The selling panic at the opening of the European stock markets is going to cause the EuroStoxx 50 to approach the theoretical support zone of 3,600 points, which is what we could describe as the dividing line that separates a corrective scenario from a bear market in the one that could be seen additional drops of 15% to the 3,000 point zone, which is where the main reference was listed before the first vaccines against Covid-19 came on the scene. | More strategic information on Ecotrader
At 3,600 points, the recommendation is that don’t panic sell since the scope of this support environment would be, under normal circumstances, what could be called the opportunity of the year to buy the stock, looking for the main bullish trend to resume from there to mark new higher highs above 4,400 points.
I only recommend selling if you have an exposure to the stock market above 60% in order to reduce it to levels around 50%. Losing the 3,600 points, I would be in favor of reducing the exposure by 20 more points.
The selling panic at the opening has led the Ibex 35 to look for the support zone it finds at 8,000/8,080 points, which is the base of the channel that has been delimiting consolidation in recent months.
As we have been insisting from Ecotrader, the Ibex 35 will not show deterioration in its upward possibilities as long as it does not lose the base of this channel and especially as long as it does not lose 7,700 points. At the moment the Ibex is resisting on its supports, so I am not in favor of selling.
overall uncertainty
The worst case scenario is confirmed. The president of Russia, Vladimir Putin, has begun the invasion of the Ukrainian region of Donbass this morning and, in addition to the battle on the ground, has confirmed the war with the West. Waiting to know how the international response will be, investors are running in search of refuge. Stock markets around the world are falling, while oil, gold and bonds are soaring -with their prices rising and their yields falling-.
This may be a worse day for equities in the Old Continent than last January 24 (so far the most bearish so far in 2022), when precisely the fear of a war in Ukraine hit the markets for the first time.
The European reference indices have opened this Thursday with falls greater than 4%, although these have subsequently softened to around 3%.
The Ibex 35 has lost 6.5% so far this year, the EuroStoxx 50 has fallen 11%, the same as the German Dax, and the French Cac 40 has fallen by close to 8%.
value to value
The falls within the Ibex 35 have caused 63% of the selective companies to have crossed their respective supports. Thus, compared to the five values of the selective that had already lost them at the close of the markets on Wednesday (Indra, Bankinter, PharmaMar, Banco Santander and Red Eléctrica), in these first minutes of trading today, the cuts force another seventeen values to pierce their buying zones.
The invasion of Ukraine by Russia has even led PharmaMar and Indra to break the second technical step set by the Ecotrader analyst, Joan Cabrero, by trading below 50 euros per share and 8.6 (respectively). ) in the first steps of this Thursday. Bankinter and Aena are also listed around their second supports.
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