The growing concern about the impact on economic activity that the worsening of the pandemic may have in some parts of the world and the economic consequences that may result from the measures aimed at slowing its progress generated on October 28th turbulence in the equity market, both in Europe and in the US.
The declines of more than 3% during some moments of the session led the main stock markets of the Old Continent to reach the support zone that Ecotrader has been waiting for a long time. “It is the base of the wide side that has been limiting the consolidation during the last months,” pointed out Joan Cabrero, a technical analyst.
Read more about European stock markets and find the most important financial headlines with our companion app Born2Invest.
An insight into the market
The reach of the 3,000 points of the EuroStoxx 50 or the 6,420 points of the Ibex 35, “was what we were waiting for in order to look for a window to buy European stock,” pointed out the expert who added that “at this point we are clear that we are already in an optimal area to look for a buying window and in no case to sell.” In other words, there is now an opportunity for the laggards to jump on the bandwagon of the bullish market and try to take advantage of the market reconstruction that has been underway since the March lows.
However, this position taking is not without risk, as the loss of support in cases such as the EuroStoxx also highlights the possibility that an upsurge in the pandemic could take the market back to the March lows (20% below current levels), although we would find a stable ground already tested. The risk of a self-feeding downward spiral is great, given the fear that the main European economies will carry out stricter confinements to stop the expansion of COVID-19, as France and Germany have done recently.
The area is unbeatable from a strategic point of view, but at these levels, it would be ideal to wait to see some technical evidence suggesting a sellout before buying. That is, to implement this plan before “we need an upward shift to close the gaps down on Wednesday, i.e. the recovery of the 3,070 points of the EuroStoxx 50,” qualified the Cabrero.
These are the key levels of all the Ibex 35 stocks
The fact that the loss of support presented by one of the great directors of the market, the Nasdaq 100, at 11,450-11,350 points suggests that the consolidation that the selective has been developing since the beginning of September may be framed within a classic normal flat pattern, something that means that in the near future the main technological index could be directed towards seeking support for the September minimum zone at 10,675 points and we do not even rule out that it could seek the 10,300 point zone.
In the case of the Ibex 35, the support zone of 6,420 points was not pierced at any time during Wednesday’s session, leaving the technical scenario in a hot zone but not burnt out. | These are the key levels to watch out for when buying into all the Ibex 35 stocks.
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in elEconomista.es, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
Which of these lesser-known EV stocks will be the next Tesla?
The competition on the EV market is getting tighter, as several lesser known manufacturers are raising the interest of investors....
Gigantic cannabis plantation officially opened in Northern Macedonia
In addition to the cannabis plantation, PHCANN - which is also listed on the New York Stock Exchange - has...
Is the Ethereum 2.0 deadline bullish for the ETH course?
With the launch of Ethereum 2.0, a new era could begin for the young Decentralized Finance (DeFi) industry. The change...
Exit for an SME financed with equity crowdfunding: Cesynt shares on Euronext
Founded in 2010, Cesynt had already conducted a first equity crowdfunding campaign on Opstart in June 2018, collecting $297,000 (€250,000),...
The business environment in Morocco: the EESC calls for more effort
In its annual report, published in the Official Gazette on November 17th, 2020, the Economic, Social and Environmental Council in...
Cannabis7 days ago
CBOS survey: over 60% of Poles are for cannabis legalization
Biotech7 days ago
Ability Pharma closes €2 million round to advance antitumor development
Featured7 days ago
Moneyfarm launches smart bank transfer to invest directly from the current accounts of multiple banks
Featured7 days ago
How to generate performance through responsible investments