The general index is looking for a reason to break away from the peak of the last 152 months, cooling the technical momentum oscillators that hit the maximum of 100 to “red” of 98.8 units. The index has the ability to “vent” the upward steam gathered in algorithmic mathematical models, without any significant downward corrections in between as you watch the index rally +28% from last October's lows.
So far November 6th to 13th recorded -3.50%, next January 12th to 17th -2.75%. The last time the common index did something similar, “overflowing” upward momentum oscillators, was in the period from December 2022 to March 2023. Indeed, even then, the index increased by +28%, reaching 1,140, 96. units. But there, the laws of graph physics kicked in, bringing a swift downward ripple of -12.5%. Of course, this does not mean that the general index will follow downwards even now, and sometimes statistics should act as a guide to the evolution of an index. Also, these technical indicators are about the short-term trend shown by the daily price chart because, as we will explain below, the trend picture we get from its long-term bi-monthly chart is not worrying.
Now in deeper chart analysis, we see that the general index is trying to build a new base of buyers above the 1,400 level so that it can move towards the next resistance area of 1,448 to 1,460 points that we have from spring. 2011. Upward movement governed by the ascending “C” channel. This formation is crucial for continuation as a possible downside break of its resistance at 1,370 units could provide the starting kick for the index's expected pullback towards the first support zone of 1,320 to 1,300 units. However, for now, two of the top weighted stocks in the index (adding 20%), National Bank and Coca-Cola HBC are strongly resisting realizing a short-term downside scenario.
I'll start with Coca-Cola HBC ( EEE ), which last Wednesday announced its impressive financial results for 2023, which saw volume growth, strong growth in earnings per share and an extremely high level of net cash. Proposes a dividend of 0.93 euros per share. In more detail, the group achieved a significant increase in its net income of +16.9%, a strong increase of 17.7% in its operating profit and a 21.8% increase in earnings per share, reaching 2.08 euros. A 10.3% increase in net cash flow to €711.8 million, with a comparable adjusted EBITDA ratio of 1.1x to net debt, reflects Coca-Cola HBC's strong capital position. Graphically, the stock has broken the resistance of the 27.70 euro area after almost 210 days, thus opening a communication channel with the high of 2023 in the zone of 29.90 to 30 euros. It should be noted that the stock was at 32 euros just before the start of the Russo-Ukrainian war.
I continue with the National Bank, which has given us its new, renewed, modern and competitive corporate image, with continuous investments of more than 700 million euros, with very positive news coming from its strong evolution in digital transformation. Among the top ten in Europe, it aims to be one of the few banks in Europe with fully digitized core banking in the next two years. The bank, which had 22.5 billion euros of bad loans and margin funds in 2018, today has only 1 billion euros of bad loans and funds, making it a serious entry point among European banks without much of a capital increase. Development course for the next three years. The evolution of the new national team gave a small upward push towards the 7.30 euro area, but it needs to continue upwards from 7.50 to 7.64 euros to say that it is escaping the gravity. A range of 7 to 6.84 euros applies.
I conclude with a longer-term, this time, chart analysis of the common index, where we trace its attempt to break through the 1,400-point bimonthly historical area ending February 29. The trigger for many was the incredible decline of -67% that followed from May 2011 to May 2012 to 471 units. Hence, this area will require its time graphically to consolidate so that the index continues its path towards the next long-term resistance level at 1,725 points.
* Apostolos Manthos is responsible for technical analysis and investment strategy
Reprinted from “Kefalio” newspaper
