Dominic Picarda’s Technical Take
One issue with investing directly in Spanish stocks is currency-risk. I firmly believe that in order to survive, the Euro will likely have to cheapen versus many currencies, including sterling. However, spread bets are quoted in sterling and so do not suffer from this disadvantage. While the IBEX has bounce from its early June lows at 5988, it has yet to surmount its 21-week EMA. Were that to happen, I would be much more willing to believe that we were in the embryonic stages of a new bull market. In the meantime, I’d be looking to short drops through the 21-day EMA. A revisit of the lows is not out of the question.
Nikkei 225 Japan’s stock market is a world leader when it comes to producing disappointments. Equities in the land of the rising sun have had countless false dawns during their long bear market since 1990. It would take a brave man to declare the Nikkei’s slump as having ended at the early-June lows of 8239. Still, it is possible that the Nikkei could surge back towards the 10000 level once the next round of global money-printing starts up.
I would be much more inclined to take long positions in the Nikkei as and when it got back above its 21-week exponential moving average, currently at 9001. Until that time, I would use the daily chart and go short each time it dropped below its 21-day EMA.
July 2012 | www.financial-spread-betting.com | 61