Market outlook

Weakness doesn´t dissappear from the market´s sentiment. We begin a key month, October, traditionally a scenario for big sell-offs. Next week it´s important to watch over supports, such as the 10.500 points of the Dow Jones. We´ll see if the oversold status that many indexes show from a long term perspective can bring about a technical recovery.

Stocks markets start their recovery

Bonds start to fall and investors seem to flee from gold. Is that a sign for the stock markets to soar?

Coca-Cola: The 56-dollar resistance break-up would confirm a rising scenario

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The world´s largest beverage company seems to stay on a very quiet, even lethargic, movement. Its outlook appears to be weaker if we compare it with the Dow Jones´ behaviour, which this stock belong to, because, as the most popular Index of the New York Stock Exchange has been able to overtake its 2010 high level, which was touched by the 20th of January, Coca-Cola has remained very far from its analogous zone.

The main reason for this seemingly lack of dynamism should be found out on the robustness of the 56-dollar resistance, which has concentrated too much selling interest. This level has eventually become an impregnable fortress for the bullish side. Therefore, it will need a consistent effort to be hit.

However, despite the short-run scenario difficulties, this security remains upwards from a long-term perspective. The key technical element continues to be its 200-session moving average, which is a very reliable statistical element for the current analysis. In fact, since this lagging indicator was overtaken by the prices by the end of May 2009, the most logical strategy has been to keep long positions. Even the first quarter of 2010 correction was unable to invalidate the hypothesis that a new upward cycle had begun.

To sum up, Coca-Cola shows a favourable outlook for a long position strategy, despite its short-term sideways situation.

The recommendation is to hold. Stop loss if it breaks the level of 52.40 dollars. 

Google can be willing to make an upward impulse

Google has spent most of the past two months in a sideways movement. This short-term range - bound technical situation doesn't imply that the Internet search technologies company is apparently showing weakness symptoms. In fact, we must take into account that Google has risen about 129% since November 2008.

Having said that, its current lateral move seems to be a reply to its previous spectacular recovery. Because of that, its quiet technical situation could be a strategy to consolidate its substantial prices increase. Thus, its short-term intention would be to try to make a new upward impulse to reach higher levels.

Therefore, Google's scenario remains positive. There are at least two kind of elements which support this hypothesis:

First, the resilience and continuity of its rising tendency. Despite the prices correction between the beginning of January and the 25th of February 2010, when the Internet-based services and products corporation fell from the area of 629.50 dollars to the level of 520 dollars, the main uptrend has always remained intact.

Secondly, the supports of 520 and 550 dollars should supposedly play a crucial role in the coming weeks. If they have been able to prevent further falls, they could continue drawing new buyers around these levels. 

Consequently, this group of technical parametres could eventually bring about a new upward impulse, as long as the bearish positions become exhausted. 

The first obstacle is the resistance of 590 dollars. If finally this level is overtaken, the next goal would be the maximum price reached in 2010, that is 629.50 dollars.

The technical recomendation for Google is to buy. Stop loss in 519 dollars.

Allianz: As many German securities, its technical situation has improved significantly

Allianz has been one of the Eurostoxx 50 index´s components whose performance has been more outstanding int the past eight weeks. Since February the eigth, the Financial services provider has soared a 22%.

Despite the vertical increase, its technical situation hasn´t experienced any deterioration at all. So far, it has formed two consecutives higher-lows. The first one around the level of 81 euros and the next over the area of 87 euros. This investors' willingness to pay higher prices points out that the German company´s scenario is gradually improving. Currently, the prices are trying to accumulate bullish interest near the zone of 92 - 92.50 euros. As a result, this area could become a new support which would confirm its short-term upward trend.

Apart from these successive supports, there is a second crucial element: its rising channel, which has been so far an excellent framework to indicate the prices the way to follow. In other words, this channel has driven perfectly the share prices towards a substantial recovery, which has been consolidated after the resistance of 90.00 euros break-up.

