The rebound that has occurred in recent weeks in the selective equity index, the Ibex 35, has led it to test the area of ​​9600 points. This is the last resistance before reaching the psychological level of 10000 and in any case we are in a zone of annual highs in the last twelve months. On the other hand, it should be noted that as long as it remains at these levels there is a real possibility of a very important break up. Not surprisingly, the fact that the indicators of the national index remain positive is in their favor. And this is something that plays to the advantage of taking positions in the stocks with the best technical aspect.
In this context, it's crucial to note that the Ibex 35 is caught between two very strong currents that could lead to either an upward or downward trend, depending on how this equity market evolves. This would allow it to finally break free from the sideways trend it has been experiencing for the last two years, with trading ranges between €8.500 and €9.800, and a potential upward breakout now possible . Therefore, the trading volume from this point forward will be very important.
The Ibex 35, in any case, is one of the worst-performing stock market indices in Europe. This is due to the specific characteristics of this financial market, but above all to its excessive dependence on the banking sector, which has been one of the most bearish during this period. Furthermore, we cannot forget that the benchmark Spanish index has been hampered by political factors in Spain, preventing it from reaching higher price levels. It shows a divergence of almost 5% compared to other indices in our European context.
Ibex 35: stronger values
In any case, there are a number of listed companies that are performing better this year. One such example is the electricity sector, whose share prices have soared. To the point that many of its stock values ​​are very close to their annual highs, and in some cases, even all-time highs. For instance, Endesa and Iberdrola have reached levels of €25 and €9 per share, respectively, with appreciations exceeding 15% in the last twelve months.
Another aspect to consider is the strong performance of some services sector stocks. They have been among the biggest beneficiaries of the current economic climate , creating real business opportunities and generating high returns for small and medium-sized investors. These returns are based on intermediation margins ranging from 5% to 30%, depending on the specific offerings listed on the Spanish continuous market. This is despite the fact that most of these companies are small and medium-sized.
How far can you go?
One of the questions many small and medium-sized investors are asking is what levels the benchmark index of the Spanish stock market might reach. Well, if it surpasses the psychological threshold of €10.000, it's possible it could reach nearly €11.000 . This would mean significant upward potential, presenting an opportunity to open positions now. It would signal the start of a very attractive upward trend for stock market investing. Despite any corrections that might occur during this period, this would still allow investors to enter positions at a more competitive price than currently available. This way, there would be no surprises that could negatively impact investment capital in the face of a potentially undesirable scenario in international equity markets.
While on the other hand, if the 10.000 level could not be overcome, there is no doubt that the downward trend would be very intense from that moment on. With a stronger selling pressure than usual and that could take the Ibex 35 to levels below 9.000 euros. In this case, there would be no choice but to abandon the positions in the face of what may happen this year. Because there would be many more risks than those enabled at the moment and many euros could be lost along the way. In other words, the best position we could take is to be fully liquid and wait for the selling stream to end. Being one of the possibilities that can be developed from these precise moments.
The Ibex trades at a discount
There's a key factor to consider when developing any investment strategy, and it will depend on your profile as a small or medium-sized investor. This can range from more defensive positions to purely speculative ones, but both share the common goal of generating returns on your savings over time. Another option is to build a savings portfolio for the medium and long term in stocks that pay dividends to their shareholders. Furthermore, it's important to remember that the Ibex 35 is currently trading at a discount compared to other European stock exchanges, a factor that could work in your favor.
From this point of view, caution should govern actions on the stock market by retail investors. With the primary objective of preserving savings over other technical considerations and maintaining the balance in the securities account. Not surprisingly, this is after all one of its most immediate goals, as has been shown in recent years as an investment strategy. So that in this way, there are no surprises that could alter the capital of the investments, in the face of a foreseeable unwanted scenario in the international equity markets. With a control over the operations in the stock market and that can help you improve your position in the financial markets.
Decisive moment in investment
Another aspect to consider is that the Spanish stock market could recover the ground lost in recent years. In this sense, it could be a business opportunity to make savings grow from this point forward. It's worth noting that the indicators in the national indices remain positive, a very relevant factor for stock market investors considering taking positions now. However, it's true that greater caution than ever will be necessary to avoid taking unnecessary risks during this period.
Although everything will depend on the fact that in the end the level we are talking about can be exceeded, it would probably take the index to 10000. A level that divides the buying current from the seller and from which we will have to be very attentive to what may happen in the next months. Without a priori, absolutely nothing can be ruled out and it is open to all scenarios. Not surprisingly, this is after all one of its most immediate goals, as has been shown in recent years as an investment strategy.
The stock market negotiates 40.000 million
The Spanish stock exchange traded a total of €40.927 billion in equities in December , in line with the same month of the previous year and 12,8% less than in November. The number of trades in December was 3,15 million, 14,5% less than in the previous month of 2018 and 6,3% lower than last year. Meanwhile, fixed-income trading amounted to €24.965 billion. This figure represents a 0,9% increase compared to the volume recorded the previous month. Total trading volume for the year reached €319.340 billion, representing a 67% increase compared to the twelve months of 2018.
The trading volume admitted for the month was €20.052 billion, representing a 22% decrease compared to November. The cumulative growth in new issues through December was 4% compared to the same period of the previous year. The outstanding balance grew by 1,9% year-on-year, reaching €1,6 trillion. Finally, the financial derivatives market saw a 2,9 % increase in trading volume during the first twelve months of the year compared to the same period of the previous year. This constitutes the actual state of the financial markets in Spain during this period, according to data provided by BME.