The Ftse Mib in three sessions has made a marked progress and is now retreating a bit. Will the ascent continue in the short term?
Already in the interview last week there was talk of a breakout of the Ftse Mib and a sectoral rotation in progress.
Now a fact is much more evident: the stock exchanges have now lost their correlation with the economic cycle, while the chart with which they love and agree is that of the Central Banks’ assets.
The latter enter the liquidity system that is poured on the financial markets and since for large companies it is practically impossible to buy government bonds because the returns no longer exist, liquidity pours onto the stock markets.
If you look at the graphs of the QE and those of the stock markets, the correlation between the two appears evident.
This forces us to say that looking at the fundamentals right now doesn’t make any sense.
On the one hand we have a global economy that is falling sharply and on the other the financial markets that are returning to their maximums.
The expansion of the fork is plain for everyone and I remember that historically the stock exchanges have always been a kind of futures on the economy, effectively anticipating the big turning points by six months.
At this moment, however, this correlation no longer exists and has not been shown until the current situation lasts, because this detachment of markets from reality is a side effect of the Central Banks’ QEs and we have no previous experience in this regard.
In fact, the Central Banks are now pulling the strings of everything, and on the one hand finance shouts strong buy, on the other the economy shouts strong sell.
Those who operate on the markets must go with finance and not with the economy, but obviously they do so with a parachute because there is concern that sooner or later there will be a realignment of the two fronts.
The good momentum of the stock exchanges continues and much continues to depend on what the central banks are doing.
Today it is no coincidence that European markets, including Piazza Affari, have reversed upwards following the ECB’s indications on the increase in the PEPP of 600 billion euros, beyond estimates.
Speaking in particular of the Ftse Mib, the next threshold to be monitored is that of 20,000 points which represent a psychological threshold, but the true target is higher, in the 20,500 area.
Downside, the key support is in the 18.300 / 18.00 area that the Ftse Mib has struggled to overcome.
Banco BPM today shows a much more tonic trend than Ubi Banca. What indications can you give us for both?
Ubi Banca is the company disputed with a graphic designer who has sustained himself even in the worst moments.
The stock two days ago broke an important resistance at 2.65 euros and now the first target on the upside is at 2.9 euros.
Banco BPM managed to successfully overcome the resistance at 1.27 euros and is now heading towards the next target at 1.36 euros, which is quite close to the current values.
The stock is set up less well than Ubi Banca, indicating that the first useful support is at 1.19 / 1.18 euros.
ENI is trying to bypass 9 euro. What can you tell us about this title?
ENI in the 9 euro area finds strong resistance and if it manages to break it decisively it can extend the rise towards 10 euro.
Otherwise the title will be destined to go back, with possible landing in the 8 euro area.
Enel continues to rise relentlessly. How sustainable do you think this increase is?
Enel has a wonderful graph and the next significant target is in the 8.2 euro area, however signaling an intermediate resistance at 7.85 euro.
FCA is trying to extend the recovery to 9 euros. Do you still see upside margins for this title?
FCA yesterday made a nice breakout yesterday and in my opinion it will maintain a good setting as long as it travels above 8.5 euros.
If the stock manages to defend this threshold, it can aim for new increases towards an area between 9 and 9.4 euros.
Among industrialists, Leonardo has recently recovered well. What is your view on this title?
Leonardo’s chart was very bad, but once the resistance of 6.55 euros has been overcome, it will be possible to aim for further rises towards 7.29 / 7.3 euros.
I would like to say that Leonardo is far from being among my favorite titles.
Are there any other titles you want to report to Piazza Affari?
All those stocks that showed strength and defended themselves well during the most acute moment of the coronavirus crisis are now going badly and the only one keeping an interesting chart is Amplifon.
Beautiful Ferrari setting that now targets the previous historical maximum, let’s say an area close to 170 euros.
To be able to reach this perl level, the title will have to overcome the stumbling block of 157/158 dollars, paying attention to keeping the support at 150 euros.