The Tel Aviv 35 Index (TA-35) concluded the trading week ending February 6 with a decisive move to the upside, registering a cumulative gain of 1.20% over the five-day period. Closing at 4,051.87, the index demonstrated remarkable resilience in the face of fluctuating global sentiment, shrugging off mid-week selling pressure to finish near its session highs. This performance underscores a decoupling of the local market from some of the broader uncertainties plaguing international exchanges, as domestic investors position themselves for potential breakouts in key heavyweights.

Volatility and Mid-Week Recovery

The week began on tentative footing, with the index experiencing a notable dip between Wednesday and Thursday, sliding toward the 4,000 support level. As visible in the intraday charts, the market tested the resolve of bulls on February 5, dropping briefly below the opening ranges before finding strong buying interest. This “buy-the-dip” mentality suggests that institutional investors remain confident in the underlying fundamentals of the Israeli economy. The rapid recovery from the 4,003.91 weekly low indicates that liquidity remains robust, preventing any minor correction from turning into a broader sell-off.

Sector Rotation and Market Breadth

While specific volume data was lighter than average during the mid-week lull, the Friday session saw a clear rotation back into risk assets. The 0.32% rise on the final trading day was likely fueled by the heavyweight banking and technology sectors, which often serve as the primary engines for the TA-35’s momentum. With the index now hovering just under the 4,100 psychological barrier, market participants are closely watching earnings reports from dual-listed technology firms, which continue to benefit from the global demand for AI and cybersecurity solutions. This correlation with the Nasdaq has provided a tailwind, counteracting weaker performance in the traditional industrial sectors.

Technical Outlook: Testing the Ceiling

From a technical perspective, the TA-35 is currently in a consolidation phase near its peak. The index is trading significantly above its yearly lows of roughly 2,278, reflecting a powerful long-term uptrend. The current level of 4,051.87 places the market less than 2.5% away from its 52-week high of 4,146.28. Analysts suggest that sustaining a close above 4,050 was a critical technical victory for the bulls. If the index can maintain this trajectory early next week, it may trigger a technical breakout, drawing in momentum traders who have been sitting on the sidelines waiting for a clear signal.

Looking ahead to next week, investors should maintain a heightened focus on the 4,150 resistance level. A breach of this ceiling could open the door to unprecedented highs, while a failure to break through might result in a short-term pullback toward the 3,980 support zone. Traders will also be monitoring the upcoming global inflation data releases, which could influence the Bank of Israel’s monetary policy stance. While the current trend is undeniably positive, geopolitical developments remain a perennial risk factor for the local market; any sudden escalation could quickly dampen the prevailing risk-on sentiment.