European stock markets reinforce their supports

We are leaving behind a week in which the European stock markets once again tested the key supports that I have told you to watch out for on numerous occasions, such as the 4,000 points of the EuroStoxx 50 or the 14,800 points of the German DAX 40.

The fact that its scope again stopped the bearish advance and caused a new rebound what it does is reinforce these supports, in case there was any doubt, as the dividing line that separates what until now seems like a previous consolidation from a bullish continuity , of a full-fledged correction.

You have to keep in mind that if these supports are lost, the risk would be that the EuroStoxx 50 could go back an additional 10% to the 3,600 point area, whose reach would simply mean a 38.20% Fibonacci correction of the entire upward trend that was born in the lows of March 2020, which were the ground of the Covid crash.

If that adjustment takes shape, which by technical analysis is the most normal thing in the world, we would be facing what could be described as the buying opportunity of the year since I continue to understand that after the current consolidation or that hypothetical correction, the upward trend will will pick up again and we will see new higher highs in the European stock markets.

Operationally, I am not going to tire of repeating that in supports you have to think more about buying than selling, but I also want to call for prudence in the face of the possibility that in the end, putting them to the test so much, they end up being perforated, with the important implications corrective measures that this would have for the stock markets.

In any case, As long as the EuroStoxx 50 does not lose 4,000 points and the DAX 14,800 points, I am not in favor of reducing exposure to the European stock market and if they assume a stop linked to not losing those supports, they can buy in approaches to them.