Index forecast / SPA35 / Our expectations
Short-term downward trend, lower tops. The price broke above the main resistance of the descending channel in upward direction, showing us that the bear are tired and most likely the movement will continue toward the middle-term trend. The price broke above SMA 200 in ascending direction and hold above it - positive signal. Technical indicator: CCI(50) - Above level 100 - in zone of over bought, but still does not reverse. This shows that the positive sentiment is still on the market.
Fundamental - the reason because the Spanish index was decreasing and the other European benchmarks were up, was Catalan referendum for separation from Spain and becoming separate country. Now, after a few votes later, we saw that Catalan can't separate and most likely the Spanish benchmark will catch up with the other european indexes.
Alternative scenario: If the price pull back below the levels of support and enter again into the descending channel, the positive scenario will be dismissed.
SL: 10350
Trader Bozhidar Arabadzhiev
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