One of the main catalysts of the last increases was the European banking sector and that is why it is worrying that the last bullish section that took the EuroStoxx 50 from 4,100 to 4,165 points , was not supported with new highs also in European banking.
This is another of the many details that warn that the bullish gas tank is running low and that it needs a refuel before we can see a continuity of the trip until targets that appear at the levels where European banks were trading before the Covid-crash. .
BBVA has its resistance to 10%
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At the beginning of June, the Stoxx Europe 600 Banks (SX7R), which is made up of the 40 most important banks in the eurozone, came within just over 3% of reaching those pre -Covid-19 highs that it set at 380 points.
Today, after the latest drops, this target is at 8% and the path will probably be greater if I am correct and in the coming weeks we will see a broader consolidation or deeper correction that will lead the European banking sector to reach the 330-point zone , very close to the April lows that it set at 320.
Up to that support range there is still a 7% margin of decline and its scope would see it as an unbeatable opportunity to buy back European banks in search of those highs of last year , which would then be at 15%. Think that if the SX7R banking sector reaches 320-330 points we would be buying a sector that would not present overbought and with a minimum potential of 15%, something that weeks ago did not happen and that is why I did not tire of repeating that banks were more a hold than a buy since the risk-return equation was not attractive.
With a fall to the April lows, everything would change and if that happens is when they will be able to buy banks again, hence I am going to indicate the levels where they could place purchase orders in the main Spanish banks as well as the objectives to assess.
In the case of Santander, it must be borne in mind that it is a matter of time before it goes to find the highs of last year and the area where it traded before the Covid-crash at 3.80 euros . So far there is still an upward path of 13% but the problem I see is that the first support worthy of note, which is located at the April lows at 2.75 euros , is at 17%. For the risk-return equation to be attractive again, the ideal would be to wait at least for a cut to 3-3.10 euros .
If that happens, the objective of 3.80 euros would be 25%while the support of 2.75 euros would be at 10%. This would already enter the correct parameters to buy. Santander has been on the Ecotrader recommendation list since last November 3, when it was trading at 1.74 euros. A fall to 3-3.10 euros would invite us to increase positions in the bank.
BBVA has already exceeded the highs of 2019 and 2020 in the 5.05-5.30 euros and everything indicates that it is a matter of time before we see BBVA look for the following objectives in the area of 6 euros , which is where it runs a downward guideline that arises from uniting the all-time highs of 2007 and those set by BBVA in 2015 and 2017 .
The optimal area to buy BBVA is around 5 euros and if it reaches this support it would have a potential of 20% up to those 6 euros and 45% of the 7.40 euros , which are the highs of 2017 and the next target to months seen. I very much doubt that with the strength that BBVA has shown is approaching or going to look for the April lows that it marked at 4.20 euros . BBVA has been on Ecotrader’s list of recommendations since last November 3, when it was trading at 2.62 euros . If it reaches 5 euros we would take advantage of it to increase.
Caixabank reached last year’s highs at 2.83 euros at the beginning of February , which was the initial goal we were managing. From there it corrects positions and the fall has already reached the top of the range of 2.55-2.44 euros , which is where I think the bank can be bought. With the downward potential that could still take away from the sector in general, it seems that CaixaBank could seek the area of 2.44 euros . There it would be a great target-seeking buy at € 3.80-4 .
Bankinter is another of the banks that has already reached the maximums of last year in the area of 4.82 euros and from there it corrects positions in a fall that is approaching the optimal purchase area of 4 euros. Between 3.80 and 4 euros, Bankinter is likely to resume its upward trend. Bankinter has been on Ecotrader’s list of recommendations since last January 6, when it was trading at 3.47 euros . At 3.80-4 euros it is likely that we will increase positions in the bank.
Banco Sabadell is the one furthest from the levels where it was listed last year in the 1 euro zone , which is the target to assess in the coming months. This delay invites us to take advantage of a throw back or return to the area of old growing resistance that now runs for 0.55 euros to buy . We have waited for it there for a long time. In the worst case, I understand that it could fall to 0.50 and I doubt that it will lose 0.43 euros.