The correction that Allianz has experienced this week has been very useful to diminish the overbought situations of several technical indicators, such as Williams and Stochastic. Consequently, the prices could keep upward potential yet.

The recommendation is to watch over the level of 92 euros. As long as it remains intact, a short-term investor should keep Allianz within his/her portfolio. It's advisable to set a stop loss in the area of 91.50 euros.

Citigroup has developed successive falling and rising trendlines

Citigroup´s debacle has been one of the most representative amongst the Financial securities, which in 2008 underwent a severe correction. The International Financial conglomerate that competes in corporate, consumer and investment banking, reached at the end of 2006 the level of 57 dollars in the Stock markets. However, by the beginning of March 2009, its shares price was just one dollar.

Since then, it has experienced a significant recovery (about a 332%) mainly as a result of the North American Government's $700 billion bank bailout. Nevertheless, its increase has not been homogeneous at all. In fact, if we look at its one-year chart, we realize that there have been successive upward and downward movements. Despite this apparently unclear technical situation, Citigroup has formed three consecutive supports (1.00, 2.20 and 3.10 dollars) which reveals a gradual technical enhancement.

The most relevant feature of the short-term scenario is its upward trendline which began in the support of 3.10 dollars. As long as it remains intact, coherence demands long positions, despite the fact that prices can face some correction in the coming sessions.

The recommendation is to buy. Stop loss in 3.80 dollars.

Nokia: Be attentive to the level of 12 euros. A potential rising cycle could be coming

As we´ve seen in previous analysis, most Stocks Markets have initiated a remarkable recovery since March 2009. As a result, many securities have experienced significant increases whose amount depends on the industry, the geographical area and many other different variables related to Microeconomics and Macroeconomics. 

Despite this general improvement, the mobile phone supplier has remained in a lateral situation, whose technical movement has swang between the support of 8 euros and the resistance of 11.50 - 12.00 euros. If we focus on the current chart, once the falling channel was broken up, Nokia´s technical situation can be characterized by a lasting steadiness for the whole 2009. In fact, its recovery beginning can´t be properly considered until February 2010, when bullish positions started to demonstrate that could overpower bearing interests.

The Finnish company is going to face a key level during the coming sessions. The resistance of 12 euros will decide if this security can eventually develop a new rising cycle. Some leading indicators are too overbought, which could prevent the telecom enterprise from continuing going up. Anyway, its technical outlook has improved considerably.

The recommendation is to open long positions if it overtakes the level of 12.20 euros or it undergoes a correction to the zone of 11.30-11.40 euros. Stop loss in 10.95 euros.

Microsoft: Despite its slow pace, its primary structure remains upwards

Microsoft seems to have moved at a slow pace for the past two months if we compare with other Nasdaq´s securities, such as Cisco or Apple. In fact, its increase during this period (8%) has been considerable lower than these two companies, which have risen a staggering 20% and 22%, respectively. 

Despite this meagre rise, its technical situation remains bullish. As most stocks, its recovery began in March 2009. However, its most relevant moment took place two months later, by the beginning of May, when prices went through the level of 21.00 $. This break-up entailed a new upwards cycle and, consequently, the former downtrend eventually finished.

Therefore, Microsoft keeps its rising structure, which is represented in the chart by a primary tendency, whose slope is moderate (an angle of 18º). It´s remarkable the fact that at the end of 2009 the speed of its recovery increased significantly. This rhythm increase allowed this security to reach the level of 31.50 dollars before it could be expected. 

By contrast, in 2010 the company owned by Bill Gates has experienced two different moments: the first one, which involved a 13% decline, and the current short-term rebound, that is the technical element which a coherent strategy should be built on.

To summarize, investors should  take into account that Microsoft remains in a rising scenario, despite the fact that this year has not already recovered its higher levels. The mission for a short-term investor consists of watching over the first supports, placed on 28.00 and 27.50 dollars.

The technical recommendation is to hold. Stop loss in 27 dollars.

Apple: Prudence must be the strategy after an all-time high is achieved

The recovery that Apple Computers has experienced in the past year is really impressive.

