Greek banks may once again look attractive for traders. The banking sector index is within its downward sloping trend channel. Recent polls regarding the June 17 elections have given yesterday a good boost to all stocks and specially banks. The longer this positive mood stays, the larger the move. The index might be in a similar position as it was at the start of the year, where banking stocks rallied more than 100%. Of course the result of the elections will be crucial as to the possible money inflow in the market or potential outflows from the banking sector due to fears of collapse.
National bank of Greece monthly chart (log scale) clearly depicts 5 waves downwards. I won't get into pointing out possible longer term wave counts because it doesn't help in trading. However I show this chart because I want to point out the increased possibility of a sharp market bounce. This doesn't mean that the stock couldn't fall even further. The 5th wave may continue much longer, but being in a 5th wave also means that it is a terminal wave too. The upward reaction to such a multiyear decline will give us the chance to take small risks relative to the potential gains.
Even in the daily chart of National Bank of Greece the downward sloping channel is getting narrower. A small sign of short term bottom was created yesterday. Closing above 1,31 and 1,45 will confirm the short term bottom.
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