Monday, 2 July 2012

Greek stocks expected to outperform

 Greek stocks are taking a break from the continuing decline and intense selling pressures. After the Greek elections and the european summit one can say that something interesting is brewing in greek stocks. Some positive signs of a price trend change are there, but are they strong enough to change longer term trend? The market is bouncing and is at least in an upward correction phase. Hard resistance levels are ahead and the market will surely test its powers.

 Taking a close look at the Athens General Index, one can see that this index is near the completion of a 5 wave impulsive move upwards. What follows is a 3 wave correction and another 5 wave move towards the direction of the first impulsive wave. Even if this upward move is corrective, it is not over yet. More upside potential is there.
Moving back and looking at the weekly chart we find resistance at the 700 price level. If broken upwards, the market could at least make an upward correction similar to the one back in 2009. The bullish scenario however takes for granded that the low is in at 471, and the trend has changed. However it is too early to support such a scenario as its chances are still very low. Breaking resistances like 700 and then the 850 price level would increase chances for a trend change.

Either way the market looks like it is going to be 'hot'  during the summer and many opportunities will arise in greek stocks with great potential to double or triple value is expected. Keeping a close eye and a closer stop order could prove very profitable since the market is still close to its lows.

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