After 8 consecutive sessions to the downside, today the Milan Stock Exchange has opened higher. It seemed like the session of the rescue, but at some point something happened that changed the scenario. And all operators have understood that they are in the presence of a fake rebound. That’s why it is better not to trust the dead cat’s rebound on the stock exchange.
It looked like the session of the rescue
After 8 sessions down, today seemed the right day for the recovery of Piazza Affari. In fact, the Milanese list opened up together with the European stock exchanges. A rise that during the morning became very substantial, up to a gain of almost 1.5%. Among the securities in recovery there were mainly bankers, and this is not an insignificant detail, which we will analyze later.
Index prices Ftse Mib (INDEX-FTSEMIB), stood for the second part of the morning, and until 15:00, in the area 19.400 / 19.500 points. However, when the first signs of Wall Street’s negative opening began to arrive, prices began to fall. At 15:30, when the American stock exchange opened below par, the index began to lose ground, until it reached negative territory. At the end of the session, the blue chip index closed down 0.3%.
Because on the stock exchange it is better not to trust the rebound of the dead cat
Why did prices first rebound and then go downhill? Because today was the classic rebound of the dead cat. In the first part of the day, the best-selling securities in the previous sessions were all purchased. Useful operation to go to cover the downward positions that had previously been opened precisely on these shares. When the recoating operation ended, the purchases ended and sales started again. The opportunity was given by the downward opening of Wall Street.
It is no coincidence that among the stocks that made the most money in the morning were the bankers, among the best-selling stocks in the previous days. And it is no coincidence that the Ftse Mib index stopped the rebound in the area of 19,500 points. Prices throughout the morning attempted to break through this resistance without success. This price level is important. In fact in a previous article (you can read it who), the Exchange Projection Studies Office had indicated a closure above this level as the determining factor. If the Ftse Mib had closed above 19.500, next week there would have been the possibility for a positive short-term change of trend. But the index closed at 19.166 points.
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