June 28, 2022

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FTSEMib Technical Analysis: Be Afraid!

At such a busy stage, we usually give some tips that have been very useful in the past. Let’s do it again: this is almost always the case, before each landing the vibrations cease and sleep occurs

By Fabio Pioli Professional Trader and Founder of CFI Independent Financial Consultants (www.cfionline.it).

How important is this stage of the market! how much is it dangerous For those who are not aware of its greatness and criticality! Indeed, there is talk of asset formation, asset preservation or asset burning but in the average investor’s radar there is complete calm and clear calm, no or almost nothing to worry about.

It is almost always like this: before each landing the vibrations stop and sleep occurs; Antennas signaling danger go down and one is surprised to fall (see what happened in 2011, in 2015, in 2018, in 2020 (Fig. 1). And every time we’ve been here on these pages of SoldiOnline to predict it, remember?

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Figure 1. FTSEMib Future – Monthly chart

But this time it’s worse, much worse. Because the average saver has become addicted to drops and no longer sees them as a risk but as an opportunity. He’s doubly sleeping (please forgive me for the foul language but you won’t be effective in waking him).
In fact, in this period I have heard many who say: I made a mistake in the past (usually before 2020) to buy where are you (or Intesa San Paulobut examples abound) but I was good at keeping it and now I’m making money.

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Fatal error is a test of skill. The market forgives the mistake of bad buying, but the mistake of not managing risk by selling at a marginal loss Once an unwanted trend (stop loss) is noticed, the market pretends to forgive it once, twice but at the end is not forgiven. In fact, if we think about it, this is the only way to zero your capital.

I know very well that I will not be believed because the positive experience is now very rooted in the conscience of this type of saver but experience teaches me that sooner or later, on every security, on every financial instrument, the unexpected happens. But could this be the right time or will it be postponed entirely? As we said in the opening of the article, this market stage is really important and fascinating.

On the other hand, the long-term trend is objectively positive: With 23,000 futures held on FTSEMib, the level repeatedly identified as long-term support, the market, as well as each individual stock, stated that it is not bearish but bullish; So it could be ready to raise its head and exceed 28,100 points to travel about 36,000, which is the lateral projection that has been in place for more than 14 years now (Fig. 2).

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Figure 2. FTSEMib Future – Monthly Chart

On the other hand, there is the number on the daily chart, which appears bearish upon analysis and the strong side that lasted for more than 50 sessions which caused the price to explode (Figure 3).

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Both sides don’t bode well, and if the chart is to tell the truth, there are less than 21,065 swathes of downside opportunity and, unwillingly, the potential end game of the kind of savings we’ve been talking about.

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Figure 3. FTSEMib Future – daily chart

How is the question resolved? gradually. First of all, we consider that the level that acts as a ceiling relative to the drop (previously 26000) is now passing 25200 points. This level, if exceeded, could represent reason for partial optimism. Optimism will surely prevail just above 28100 futures points on the FTSEMib index.

Second: We at our CFI Possible short signal on the Italian indicator About 23,700 points. This possibility, reporting the odds in favor of more than 80%, may be very significant.

Certainly, as already written, below 21,065 points, the downside trend will be obvious to everyone.

The analysis we report here is owned by its author, and the publisher – which hosts this comment – assumes no responsibility for its content and the purposes for which the reader will use it. The author declares that this presentation provides information that could impliedly or expressly refer to an investment strategy in relation to one or more financial instruments and opinions about the current or future value or price of such instruments and is intended as a marketing communication. As such, it does not constitute research prepared in accordance with statutory requirements intended to promote the independence of investment research and is not subject to any prohibition of trading by analysts and related persons prior to publication of research in investment matters.

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