Eugenio Sartorelli will be engaged today in a Videolive with Cyclic and Fractal Projections on the main markets: for info click here
Equity markets continue to show good intonation, starting with Wall Street pulling the EU stock exchanges. Will this positivity continue in the short term?
A correction after more than 2 months of recovery and a Nasdaq 100 that is on a different planet from Earth would be more than physiological.
In terms of timing, my cyclical models give the rise in mid-June, then at least two weeks of correction would be more than natural.
It must be said that with the immense liquidity provided by the Central Banks any unrealistic scenario is now possible.
The Ftse Mib is trying to approach the highs of the end of April, remaining below them for now. What are the possible scenarios in the next sessions?
The Ftse Mib also suffered from the unfortunate ban on short selling which has reduced the volumes and depressed any attempt at recovery.
Since returning to a more “normal” market, 18,500 share and at the limit the threshold of 19,000 points can be reached.
It all depends on how long the rally on the US markets will last.
What can you tell us about the recent performance of Banco BPM and Ubi Banca and what strategies can you suggest for both?
The Italian banking sector is penalized by the load of government bonds it has in its belly and therefore by the spread.
Furthermore, with the unfavorable economic situation there are no large margins for this sector.
Banco Bpm, after the lows of March, continues within a slightly bearish channel and is a stock that for now shows no signs of recovery.
As for Ubi Banca, after the March lows, prices moved within a slight bullish channel and with the public exchange offer operation promoted by Intesa Sanpaolo there could be a recovery of strength with values towards 2.8- 2.9 euros.
FCA has returned above € 8, while Ferrari is struggling to reposition itself beyond the area of € 150. What is your view on these two titles?
For FCA, the unknown is how the sector will recover during this crisis. The merger with Peugeot can reduce the negative economic effects.
As a result of this merger, prices could have sudden movements, but for now seeing FCA towards 8.5-8.7 euros would already be a success.
Ferrari has instead recovered very well and has a relative strength well above the index.
The luxury car sector is known to feel the economic crisis less. For now the price gravitates around 150 euros and seems to be in a waiting phase. Difficult to hypothesize big rises and for Ferrari already a return to 155-160 euros would be a great thing.
Given the trend in oil prices, what strategies can you suggest for two stocks like ENI and Saipem?
In a rather anomalous way, ENI has benefited little from the recovery of the oil price. The title is in a congestion phase between 8 and 9 euros.
If ENI manages to get out of this area it could quickly return to the 10 euro quota.
Saipem is a title that is struggling to recover and it seems that it can continue in this state of apathy just above 2 euros.
What information can be drawn from the analysis of Implied Volatility (Vix index and others)?
The Vix Index is a well-known indicator of sentiment and fear. It dropped fairly regularly from the March highs, but struggles to drop further and gravitates just under 30 points.
Normally during the S & P500 hikes the Vix is around 13-15%. Therefore the signal is that operators are always clear about fears of a possible correction, even if decided, at any time.
The analogous index for Europe, the Vstoxx, also provides similar indications.
In a certain sense, the rise in stock markets, however substantial and persistent, is based on still rather fragile balances.