Its behaviour is exactly the opposite to what had happened in 2008, when the collapse of the Stocks Markets had undergone an accentuation by the last quarter of that year.

Nevertheless, at the beginning of 2009, a tripple-bottom was formed around the area of 82 $, which confirmed a reversed pattern and, therefore, a cycle shift.

From that moment, the second quarter of 2009 began with a staggering increase for the securities of the American multinational corporation. Apple climbed around a 60% since March to May 2009. Nevertheless, its uptrend didn´t finished after this remarkable achievement. In fact, it continued to soar for the next ten months.

During the session of March 25th 2010 the computer manufacturer reached the level of 230.97 dollars, that´s an all-time high, which accounts for a 180% rise from a year ago.

However, this stock is beginning to reflect some exhaustion. The RSI is showing negative divergences, which could involve a significant short-term decrease. Besides, the channel bottom could behave as a strong resistance, which could interrupt such a enormous appreciation.

The technical recommendation is to sell at the current prices. Stop loss in 236 dollars.

Cisco: Bullish positions overpower a difficult resistance

Cisco´s movement confirms the significant improvement of Nasdaq´s main components. The supplier of networking equipment for Internet has been able to go through the difficult area of 24,80 dollars. It achieved this goal during the session of March the eighth, when the resistance was clearly overtaken. This movement strength assessment implies to evaluate a key data: the volume which came along the rise. The chart points out that this statistical data was specially high, compared to the 30-day moving average. Consequently, we can infer from this technical indicator, that the shift towards a more bullish scenario was validated for a mass of investors.


Anyway, we must not forget that the short-term way doesn´t lack obstacles. The next goal is the resistance of 27,80 dollars, which approximately coincides with the rising channel top.


The recommendation from a short-term perspective, is to maintain buying positions. Stop loss in 25,50 dollars.

ebay: The resistances break involves a technical situation enhancement

Ebay has showed a perfect equilibrium for the past seven months, which has led it to design a perfect rectangular shape, a very tipical pattern that happens when there is a balance between bullish and bearish expectancies. Nevertheless, in March, the bullish strengths have overpowered in the short term scenario. Consequently, the new technical situation seems to be more appropriate for long positions. In any case, the rise has been extremely vertical. Because of that, some correction could appear in the next sessions.

The recommendation is to take advantage of a potential decline to buy stocks of "Ebay". Stop loss on the level of 23 dollars.

Nokia, is the lateral movement over?

The Finnish Telecom company underwent a staggering fall in the Stock Markets, from the level of 28 euros at the last quarter of 2007 to 7 euros by the beginning of March 2009. Since then, Nokia has kept a lateral movement between the support of 8.40 euros and two resistances, which are placed approximately on the level of 11 and 12 euros. This technical situation has led to a balance between bearish and bullish positions which involves an ideal scenario to make an aggressive trade for short-term investors. Currently, the horizontal situation remains unchanged. Therefore, the sooner the prices approach this resistances, long strategies should be closed. Volume continues being very low. Consequently, there are not technical reasons to open a long strategy in the short run.

If prices overtake the resistance of 12 euros, the situation would be completely different. In that case, bullish strengths would take over the battlefield and it would be the chance to initiate a long strategy.

BBVA puede empezar a recuperarse de las fuertes caídas de este año

BBVA acumula unas caídas de un 30% desde que en enero alcanzase los 13,30 euros. Aunque aún no se observa una figura de cambio de tendencia, el RSI comienza a mostrar divergencias alcistas que pudieran llevar al valor a vivir un período de recuperación si éstas llegasen a desarrollarse. La recomendación es de compra para trading con stop loss en 9,00 euros.

Siemens realiza un desplazamiento lateral entre los 60 y los 68 euros

Uno de los miembros del DJ Eurostoxx 50, Siemens, presenta un comportamiento de lateralidad. La recomendación es aprovechar esta situación, entrando en posiciones largas en las cercanías de los 60 euros y vender a medida que el valor se aproxime a la resistencia de los 68 euros.