The escalation of geopolitical tensions at the start of the week put pressure on European and American stock markets, which are now more vehemently interested in the first support levels they face, but also in the buying zones in which the he return/risk equation for taking positions on the market would be more attractive.
In the case of the Ibex 35, operationally, the levels which since eco-retailer have been defined as optimal to buy back the Spanish stock market, they are in the September low, at 11,138 pointsand the support level to which consolidation could bring the index in the worst case scenario is that of 10,900/11,000 pointsthis is where it runs the bullish guideline that has guided increases from the 2022 lows.
For its part, in the EuroStoxx 50, the support environment for 4,675/4,700 points This is one to watch and the biggest risk is that it ends up seeking the August lows around the 4420/4480 points.
In this context of approaching the first support levels facing the European stock markets, the market invites us to monitor the behavior of certain indices which can give clues on the path that the reference indices in Europe could take, such as the ‘EuroStoxx and the already mentioned. Ibex.
Eyes in recent hours have turned to the EuroStoxx 50, but in its Total Return version, the one that takes into account the distribution of dividends, which has recently lost the upward trend born from the combination of the minimums of 2022, 2023 and August 2024. “This move opened the door for the main European benchmark to seek support at the August low at 10,900, which is still 3.6% away,” explains Joan Cabrero, technical analyst and strategist at Ecotrader who It is unlikely that a reliable upward trend can be observed in continental stock markets. without first this key support and red line be put to the test.
It is also necessary to monitor the behavior of the Dax 40 because one of the most selective which can give the market clues on the directions that investors can adopt in the weeks to come. The German index 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 configuration would be confirmed if it lost the 18,900 points which, for the moment, resist the bearish progression, but which were already tested during Tuesday’s session.
In search of the “Christmas Rally”
The tension on the markets manifested itself yesterday with declines which exceeded 2.1% at certain times of the day on indices such as the Ibex 35 and the EuroStoxx 50, although at the close, the declines finally been less than 1%.
However, this movement and the resulting supportive approach have served to highlight in recent days the opportunity to buy back the European stock market that is available to the investor, who – if these declines materialize – would face to “a much greater profitability/risk equation”. attractive than a few weeks ago”, explains Cabrero. “In fact”, says the expert, “if we have this decline that is taking shape in the stock markets, it is likely that we will have a Christmas rally easier to exploit than if there was no such drop.
