It will tear you apart like sardines

Written by the Apostle Menthos

It is very strange the statement made by JP Morgan analysts that upgrading the Athens Stock Exchange to developed markets is a bad idea. An opinion that exploded into reality immediately after Moody's thought to give us what the whole world swears by and is secretly proud of: investment grade. Now, the suggestion that a country should remain in emerging markets with Chile and the Philippines and not move up a tier to developed markets, thus remaining with the elite and being “smaller” than Austria and Portugal, was so inappropriate that some even It could turn the matter into an insult to the Greek stock market and economy. It's like telling the country's four biggest football clubs – Olympiacos, Panathinaikos, AEK and PAOK – not to try to enter the big salons of the Champions League, because it is “better” to remain on the sofas of mediocre results. And mystery. If you say that to Marinakis, he'll tear you apart like a sardine.

What the analysts mean is that for “our interest”, do not go up but stay where you are, as if you dare to change the level, that will make Greece the smallest market in MSCI Europe, while we are now better in Europe. Emerging Markets in the Middle East and Africa from MSCI (!). Of course we will treat it as a legal matter and we will fight to keep up with Europe and the European Union, because that is where we belong. Regardless of what some say, the path to upgrading the Greek Stock Exchange has been set and has not changed. In June, the exchange will be placed on the watch list, and within one year, i.e. 2025, it will move to mature markets. By then it is very likely that the “only” three stocks that meet the $5.8 billion market capitalization criteria for MSCI Europe will become 5 or even 6 stocks. So why is JP Morgan seeking to boost the outcome of this entire effort?

Moving now to the analysis of the short-term chart, we see that the general index missed the medium-term ascending channel “C” at 1,410 last Monday with a sharp decline of -2.40%, but after that it did not provide what was statistically expected. It made a sideways movement without significant downward pressure. In fact, at the time of writing, last Thursday morning, the index was testing the high area of ​​the last thirteen years between 1438 and 1430 units. But above that, special care will be needed, as the prevailing view in recent weeks, that “the overall index has peaked and is heading towards a correction,” has left many investors liquid. So, if the general index breaks the 1450 level upwards, the “forced” redistribution of all this liquidity will push the market strongly towards the 1500 level, completely changing the current perception. On the contrary, in order to spoil the mentioned scenario, the indicator must strongly lower the support area from 1390 to 1384 units.

Moving now to the long-term picture of the general index, through the semi-monthly price chart, it is now clear that the sideways movement aims to create a strong buyer base in the range of 1450 to 1350, centered at 1400. Therefore, this wave will first confirm that the index has historically escaped from the suffering that He was exposed to it in the intervening years from 2011 onwards, and secondly, it would open the massive gate allowing him to move within the 1,400-year-old bullish zone. points, reaching the 1725 points that the index read in May 2010. That is, we are talking about an increase of +23%.

In the short-term recording of the FTSE/ATHEX Large Cap index, we mark the stamps of the stabilizing movement it has made over the past 49 days. The planning limits for the movement are for buyers 3,500 units and for sellers 3,340 units. A confirmed break above or below the pattern will also give direction in the short term. Hence, while a bullish breakout will pave the way for 3,650 units, a bearish breakout will put the index in the arms of the Keltner trend at 3,290 units.

I conclude with the banking index, which has now been upgraded following the public offering of Piraeus stock and increased its weight in the market, drawing investors' attention on a daily basis. So here we see that the indicator has created a large base in the region from 1200 to 1180 points. As long as this area withstands the pressure of any qualifiers, it will consolidate, causing an upward breakdown of 1270 units and the index moving towards the next level of 1325 units. A sharp change of scenery with only two sessions fully registering below 1180 units.

* Apostolos Manthos is responsible for technical analysis and investment strategy

** Copied from “Kevalayo” newspaper