Ftse Mib: still upside surprises. Titles ready to shoot


Below is the interview with Pietro Paciello, CEO and Chief Analyst of Pro Markets Sagl, Asset Management Company, to whom we asked some questions about the situation in Piazza Affari and the strategies to be followed for different titles.
Paciello Peter is waiting on Mondays and Fridays at 16 pm with the Market Talk OPENING BELL – NewTraderLab. For info click here.

The Ftse Mib continues to rise, returning to the top of the first decade of March. How do you evaluate this market evolution and what are the possible scenarios in the short term?

From the point of view of the purely technical evolution we had highlighted that the Ftse Mib had a very important obstacle in the area 18.400 / 18.450.

This level, exceeded two days ago, was a very significant static resistance, which also corresponded to an important number, 38.2% of Fibonacci.

With the breakdown of the 18.400 / 18.450 points it was reasonable to expect a strong acceleration of the Ftse Mib, as in fact it is happening.

Moreover, Piazza Affari does not go up on its own and is retracing the footsteps of other markets which are recovering in a very brilliant way the shock consolidated by coronavirus.

For the Ftse Mib I see two levels in rapid succession: the first exquisitely number, would be 50% of the recovery of the big fall, and passes through the 19,800 zone, while the second is more significant and corresponds to a gap-down left open during the big descent in the area 20.500 points.

These can be considered quite significant targets of the Ftse Mib in the next sessions.
Just as the violation of the 18,450 points was important on the upside, obviously at this moment it will be a possible return below this level to discourage new purchases, which at the moment I consider quite unlikely.

I read about the overbought shortly, but it is also true that the excesses are characterizing all the stock lists, so at this moment I would almost declassify it.

Piazza Affari is therefore long, it remains such and it will be dangerous only a descent of the Ftse Mib below 18.450 points and a little earlier under the 18.750 area, but until one of these two levels is impacted, the road towards 19.800 and 20.500 points seems wide open.

Green light for now, without forgetting that there is a bearish divergence and there are short excesses, but the market is experiencing excesses at the moment, so go ahead for new longs in the short.

Unicredit and Intesa Sanpaolo are lengthening their pace by taking advantage of the good time in Piazza Affari. What is your view on these two titles?

The two big names in the banking sector are positively positioned on a par with Ftse Mib, of which they are essentially clones.

The perplexities are therefore the same: an excess of short-term purchases, a clear recovery trend very well defined and outlined that has not reached graphically significant situations for the moment.

I am therefore unable to indicate the reasons why this rise should stop and in particular for Unicredit I see a first target at € 8.59, the first dynamic resistance that I can estimate, while the second objective is in correspondence with the gap-down in area 9.7 euros.

These are the two potential target levels of this beautiful ascent, but I repeat that there is excess short, so a minimum of caution is in order.

Certainly it is not cheaper to buy now and talk about target levels for those with Unicredit in place by “not suspicious” prices and certainly not an invitation to enter now because it seems too late and dangerous.

Unlike Unicredit, Intesa Sanpaolo has no major obstacles in its way, so they are unable to identify an intermediate resistance level.

I only see the large gap in the 1.95 euro zone, very far from current levels, remembering that even on Intesa Sanpaolo there is a bearish divergence.

Also in this case the title is not to be bought now, while those who already have it can keep it with targets at 1.9 / 1.95 euros.

In the event of a downward break of 1.58 euros, the bullish scenario would start to creak for Intesa Sanpaolo which for the moment seems well set upwards.

STM now shines among the blue chips, pushing momentum with over 24 Euros. Is there still upside room for this title?

STM has had a very particular chart in recent times: it has built a static consolidation base in the 21.4 / 21.5 euro zone and for several days it was unable to agree to the wave of positivity that hit Piazza Affari.

Today’s session is very significant, not only for the strong rise scored by STM, but also for the breakout of the first dynamic resistance.

Technically it is a very interesting situation and theoretically it is the trigger of a new extension.

I see the next steps for the title at € 25.44 and then the great gap-down in the area of ​​€ 28, although it is quite distant at the moment, but it is also true that STM is not overbought so it can be evaluated an insertion of the same in the portfolio.

FCA is also catalyzing purchases in Piazza Affari. What strategies can you suggest for this title?

I see FCA now directed towards the first dynamic resistance at 9.55 euros and I think this is the target.
Even in this case point out an an excess of bought short, then we could still be in a phase of upward thrust, but exhaustive.

Buying FCA now seems dangerous to me, while those who have it in their wallet can keep it to see if the target of 9.55 euros is reached.

As a sign of potential weakening in the short term, a closure below the 8.3 euro area would make me change my mind, otherwise I see FCA projected towards 9.55 euro.

Today Enel goes up for the thirteenth session in a row. It ‘time for a break for the title?

From the point of view exquisitely graphic it is not yet the time for a break, but it should be correctly pointed out that the buy on Enel has tripped with the breakout of the dynamic resistance at 6.4 Euros.

Again there is a violent over-bought short, but I’m drawn to a case of bearish pull-back that Enel could take on the old dynamic support zone on the area 7,6 / 7,65 €.

The title could stretch towards this threshold and then trigger a serious correction.

Enel is to be taken with pliers because it has a graph shot upwards, with an unnatural inclination and therefore on a possible excess, a very violent counter-trend phenomenon would probably occur.

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