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Dow Jones, Nasdaq 100, FTSE 100 Forecasts for the Week Ahead

Dow Jones, Nasdaq 100, FTSE 100 Forecasts for the Week Ahead

Peter Hanks, Strategist

Dow Jones, Nasdaq 100, FTSE 100 Forecasts: Bullish

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Dow Jones Technical Forecast

Outlook: Bullish

The Dow Jones rests at record levels after trading higher - almost without incident - since early November. While the fundamental landscape may offer cause for concern, the technical outlook remains largely encouraging. The index continues to post higher-highs as it pushes further into uncharted territory. That said, potential resistance may reside slightly overhead.

Dow Jones Price Chart: Daily Time Frame (February 2020 – January 2021)

Dow Jones chart

The 161.8% Fibonacci level derived from the September high to October low resides at 31,130 and has offered some sense that it will look to resist a continuation higher. Slightly northward rests a trendline projection drawn from the June and September swing-highs that may also provide trouble for the Dow Jones Industrial Average.

That said, the index enjoys a bounty of support by comparison. Early areas may exist at the 50-day simple moving average and psychological 30,000 mark nearby. Together, they will look to ward off a deeper decline that might see the DJIA take aim at 29,568, the February high, or 29,197 the September peak. Either way, recent price action suggests the path of least resistance is higher.

Nasdaq 100Technical Forecast

Outlook: Bullish

The Nasdaq 100 finds itself in a similar position trading at record levels headed into the week. Overhead resistance is essentially nonexistent at this point, so identify levels of note is arduous. Still, psychological levels like 13,000 and 13,500 may begin to carry weight as a result.

Nasdaq 100 Price Chart: 4 – Hour Time Frame (September 2020 – January 2021)

NDX Chart

Months of gains have, however, created a series of supportive zones that can be looked to for assistance should selling materialize. Initial support might be offered by the Fibonacci level and recent high at 12,953 while subsequent support could rest at 12,800 where an ascending trendline drawn off the November lows resides.

Pullbacks might serve as healthy consolidation at this stage as the “line in the sand” likely does not exist until prior highs around 12,460. Follow @PeterHanksFXon Twitter for updates and analysis.

FTSE 100 Technical Forecast

Outlook: Bullish

The FTSE 100 enjoyed a remarkable rally last week, pushing beyond resistance to take aim at the 7,000 mark for the first time since February. The index is now bolstered by nearby support and a recent golden cross formation, which typically signals a period of rising prices. Apart from the golden cross, the 200-day moving average and the 50DMA themselves may provide consistent support in the days ahead and it could help carry the FTSE 100 higher.

FTSE 100 Price Chart: Daily Time Frame (January 2020 – January 2021)

FTSE 100 chart

That said, the index may be vulnerable to consolidation in the days ahead as it negotiates overbought territory. While there is little to suggest the FTSE 100 rally will stop here, pullbacks in the shorter-term may provide an opportunity for lower entry points.

Early resistance resides at the 7,000 mark with an area of open space beyond until the Fibonacci level at 7,334. Thus, the technical outlook for the FTSE 100 remains encouraging and pullbacks might provide opportunity to gain exposure.

--Written by Peter Hanks, Strategist for DailyFX.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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