In the analysis of last weekend we said that we did not see a relapse towards March lows, although we do not rule it out in the case of our selective.
The week that we have left behind began with important increases in the European squares close to 5%, which will be announced soon. Thus, in general, the European squares managed to recover in a single day everything lost during the previous week. And although the strength goes by neighborhood, it can be said that in general we continue to see strong stocks, with no desire to correct in depth. In fact, it can be said that they are correcting / consolidating previous increases consuming time, or what is the same deploying a lateral movement.
Another very different thing is that the Ibex is more touched and the Italian stock market and the Cac 40 are not there to fire rockets either. But the Dax, the S&P 500 and above all the Nasdaq 100 do. These, in full resistance, must be said, do not seem to want to get away and do not give up. They try again and again and the truth is that as long as Wall Street remains as strong as it is, with technology about to set new annual and historical highsThe possibility of a relapse towards the March lows already seems like an impossible mission. The Nasdaq’s ‘V’ turn is supporting the S&P 500 and with each passing week a possible return to the annual, and all-time highs becomes more apparent.
Next, we analyze the technical aspect of the following stock indices:
Violent rebounds apart, like the one we had this Monday, the truth is that everything remains the same. Nothing has changed significantly. Or at least not to the extent that we are not able to overcome the resistance of 7,210 points (April highs). Only above said resistance, the rebound started from the March lows would continue with a target of 8,000 points, the level of adjustment / fall of 50% of the previous strong fall. The shyness of the rebound is what leads us to consider the possibility of a relapse towards 5,810 points, the annual minimums. We have not even been able to bounce 38.2%, a level that corresponds to 7,440 points. While filling the weekly bearish gap of 8,375 points, the homologous price level where we have the Dax and the S&P 500, is something unthinkable for our index. For this reason, we continue to think that if there is an index that can fall to the minimum, that is ours. And be very careful with drilling the March lows because below that there is nothing until the 2002 lows at 5,250 points.
Ibex 35 weekly chart
The index of the ‘European locomotive’ is trying to attack again the resistance zone that it presents at 11,266 points (the lows of August), before support and now resistance. And above we have the control zone of 11,540 points (weekly bearish gap in mid-March) and 11,700 points (61.8% adjustment / fall). On the side of the supports we have 10,160 points. From which it follows that to the extent that the support we have at the lows of last week is not pierced, we understand that the upward trend from the lows of March remains intact. And therefore an attack on the mentioned resistance levels seems more likely than a return to the March lows. This does not mean that the last bullish section, the rebound section, can be corrected / adjusted proportionally. But the strength that we continue to appreciate in many leading stocks in the index and especially on Wall Street leads us to remain more optimistic than pessimistic.
Dax 30 weekly chart
This index is a copy of the Dax, only it is still a little higher. In fact, right now we have attacking the strong resistance that it presents in the weekly bearish gap of 2,972 points, which in turn coincides with the 61.8% Fibonacci adjustment / retracement. Or, what is the same, closing this gap in weekly candles would be an important sign of strength even though later we can attend an adjustment phase of the entire rise from the March lows. As we discussed weeks ago weekly MM200 recovery it is not exactly a sign of bottom weakness. Rather the complete opposite. In summary, it does not seem that the indices are due to the task of considering a return to the March lows. But if any one did not rule out that it was our selective, the Ibex. Of course, do not forget that in the markets we always have to speak in terms of probability and based on the information of that moment, analysts are not fortune tellers, we do not have the crystal ball.
S&P 500 weekly chart