In a week, a different world appears on the markets but the embryo for this new creature already existed. There are now new challenges to face, which we will see together in this article and face together.
By Fabio Pioli, professional trader, creator of Miraclapp, the largest extra income platform
Just a week after our last article (“FTSEMib: the magic line”) we seem to find ourselves in a completely different reality.
Not only are the prices of the Italian FTSEMib index 2,000 points below, equal to a loss of -6% in a week, but above all the small saver seems to have awakened in another world, almost a dystopian world compared to the one he was used to, a world in which downside also exists, not just up.
But we can ask ourselves: “did this reality really not exist before?”, “couldn’t what happened really be predicted?”. The reason why for a few weeks it was said: “you shouldn’t buy but rather you should monitor the supports not only to unload the securities in the portfolio but also to go short” was precisely linked to what then happened: the market was in a zone of objectives and, sooner or later, it was inevitable that he would “unload”.
With what was written previously we therefore wanted to prevent the reader from making the biggest mistake he could make (buying) and instead make him seize the opportunity that was gathering like a cloud on the horizon, i.e. unloading the securities in the portfolio or, even , open bearish positions. And some may wonder whether Miraclapp seized this opportunity.
The answer is yes.
Not so much on the Italian index, for which there was no signal but on 2 stocks; one is called A2Afor that the gain was +1.60% and the other is called BPM BANK for which the gain (not yet monetized) is currently +9.08%.
This arose from the media monitoring strategy.
However, there is more: now that the market has reversed, many more opportunities are opening up. And together with these we will see at the foot of the article what the risks will be, which are of a completely different nature compared to the previous “don’t buy”.
But let’s proceed in order: within a week the market moved up, breaking the short-term “magic line” (support) (Figure 1 from last week).
Fig 1. Future FTSEMib – Weekly chart
on medium-term supports (Figure 2).
Fig 2. Future FTSEMib – Weekly chart
So from here, it finally CAN bounce. Therefore, if previously the golden rule was “don’t buy”, now the strategy changes completely and includes the possibility of buying.
What stocks and situations will we monitor at this juncture? A2A, SOUL HOLDING, GENERALI BANK, BPER BANK; BREMBO, BUZZI UNICEM, ENI; the ITALIAN FTSE MIB INDEX, ITALGAS, ITALIAN POST, PRYSMIAN, for example. All for any longs.
But, be careful, for the small saver, the fact that the market has fallen and that bullish opportunities finally exist entails a new and very important danger.
Remember when at the beginning of 2024 and repeatedly during the following weeks and articles we wrote that the big risk of 2024 will be buying too early?
Well we were referring to what already happens in this phase: the fact that the market has fallen and from here CAN rise does not mean that it will rise and, if you buy without having a signal (i.e. without the market being ready) you could buy not only years in advance but also at prices that could potentially never be seen again. Never again.
We are in the most dangerous phase in the world because we are in a situation in which if you do not know how to recognize that you are wrong, you risk offering the big bank the possibility of unloading the securities it has in its portfolio at very high prices in exchange for your money. This, and probably others that will occur during the year, becomes the most delicate phase for many years now and must be managed well.
