Sunday, January 11, 2015

Caixabank on the spanish stock market

This week has been s special week for Spanish market, Santander bank has announced a capital increase and at the same time has decided to reduce the dividends from 0,6 to 0,2 (it means from around 8% to 3%). So that, the stock value has been stopped at Thursday afternoon. The Spanish stock market has fallen around 6% in just one week, mainly because of Santander surprise.

Seems clear that in short term, the market will bounce a little bit, but if you are thinking to long terms maybe the best option is to wait a little bit more with better PER values and when market is upwards at least at monthly charts.

Actually I will check what we can do, following weeks, just before Draghi`s interview and the votes in Greece (which most probably Syriza will win).

Let`s go to analyze Caixabank (third biggest bank in Spain Market). What would have happen if we decided to buy/sell on MACD and signal crosses and accepting a 5% win/loss, always in daily charts (independently that long term charts as weekly and monthly advise not to open it). Nowadays, if I should decide between long or short position, I`m more willing to open short positions.

To open a trading position, we will consider the middle value of previous day candle. If previous day candle is 4,4 as minimum and 4,7 as maximum, our entry order should have been placed at 4,55 the next day. Our paper trading was supposing that we would like to be all time in the market.

In the 120 last sessions, there were 10 possible entries: 2 would have been null, 5 positive and 3 loss trades.

Let`s see loss trades:
AUG2014, betting SHORT
OCT2014, betting LONG
DEC2014, betting LONG

In August the monthly chart was still to high, seems that buyer had control, it was to risky to open a short position. Since May the signal is going down and is decreasing the difference between macd and signal, November and December was almost near zero values. So those months was also risky to open long position trades, at least on December which was almost zero.

So. The monthly chart is advising us that we should decide to take only short positions. But the next thing appearing is a long position when in daily chart the signal crosses the macd (however expected gain is not high cause main trend is down). So, the advise is not to open long and wait for the next down trend

Monday, September 15, 2014

SP500, Up trend and similarity with Ibex35 (spanish stock index)

Monthly graph that covers the last 12 years of the SP500 evolution. It has stable movements, no big volatility instead the 2008, when the subprime crack started.

So it is not a huge risk to invest when MACD histogram crosses upwards the zero horizontal line, those cases are remarked in the picture below with circles. In the 12 years, only were a red cross is in the picture our hypothesis will give us a bad trend.

Previous to 2008, the SP500 has been around 4 years, in a upward trend but always in a stable way. Right now, it is the same case and coincidence or not the tappering will start soon in USA.

To decided to a better investment entry, it will be necessary to see a more accurate graph, let`s see weekly graph. We are not going to deep until daily graph in this case. In the figure below I attached weekly graph that applies to the last 3 years of the SP500. As it is visual, there is no matter when to introduce long position because it does not have "huge" backs in the trend. The best way maybe to invest on it, could be when the index is nearby the 50 EMA (blue line) or deciding when the histogram cross from below to upside crossing the zero horizontal line.

And what happens to Ibex35, spanish index?. Ibex used to have a little bit more chaotical movements, not so stable as SP500. Using the same logic as SP500 our hypothesis would have given us three wrong entries, but it will work the rest of the time.

Now they the index is in a clear upwards trend, does not look like it will turn back. It would not be strange that american funds decide to invest in Europe expansion. Because, maybe it is the only solution of Draghi to stop the low inflation (August was the lowest inflation for Spain, -0,5%. It is the second month that the inflation is in negative in Spain)

Ibex35 Historical graph

After the meeting last thursday the stock market went to far up. We recommended to wait a littler bit until all this situation calms down. Nowadays, the Ibex35 is at 10888, not bad moment to open a long position. But take care that the following thursday will be also a chaotical day, with the scotland independence voting.

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Sunday, September 14, 2014

Buy a property in Spain. Is it time for it?

Let`s do the same analysis that we did in May regarding house pricing in Spain. Buy house in Spain or shall I wait (May14).

In May we said thatthe €/m2 price was going down, although the strend of the prices falling has been almost stopped.

Idealista house prices detailed following:

January 2014: 1726 €/m2
February 2014: 1726 €/m2
March 2014: 1709 €/m2
April 2014: 1698 €/m2
May 2014: 1694 €/m2
Jun 2014: 1684 €/m2
Jul 2014: 1676 €/m2
Aug 2014: 1669 €/m2

However fotocasa figures are:

January 2014: 1734 €/m2
February 2014: 1726 €/m2
March 2014: 1712 €/m2
April 2014: 1710 €/m2
May 2014: 1699 €/m2
Jun 2014: 1656 €/m2
Jul 2014: 1641 €/m2
Aug 2014: 1656 €/m2 (INCREASE)

So idealista prices has fallen down 3,3% from January until August. Meanwhile fotocasa prices falled down 4,49%. But the last month in fotocasa figures will turn on our alerts.

