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
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