June 2, 2023

Valley Post

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Ah, come with me

By Apostolos Manthos

In the election results, the Greek people changed “Ela me fora” to “Fyge me fora”. And so the various “progressive” verbal financial rubbish like nationalization or better to say by name … expropriation of water, National Bank, PPC and Helleniq Energy (!) With the imposition of total abstinence from investigations and mining of hydrocarbons, in addition to overtaxing by 90% of The “unimaginable” excess profits — as if they had found them buried in their backyard, not worked on — from companies listed on the Athens Stock Exchange were dumped exactly where they should be in the trash. As for the sound “tearing” in the form of economic science fiction projects with the symbols of “Dimitra” and “Odysseus”, it remains only to become teaching material in any universities that want to hear from this particular economist.

As it all appears, the walls of investment distress that had appeared on the horizon since about mid-February have been removed, launching the admirable view that from now on, strong prospects for both the Greek economy and the Greek stock market give us. . Perspectives stemming from the very strong financial results of the listed companies, tens of billions of euros from the largest investment program Greece has ever had at its disposal in the last 40 years (Recovery Fund, NSRF 2021-2027, Special Investment Programs, such as Industry 4.0, etc.) , this year’s amazing tourism wave, the much-desired upgrade of the country’s credit rating by international rating agencies, but of course also the upgrade of the Greek market from the developed market to the developing one that it is now.

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These numbers are very positive for the stocks of listed companies, but there is no need to rush, as they reach bullish rates in a very short period of time that cause rapid selling, possible short-term local peaks, and fragile support levels on the high steps. . The “chasing” stocks did not fare well. There are now stocks very close to their 2023 highs, but there are also stocks that still have plenty of room to show they’re just getting started. So don’t worry. The way the political and economic landscape appears to be shaping up to 2027, when investing is for the first time very much in our favor.

So after the election revelations, we return to the BAU (Business Asual) and to the daily study of the rich charting and fundamental analysis of listed companies in such a comprehensive manner that we scrutinize the equity investment leaders, not only for the next but for the next three years. After all, in a strong long-term bull market, serious rates of profitability also appear in the investment portfolio.

Turning now “without hindrance” to the big picture of the market through the monthly graphical analysis of the general index, we identify four very positive points for its subsequent course.

The first element lies in the fact that the index comes from the beginning of last October up close to 53% and so far it not only shows no signs of fatigue, but instead shows signs of an upward acceleration with significant breakout volumes.

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The second one is the upward break down of the giant resistance at 1150 units which was coming from the distant 2014.

The third element is the upward circumvention of the seven-year downward pressure axis in the total volume of transactions, with recent months beginning to exceed it, which confirms the significant change in market events. Of course, the CEO of the Hellenic Stock Exchange, Mr. Gianos Kontopoulos, also had a hand in this, setting himself the goal of bringing a “new era” to the stock market.

The fourth and most important is the ever-increasing strength of the 10-year bullish combination fundamentals that captures the inverted head and shoulders pattern, with the March 2021 neckline breakout at 830 units. In general, a very dynamic composition has been searching “by the book” for several months now. Here, based on the applied statistical science of technical analysis, the upward split of the mentioned neckline as a long-term target gives a rising head added to the price of the bullish slice. The addition makes the area 1550 or an upward margin of +27% from the current price levels. This target shows that it can be reached within the next 10 to 18 months. Not tomorrow.

In terms of current capacity in the overall index, the big change lies in the fact that the four systemic banks now control 25% of their traffic, with Piraeus (7.61%) and the National Bank (6.45%) taking second place. And the third place in the ranking of the most weighted stocks in the index behind the first Coca Cola HBC (9.60%). The five are completed by Mytileneos and Jumbo. But the recent rally, which was mainly directed at the heavy stocks in the index, has created a small distortion as the top ten companies out of the total 60 that make up the general index are now regulated, no less, no more. 60% of its movement.

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* Apostolos Manthos is responsible for technical analysis and investment strategy