong short-term volatility.

We cannot know if the market will react in the same way, but we can certainly understand that the bearish pressure is still very present on the British index: the lower highs of the past week suggest a descending triangle, with an imminent break of the level at 7.520.

MACD and RSI both point downward, after last week’s negative divergence: with the second indicator already below the 50 line (bearish).

For the week ahead we are in favor of a bearish continuation which we believe will find consolidation around the 50MA.

Support at 7.405.

Resistance at 7,520.

S&P500 (#SPX)

The S&P 500 had a week down by -1.41%.

For the coming week, the index could retrace at least to 4,300.

Indicators

The bearish pressure has now led the S&P500 to an interesting area that could mark the start of a stronger bearish downtrend or a short-term bullish reversal.

The area of 4.300 -4.350 has in fact played a supporting role in the past for bullish recoveries: July and October 2021 and the most recent at the end of January 2022.

MACD and RSI if on the one hand confirm the bearish moment, on the other they report higher lows if we compare the candles of Friday and January 28, 2022: two candles are obviously not enough to draw a rebound, but they help us to understand the importance of this price range.

Staying in favour of a retracement till 4,300, we will monitor how the price will react within this range.

Support for 4,245.

Resistance at 4.376.

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