Geopolitical risks, change in cycle with interest rates, elections in the United States, fear of a landing not as soft as expected for the global economy… The threats weighing on the markets – and the planet in general – in the coming months the weeks and months are almost unquantifiable. However, trading floors in Europe and the United States are not reacting with fear. And investors shouldn’t have them either if they are able to continue to the letter a roadmap that includes the levels of stop Optimal places to sell if the bears take control.
This is what Joan Cabrero explains in his weekly strategic commentary and in the latest episode of the Market Strategy podcast in which the expert is confident in the fact that the Russell 2000 will follow in the footsteps of its compatriots, the Nasdaq, the S&P 500 and the Dow Jones. Industrial Jones, who They have already managed to return to the levels reached in 2021.
“My recommendation has been to trust the strong underlying uptrend, taking advantage of the declines we saw in September and August to buy. I continue to emphasize that there will be no reason to worry until key supports are lost, such as the September lows (which I called yellow line) and August lows (red line),” explains the technical analyst.
The expert, however, adds a new level to monitor in the short term: “The October lows will be the new yellow linethose of September will become the orange lineand those of August will retain their status of red line“, he explains.
In this context, we can only speak of short-term weakness and buyer exhaustion if the indices lose these lines. “On the operational level,” underlines the analyst, “the strategy that I propose is to do what I call the accordion with the exhibition, that is to say increase as prices continue to rise and reduce it as these supports give way“
In the meantime, high exposure to the stock market will need to be maintained until the Russell 2000 reaches its 2021 highs. Once this is achieved, it will be a good time to cash in partial profits, especially in companies that experienced verticals. has increased in recent weeks.
