Middle East disrupts the market

Written by the Apostle Menthos

The very unpleasant and worrying developments that seem to be occurring in the Middle East would likely trigger a broader conflagration, and would send the market into chaos with the overall index failing prematurely in a bullish breakout scenario above the “W” pressure curve. Since February 6, the curve has stopped the rush of buyers five times and thus recorded the corresponding local highs.
But what now with new developments just around the corner and with the general index recently correcting to -4.85% which is a long term high of +30% from 1105 points to 1437.55 units?
The essential planning element in the movement that will occur in this difficult week is to see the index behavior above the level of 1364 to 1350 points or a decline of -3.5% from last Friday’s close. We are talking about a crucial area where we meet the specified exponential moving average of the 55-day long-term Fibonacci trend, the recent local bottom and the horizontal support at 1,350 units. Therefore, maintaining this level will rethink the market's ability to absorb the shocks of unpleasant developments by forming a new base of buyers around 1,350 units.

However, in the opposite case, if the area in question declines with a significant increase in trading volume, the indicator will take a strong downward slope rushing below 1315 units and towards the “solid” support area of ​​1290 to 1280 units or up to -11% of the high We saw it at the beginning of last March at 1438 units, but the passage of the downward movement below that will put us in great trouble as it will begin to exceed the 50% Fibonacci retracement level of the strong upward movement. Last October, it was 1,272 units.
Therefore, it would be good for the index, if the climate in the Middle East deteriorates further, not to fall below the 1,300 unit limit, declaring its strong resistance, with a strong bulwark of large trade deals such as the one worth $2 billion. EUR between the two large groups PPC, Mytilene and TERNA Energy with a source for the complete privatization of the National Bank, as well as positive financial results for the first quarter of 2024 which will take place after the opening of the curtain on April 25 by Mytilene.

The banking index is also important for sustainability given the greater weight that banks now have in the overall market movement. The first thing we will likely see here is the indicator entering the rising Keltner channel which is currently passing through the 1160 area or a percentage distance of -3.50% from last week's close.

So a breakout of the mentioned channel with strong trading volume and a daily close below 1160 units will shine a light on the downward path leading below the previous low of 1145 units and towards the strong support level of 1110 to 1090 units. Here the distance from last March highs of 1270 points to the lower chart support we mentioned represents a decline of -14% in percentage terms.

Naturally, in order to stabilize the situation without further serious losses, the banking index should not write values ​​lower than the area of ​​1145 to 1135 units.