FTSE MIB 40 – Monthly Candlestick Chart – Elliott Wave Forecast – May 18th, 2018

The picture shows FTSE MIB 40 long term trend depicted by a monthly candlestick chart with Elliott Wave Forecast for the next two years

InchCapital Platform – FTSE MIB 40 Monthly Candlestick Chart – Elliott Wave Forecast – Data Source Datalink – Update May 18th, 2018

 

The Italian political perspectives of a “change” Government have caused an increase in the country risk. The Italian stock market went down while the yield on Italian 10 yr government bonds increased. Let’s go see what the medium / long-term and short-term perspectives are for the FTSE MIB 40 index.

I analyzed the trend of the Italian stock market starting from the end of the bullish cycle recorded in May 2007 to date. In the last ten years, Italy, unlike all other developed countries, has not recorded new historical tops. The bullish phases were all blocked at levels lower than the last top of 24558.46 recorded on October 16, 2009.

The bullish swings occur when the other main equity indices are in correction, confirming that Italy has long been considered a marginal and secondary stock market, especially if the main equity indices are compared.

The main scenario highlighted in the chart above is worrying as we are close to closing the second primary corrective phase, i.e. wave (X) pending to detect a last corrective phase destined to last years in a bearish direction that is wave (Y). This is not the only possible count. There are secondary alternatives in which we can count on a bullish trend for the next two years; however, we prefer to follow this scenario until the market shows any break out over 24558.46.

 

FTSE MIB 40 – Elliott Wave Forecast – Daily closing 23449.65 – Update May 18, 2018

The picture shows the short term perspectives concerning FTSE MIB 40 depicted by a daily candlestick chart and Elliott Wave Forecast

InchCapital Platform – FTSE MIB 40 – Daily Candlestick Chart – Elliott Wave Forecast – Data Source Datalink – Update May 18, 2018.

 

For the principle of fractalization we move from the monthly series to the daily ones. In the latter, it should be noted that the recent downturn could still be recovered as long as there is a bullish reaction already starting next week. In this case, it will close corrective wave (4) to detect the last bullish wave (5). Failing that, I will most likely be forced to change the count based on a potential bearish impulsive structure that is not yet present now.

 

FTSE MIB 40 – Pattern Prediction for the next 20 trading days – Updated for May 18th, 2018

The picture shows the FTSE MIB 40 Pattern predictions for the next trading days, elaborated by quantitative approach.

InchCapital Platform – FTSE MIB 40 – Pattern Prediction for the next 20 trading days – Update May 18, 2018.

 

The pattern predictions for the next twenty trading days are not comforting as regards the realization of the short-term scenario mentioned above. Only the first proposes a bullish impulsive structure with a maximum of 20 trading days equal to + 6.2% compared to the closing on Friday 18 May.

 

FTSE MIB 40 – Weekly bar chart – Updated for May 18th, 2018

The picture shows the FTSE MIB 40 medium/long term depicted by weekly bar chart

InchCapital Platform – FTSE MIB 40 – Weekly bar chart – Data Source Datalink – Update May 18th, 2018

 

The weekly position is still bullish with a 23181.78 touch stop that can be adjusted during the week. The support of 21460.46 is reconfirmed as the most important reference point for medium / long-term perspectives. Read more InchCapital Platform – FTSE MIB 40

The non-comforting perspectives of the main index FTSE MIB 40 change radically if instead we analyze the trend of the ALL STAR index (Wikipedia.org/wiki/FTSE_Italia_STAR) that refers to the Italian companies of medium capitalization and closer to the Tech sector most appreciated for their dynamism and ability to react to unfavorable economic phases.

 

The picture shows the bullish trend of the FTSE ALL STAR index depicted by a weekly line chart of the last 8 yr.

InchCapital Platform – FTSE ALL STAR – Weekly line chart last 8 yr – Data Source Fida

 

This index has a similar trend to that of the other main international stock indices, where it is considered that it has already recorded new historical highs and has surpassed the resistance of 2009 already for five years.

 

FTSE ALL STAR – Daily closing 37416 – Weekly bar chart – Update May 18, 2018.

InchCapital Platform - FTSE ALL STAR - Weekly bar chart - Data Source Fida

InchCapital Platform – FTSE ALL STAR – Weekly bar chart – Data Source Fida

 

The weekly position is neutral. The support of 35458.69 is reconfirmed as the most important reference point for medium / long-term perspectives. Read more InchCapital Platform – FTSE ALL STAR

 

World Equity Map – Italy vs. Europe and vs. World – Update May 18, 2018

InchCapital Platform – Equity Map – Italy vs. Europe and vs. World – Equity Map – May 18th, 2018

 

In according to the ARC method (absolute, relative and comparative), we can see how the comparison between Italy and the other European and world equity markets, performed for trend / momentum DSS on daily time series, shows a substantial weakness that is shared in Europe together with Poland and Luxembourg.

 

Conclusions:

The trend of the last ten years has highlighted an Italy split in two. Export and technology oriented companies are preferred by investors. The securities of the banking and energy sectors have a heavy weight in the capitalization of the FTSE MIB 40 index (www.borsaitaliana.it/borsaitaliana/statistiche) and prevent Italy from having a blue chip index in line with what is highlighted by the other main European countries and the world. The perspectives for the FTSE MIB 40 index are not currently favorable. To change your mind it is essential that the index settle permanently above 24558.46 with a suitable bullish structure.