Does the reopening of the government in the United States, expected at the end of the week, ratify the belief that there will be an end-of-year rally? How do you see the indicators?
It is undoubtedly good news. The market was waiting for this reopening to definitely occur so that everything would return to normal. During this time there has been a lot of uncertainty about how this shutdown was going to affect the economy, and also, without the publication of real data, we did not know exactly where it was.
Obviously, we need normality and tranquility to return so that the market regains confidence. That can serve as a boost for that end-of-year rally that many expect.
If you look at the IBEX 35, it is doing very well. We are seeing it surpass 16,200 points, placing it above those levels and maintaining a clearly bullish trend. For now, keep it up. We find supports around 15,872 and 15,768 points. As long as it remains above these levels, the outlook is clearly positive. In short, the only thing we can do right now is remain optimistic.
And how do you see the rest of the indicators, such as the German DAX or the Euro Stoxx 50?
If we look at the German DAX, which is one of the most followed and operated indices, what we see is greater laterality. We continue in a lateral range that has been in place since May of this year, and for the moment we continue within it. This reflects a certain weakness in German industrial companies, especially if we compare it with the Spanish Ibex 35, which has a greater weight of banks and utilities. In this environment, in which banking and utilities can continue to do well, The Ibex is performing better than the DAX at the moment.
If we look at the EURO STOXX 50, we see greater strength than in the DAX, since it includes Spanish, French and Italian companies, among which there are several banks. Last week we already commented that it had broken a lateral upward range, and that, therefore, it had a minimum objective of 5,777 points. So the market will most likely continue to move towards that level.
And if we go to the United States, to the S&P 500, we also see a clear upward trend. The latest corrections have not lost previous supports, so we remain in a positive technical structure. At this time the index presents a triangular formation, which would be confirmed upwards if 6,852 points are exceeded. If that happens, we could be much calmer. In general, The market is in a positive trend, and although you always have to be selective when investing in specific stocks, you can be optimistic on a global level.
We ask you for 3 values with good technical appearance from the Spanish stock market
From a technical point of view, the first value that I would highlight is Banco Santander. It is breaking highs in the 8.95 euro area, maintains a very clear upward trend and, if we analyze the weekly, monthly and daily charts, We see that it is in free rise. The bank shows strength in both Europe and Latin America, and also maintains solid capital discipline, with share buyback programs that are supporting earnings per share. All this is very positive for the end of the year.
Another interesting value is Bankinter. We see how it has left support in the area of 12.43 euros and is recovering strongly. The bank has a solid balance sheet, a high return on equity and a diversified business.
The interesting thing in this case is that both the fundamentals and the technical analysis are going in the same direction. Sometimes an asset rises only due to technical factors, but in this case there is fundamental support, which reinforces the trend.
Finally, I highlight Logista, which I really like for what it is doing in the short term. It is also breaking an upward triangular pattern. The company has a stable business model, with robust cash flows and a high and sustainable dividend, something that the market is valuing very well. Since March 2022, it has maintained a clearly upward trend that remains intact, so the current situation is also very positive for Logista.
By the way, what do you think of the Spanish banks that are rising strongly again these days?
The banking sector remains a very strong sector for several reasons. On the one hand, the interest rate curve has widened, allowing banks to improve their financial marginsince they charge more for loans than they pay for deposits. Furthermore, business results are being better than expected, with strong shareholder remuneration, both in dividends and share buybacks.
In Spain, the economic situation is relatively positive: employment and consumption remain strongwhich reduces credit risk and sustains the demand for financing. Added to this is that valuations remain very attractive, with many banks trading below their tangible book value.
With all this, the banking sector continues to be one of the most interesting areas to look at.
How can we amplify our investments?
A good option is to use instruments with limited risk, such as the barriers offered by IG. For example, if an investor wants to invest in the IBEX 35, they can establish a “knock-out” below a previous support, so that if the price reaches that level, the loss is completely limited from the beginning.
The investor can then adjust the contract size based on the risk he or she wants to take. Suppose your portfolio is 100,000 euros and you want to risk only 1% (i.e. 1,000 euros). In that case, select the appropriate number of contracts so that if the stop level is reached, the maximum loss is that amount. For example, If with one contract the risk is equivalent to 350 euros, you could open about 2.8 contracts, which would mean a maximum loss of 986 euros if the stop is touched.
If the market moves in your favor, you can take advantage of the leverage and the trend to obtain profits, always keeping the risk completely controlled.