After the losses registered in the last session of last week, this Monday the markets point to a Monday of lukewarm gains. Still on the minds of analysts and investors fear of rising inflation as economic activity increases, something that has weighed down in the last hours the possibilities that the European selectives have given continuity to the bullish advance that has starred in the Ibex 35 in the last sessions.

“The lack of support has diminished the credibility of the last rise in the national selective,” says Joan Cabrero, technical analyst and advisor to Ecotrader. “The European stocks have not managed this week to mark a new rising maximum above those they established two weeks ago; in fact, only the Ibex 35 It has succeeded and this lack of support is something that reduces the credibility of the last rebound of the Spanish index and reinforces the idea that we have that hikes may be limited to resistance at 9,000 points“, Explain.

In Europe the roof of this side is in the 4,040 points of EuroStoxx 50 and in the German Dax 30 it is in the 15,500 points and the minimum required to show strength is to overcome the resistances evidenced in the 13,355 points. As long as these levels are not beaten, the investment sentiment will continue to weigh more heavily overbought that has been generated over the last few weeks.

When to buy again?

In this context, it must be borne in mind that for overbought to disappear “it is necessary for the European stock markets to choose well to move laterally, consuming time, or they form a rapid correction in depth that could lead the indices to fall by around 10% from the last high they would have marked in the current rise“, says Cabrero in his weekly strategic commentary this Monday.

For the moment, the European stock markets have chosen to consume time, something common in contexts of great strength such as the current one. Therefore, from Ecotrader It is not ruled out that an eventual fall may find a brake before reaching that 10% fall from the maximums indicated. Specifically, a return to the 3,785 points, which would be a perfect throw back or a return to old resistance such as the highs of last year.

“So far, I am not in favor of buying the stock market with a medium / long-term orientation. If it continues to rise, we will continue to enjoy the numerous strategies open during the last weeks and months,” says Cabrero.

For readers who want more: Ecotrader, the premium investment strategy portal

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