– Wall Street is having a rough September, what key levels should investors watch in the three major indices?
As you say, since September 6 we are in a corrective phase. It is something that has been happening in the weeks that there are days of options and futures expiration. It is something that has happened during the previous week with increases after expiration. In the case of the S&P 500, declines have always been slowed at the 50-period average and now support is at 4,435.29 points with a longer-term support at 4,375 points and has resistance that should be watched at 4,505.45 points. The trend continues to be upward, although it is true that there could be sales by mixed investment funds. However, we are seeing that whenever the market falls, retailers enter.
In the case of the Nasdaq, it has not addressed the average of 50 sessions either, although without reaching support and the support is located at 15,315 points although it is true that there are indicators such as the ‘momentum’ that show us that we are in a corrective phase, although this may be through a longer lateral movement until the expiration of futures. Resistance is at 14,903 points, which also coincides with a volume congestion zone, although in general the trend is upward and it does so without losing support.
In the case of the Russell 2000, the index of small and medium-sized companies, it will give us many clues in the future, because if it exceeds the lateral range in which it has been trading for a long time and breaks the resistance of 2,357 points, it would be a symptom of strength that can support the rest of the stock indices. Although we must also watch that it does not lose the support of 2,098 points.
– Do you see better appearance in the European indices?
If we look at the EURO STOXX 50 and the relative strength indicator, it had been performing worse than the S&P 500 since August 19 and since September 13 it started to improve against the S&P and now it would be more or less on par if Compare to the Wall Street benchmark. We have a corrective phase in the lateral range and it is not being too abrupt either. The 4,240 points are resistances, which if broken would invite us to see greater rises although, for the moment, it holds the average of 50 periods and the upward trend. As long as the stimuli continue, the money will continue to be concentrated in equities and liquidity that seeks profitability.
In the case of the German Dax we are seeing a similar situation, it is leaving us a long-term lateral range and the key support is located at 15,450, the trend is still bullish.
– How do you see the Ibex 35?
In the Ibex 35 we have the first support zone at 8,630 points, the minimum yesterday was 8,626 points, so it is an area to consider. At the resistance level, we would talk about 8,848 points. In this case, we do see a broader relative weakness relative to the S&P 500 since last August 23. At a time when the energy sector is seeing great pressure because Iberdrola has a large weighting within the Ibex 35 and because the government regulation hurts the profits of companies, which means added selling pressure for the selective.
– What values of the Ibex 35 do you see interesting at the moment?
We are going to have a period of high inflation throughout the world and therefore I think the best thing to do is to seek refuge from that inflation. What sectors can protect against inflation? We have the cement and construction sector, in the case of Spain we can talk about companies such as Inmobiliaria Colonial, MERLIN Properties or Ferrovial … Although at this moment I would stick with Lar España, which is listed at a discount due to fundamentals and has a good technical aspect, with a theoretical intrinsic value at 6.60 euros and is listed at 5.32 euros and Sacyr, which also trades below its theoretical intrinsic value and has resistance at 2.21 euros.
If we go to the basic materials sector, we have companies like Acerinox and ArcelorMittal, which are also undervalued by fundamentals despite the increases they accumulate in the year. In the case of Acerinox, if it exceeds 11.90 euros, it could give us another section of increases, another scenario of upward momentum. Then there are companies that are doing well, such as Inditex, Telefónica, Vidrala or Fluidra, although far from supports, Almirall, Ercros or Viscofan.
– Which cryptocurrencies do you see looking the best for very short-term investors?
I think you always have to watch what bitcoin does, because if bitcoin is in an uptrend despite entering corrective phases, that always benefits alternative cryptocurrencies, the so-called ‘altcoins’. We are seeing an interesting thing, bitcoin has held up well the support of the long-term average, we would have the 61.8% Fibonacci at $ 49,200, which if exceeded, the most normal thing would be to see a turn in V and the surpassing of the Previous highs at $ 52,900 and triggering a second short-term bullish momentum to record highs. If bitcoin does well, the rest of the cryptocurrencies will also do well.