If both prices (idealista and fotocasa) start increasing prices at least during 4 consecutive months, we should say that it starts the moment of buying houses in Spain. Nowadays, the idea is to wait until those 4 consecutive months of increase appears in both pages.

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Saturday, July 26, 2014

Spanish Ibex35 Top10 shares per capitalization and best option to buy

Maybe not many people from outside Spain invest in Spanish stock. So with this blog I`ll try approaching little bit information to those people outside. I used to write in a Spanish blog mainly about spanish shares, I`ll do my best to translate the posts in order to have Spanish and English version although it`s more work for me.

Below I listed the EPS (Earning per share) of the top10 shares with highest capitalization from Ibex35 at 26-Jul-2014. Only taking into account those 10 shares (from 35 shares that are included in the Ibex35), it represents the 73% of whole index cap.

Capitaliz. Cap Acción/Cap IBEX PER ttm* 2014e. Bloomberg 2014e. Bankinter
SANTANDER 89773 15,77% 19,1 15,52 14,9
INDITEX 69470 12,20% 29,57 27,14 26,8
TELEFÓNICA 55750 9,79% 12,89 14,11 13,9
BBVA 55634 9,77% 30,12 17,63 16,7
IBERDROLA 35365 6,21% 15,07 15,79 15,3
REPSOL 25601 4,50% 25,55 13,69 13,6
CAIXABANK 25396 4,46% 59,3 26,84 24,4
GAS NATURAL 23131 4,06% 14,52 16,32 15,9
25,08 24,9
BANKIA 16700 2,93% 25,93 18,12 17,3
% Cap. of whole IBEX 72,98%

*ttm : Trailing 12 months

The two columns of estimates, in my opinion we should consider as an estimate and don´t take care too much on them. I`m more interested in the EPS *ttm of Bloomberg to start analysing afterwards technical situation of the best EPS shares.

If we compare banks (Santander, Bbva, Caixabank, Bankia), the best one is Santander with a EPS of 19,1. So if we are force to buy any bank, Santander seems to be the best option nowadays.

Checking into monthly graph, we could say that the best option is to maintain the shares (not buy) and take care of the actual difference between MACD and the signal, the difference should not reduce. If it starts reducing, it can be the first signal to decide selling our shares because a tendency change could happen.

If someone is considering on buying some shares on Ibex35 maybe he can find out actually better options than banks (seems they are overbought). There are several shares with lower EPS in the index.

The best option in relation to EPS is Telefonica, with a EPS of 12,89. If TEF presents better results than expected, it can have a good upward trend cause the price of TEF is not yet overbougt
. Telefonica will present results the 31-jul-2014, next week.
The best of TEF is also that MACD is on the way of crossing upwards the zero horizontal line. Apart from that the 50 moving average is at 12,58 and 200 session moving average is at 12,39 (in the monthly graphs of course).
As soon as the price crosses those limits of 50 and 200 moving average, the price can also take a good upwards trend.

Saturday, July 5, 2014

Buy house in Spain? Or shall I wait more

I will go straight to the crucial information. I will show you the information that I retrieve from idealista and fotocasa. Below you have information from idealista.

January 2014: 1726 €/m2
February 2014: 1726 €/m2
March 2014: 1709 €/m2
April 2014: 1698 €/m2
May 2014: 1694 €/m2

However fotocasa says:

January 2014: 1734 €/m2
February 2014: 1726 €/m2
March 2014: 1712 €/m2
April 2014: 1710 €/m2
May 2014: 1699 €/m2

As you can check, they are two different sources and the final conclusion is almost similar ("fotocasa" confirm that prices went down 2,1% in 5 month and "idealista" says that it has fall down 1,85%).

Now the question is?. Are the new house prices and second hand prices similarly decreasing? (The information shown at the top is prices for second hand houses). I check if they are related or not using the  report prepared by INE (Spanish National Stadistical Institute). In this report, we can verify the IPV (Housing Price Index) evolution, separated by new house prices and second hand prices

It is clear that it is better than one year ago. The last year the price was falling down at a range of 10%, annually. But for now on it is falling down, not in such big percentages (now only 1,6%).
But what it interesting from this report is that the IPV index for new houses (yellow line from image below) and second hand houses (red line) are similar. So the analysis done by "idealista" and "fotocasa" are confirmed and will be used to go on checking the price of houses

Idealista and Fotocasa figures are updated monthly, meanwhile INE is updated quarterly. So the plan could be as follows: when in both places "idealista+fotocasa" the house prices increases at least during 3 months, we could start thinking in obtaining a house, before that is a secure loss and it is not recommended to buy a house for investment.

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