IBEX35/EUROSTOXX50: Preparing for Imminent Volatility
European stock markets, boosted by the ECB's recent meeting, have managed to ward off the fears that plagued markets in early September. Although the recent rebound has helped the indices to stay away from the August lows, it is not yet a definitive recovery. The declines at the beginning of the month have proved too deep to be considered a simple consolidation, suggesting that additional bouts of volatility may be ahead before a sustainable upswing. In this context, remaining calm, reducing exposure to the stock market if it is high, and being prepared for future buying opportunities is advisable.
On Friday, Spanish stock markets closed higher, with the IBEX 35 gaining 1.23%, reaching a new five-year high. The financial services, construction and technology sectors drove the rally. Inmobiliaria Colonial SA led the gains, while Bankinter and Redeia Corporación SA were among the losers.
It is crucial to maintain liquidity to take advantage of possible pullbacks, which will allow acquiring assets with a better risk-return ratio. Key supports to monitor include the 4,730 points of the EuroStoxx 50 and the 11,138 points of the IBEX 35. Looking at the IBEX 35 chart, there is solid support around 11,100 points. After overcoming double resistance last week, there is a possibility that the index will advance to new highs driven by volatility. The current RSI stands at 64.67%, suggesting that this upward momentum could continue, as long as previous fears do not affect its trajectory.
It is relevant to mention the EuroStoxx 50, as both indices have shown a high correlation recently. However, in the last week, their movements have been different, probably due to the practically null weighting of the EuroStoxx 50 in relation to companies in the Spanish index. The EuroStoxx 50 is moving in a sideways range near the strong trading zone of 4,843 points. With an RSI of 64.26%, this index could correct towards the lower indicated zone of 4,730 points.
Ion Jauregui – ActivTrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
On Friday, Spanish stock markets closed higher, with the IBEX 35 gaining 1.23%, reaching a new five-year high. The financial services, construction and technology sectors drove the rally. Inmobiliaria Colonial SA led the gains, while Bankinter and Redeia Corporación SA were among the losers.
It is crucial to maintain liquidity to take advantage of possible pullbacks, which will allow acquiring assets with a better risk-return ratio. Key supports to monitor include the 4,730 points of the EuroStoxx 50 and the 11,138 points of the IBEX 35. Looking at the IBEX 35 chart, there is solid support around 11,100 points. After overcoming double resistance last week, there is a possibility that the index will advance to new highs driven by volatility. The current RSI stands at 64.67%, suggesting that this upward momentum could continue, as long as previous fears do not affect its trajectory.
It is relevant to mention the EuroStoxx 50, as both indices have shown a high correlation recently. However, in the last week, their movements have been different, probably due to the practically null weighting of the EuroStoxx 50 in relation to companies in the Spanish index. The EuroStoxx 50 is moving in a sideways range near the strong trading zone of 4,843 points. With an RSI of 64.26%, this index could correct towards the lower indicated zone of 4,730 points.
Ion Jauregui – ActivTrades Analyst
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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