He EuroStoxx 50 in its Total Return SX5R versionwhich takes into account the distribution of dividends, last week lost the upward trend born from the combination of the minimums of 2022, 2023 and August 2024. “This opened the door to the main European reference to seek support for August lows at 10,900, which is still almost 3%,” says Joan Cabrero, technical analyst and strategist at Ecotrader, who doubts a turning point. reliable bullish trend can be observed on continental stock markets. without first this key support and red line be put to the test.
“In this SX5R 10,900 point support environment, I would be in favor of buying the European stock market again with the ammunition it would need if it were able to reduce its exposure a few weeks ago when the Russell 2000 has reached the high zone of 2021,” says Cabrero, who also recommends monitoring the behavior of the German DAX 40, which threatens to confirm a bearish trend in the form of head and shoulders which would open the door to an additional drop of 4%. This trend would be confirmed if it lost the 18,900 points which, for the moment, are resisting the bearish advance.
The possibility of a return to the August lows that the EuroStoxx 50 opened in its Total Return SX5R version, after losing last week the upward trend born from the junction of the lows of 2022, 2023 and August 2024, as well as the threat of the Dax 40 to build a bearish head and shoulders pattern that would open the door to a further 4% decline only highlights in recent days the opportunity to buy the European stock market again was offered to the investor, who – if these declines materialize – would be faced with “a much more attractive return/risk equation than there is a few weeks,” says Cabrero. “In fact,” says the expert, “If we have this drop, it is likely that we will have a Christmas rally that will be easier to take advantage of than if there was not this drop”.
In the case of the Ibex 35, operationally, the levels that Ecotrader has set as optimal for buying the Spanish stock exchange are within the 10,900/11,138 pointsthis is where the uptrend that has guided increases from the 2022 lows lies.
And all this would be seen seasoned with a Wall Street where no one should be surprised that a fall finally occurs which will serve to relieve the overbought resulting from the last strong increases observed after the elections which ended up elevating Donald Trump to the rank of new president-elect of the United States.
