Ftse Mib tonic, but a buy is now scary. ENI and Saipem: what to do?


Below is the interview with Angelo Ciavarella, Head of Global Markets at Infinox Capital and Contract Professor of Financial Market Theory and Practice at the University of Greenwich, to whom we asked some questions about the Ftse Mib index and some blue chips.

The Ftse Mib is returning to press on the 19,800 / 19,900 points already achieved in the previous sessions. Are you expecting further positive developments in the near future?

The Ftse Mib is more difficult than the other European indices, although moving upwards but to a lesser extent, thanks to the figures released on the macro front in Italy which have been less positive than the others.

In the morning we remember that the PMI indices in Europe have been announced and we report the excellent update of Germany, not surprisingly today the Dax is going up more than the others.

Looking instead to the opposite side of the Atlantic, we report that the future on Nasdaq today has pushed to new historical highs beyond the 10,200 area, with a gain of over 16% at the beginning of the year.

The situation of the Ftse Mib is very different, which compared to the end of 2019 still shows a negative balance of over 15%.

This is not surprising, however, considering that in recent weeks the technology stocks have catalyzed purchases, just think of the new high marked yesterday by Apple.

It should be noted that overnight there was a dramatic collapse of world index futures, after the news from the US Secretary of State who stated that the deal between the United States and China on trade would no longer take place.

There was subsequently a V-shaped recovery of the markets thanks to a tweet from Trump who denied his Secretary of State, writing that the agreement with China is still ongoing.

Going to look closely at the Ftse Mib we notice that it was very technical, both in the first climb and since the breakdown of the 18,200 points, it almost brought him to close the gap in the 20,500 / 20,600 area.

From the top of the 20,400 there was a striking correction that brought the index down to a minimum in the 18,300 area, from which purchases were restarted.

The target of this climb for the Ftse Mib could be in the 20.500 / 209.600 area, where the gap left open in March would be closed.

Once this threshold is reached, the index may move sideways and much may depend on what the other markets will do.

For the Ftse Mib you have to be careful of the possible loss of 19,000 points, because if this happens in the short term you could see a retracement up to 18,200 / 18,000 points.

Descents up to 19,000 will keep the average bullish picture at least in the short term for the Ftse Mib.

As said before, I do not rule out climbs which, however, should not lead much beyond the 20.500 / 20.600 points, where profit taking could take place.

Personally I am a little afraid to buy in the height of summer, remembering that July and August are statistically weak months for the financial markets.

Let’s not forget that the American quarterly which will represent the worst quarter in American history in terms of profits will start in July, with forecasts between -30% and -40%.

Next month I would be very careful to get into the stock and wait for the bank and FAANG accounts to be published, to understand the real state of the listed companies.

As is known on the stock exchange, future prospects are always bought, but a reality bath could arrive in July and therefore see where the market will be positioned.

Among the banks today Unicredit shows a little more liveliness than Intesa Sanpaolo. What is your view on these two bankers?

Unicredit today is slightly outperforming the other banks and today travels around the 8.5 euro area, after having reached the 9.2 / 9.3 euro area in early June.

The stock could move towards these values ​​because it seems that with slightly positive news on the macro front, the banks could do well.

As long as Unicredit defends € 8 / 7.8, it will continue to rise and the target would be in the area of ​​€ 9.3 / 9.5, corresponding to the lows marked in August 2019.

On the contrary, the loss of 7.8 euros could lead Unicredit precipitously towards 7 euros.

Intesa Sanpaolo today earns a little less than Unicredit and from the relative highs of this month in the 1.8 euro area it has gone back a bit.

I believe that now the target for Intesa Sanpaolo is its own area of ​​1.8 euros, beyond which the title could extend up to 2 / 2.2 euros.

On the contrary, a drop below 1.55 / 1.5 euro could bring the prices towards the lows of this year in the 1.3 euro area.

FCA is shining today, returning to the 9 euro area. Is this a title to rediscover for a purchase?

The automotive sector has recently been performing well in Europe, benefiting from the latest indications from the manufacturing sector.

FCA is trying to get back above 9 euros, beyond which it will be able to lengthen the pace towards 9.4 / 9.5 euros.
I don’t think the stock has room for upside beyond the 10 euro area, while only below 8.5 euro FCA will risk a drop to the May lows in the 7 euro area.

Basically I remain positive on the title also because the indications on European SMEs have been good, this allows us to look with cautious optimism at the auto sector in the Old Continent.

Saipem today rises more than ENI in the wake of the rise in oil. What indications can you give us for these two oil stocks?

Recently, the oil sector stocks in Piazza Affari have surprised me a bit: with an oil in a race with almost no brakes, it seems to me that ENI has not followed much.

The title rose to 9.5 euros in early June, but this time it must be said that the Ftse Mib still cannot break the 20,000 points because a title of weight like ENI struggles to rise, despite the rise in oil .

It must be said that the title does not even have any hints to the downside, but it is surprising that you struggle to rise with a black gold rising.

I remain positive on ENI because it seems that oil has changed its face and it seems that the mood is very positive.
Energy demand is recovering, so I think ENI can still recover 9.3 / 9.5 euros with the first target.

Only a downward rupture of 8.5 / 8.3 euros would make me change my mind, but for now the suggestion is to keep the positions on ENI and buy again on breaking the 9 euros, with a target of 9.3 / 9.5 EUR.

Saipem is more volatile than ENI and although it is linked to the oil sector, it is not strictly oil.
The stock recovered slightly, but what I noticed is that even in America the protagonists of the oil sector are struggling to react.

If the markets continue to rise, minimal support should also be given to oil stocks.
It seems to me that Saipem has lost a bit of appeal in the eyes of investors and looking at the long-term chart, you can see that it is quite depressed.

I would buy Saipem only on the breakdown of the 2.6 euros which would certify a renewed interest from investors, otherwise I would leave it alone.

For the moment I would have a neutral attitude on the title to be re-evaluated only over 2.6 / 2.7 euros.

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