Europe has within reach the resistance that would allow it to assault the roof of the ‘dotcom bubble’

With just three weeks left until the end of the year and with hopes that the Christmas Rally will serve to round the year, the European bulls are already beginning to think about the next resistances to beat, which are located stone’s throw. The temporary ceiling that the EuroStoxx 50 found in April 2024 when reaching 5,120 pointsis now less than 3% away from this Monday’s closing levels.

And the best news is that the continental selective arrives, technically in favorable conditions to overcome this obstacle. “After such a prolonged consolidation, the accumulated overbought has been completely eliminated, leaving the main European index in an optimal position to resume the upward trend of recent years,” explains Joan Cabrero, technical analyst and strategist at ecotrader.

In this context, it should be noted that the European stock market’s continued upward trajectory depends on exceeding this level. “The medium-term objective of the EuroStoxx 50 is at the historical highs of the technological bubble of the year 2000, around 5,500 points“, details the expert, who recalls that if this hypothesis is confirmed, there would still be an additional margin of increase close to 10%.

An objective that could be even more ambitious if one takes into account that from a technical point of view, it is common for a new bullish impulse to cover at least the width of the previous lateral range, “which could take the index towards 5,800 points, representing an upward trend of up to 15% from current levels,” highlights Cabrero.

Sign of strength in the Spanish stock market

For its part, in Spain, the most notable thing in recent sessions has been seeing how the Ibex 35 has managed to set a new growing maximum within its upward trend, after managing to beat the psychological resistance of the 12,000 integers. “This new high of the year led the Ibex with Dividends to establish a new all-time high and enter absolute free risewhich is the most bullish technical situation that exists, which takes shape when a price curve is trading where it has never done before,” highlights Cabrero.

In the short term, exceeding the 12,000/12,037 points This is another clear sign of strength that opens the door to the Ibex 35 to increases until at least the growing resistance that arises from joining the different ascending relative highs since January 2023, which currently runs through the 12,400-12,500 points. Beating that growing resistance would be a sign of enormous strength and the icing on the bullish cake in 2024.

“There will be no sign of bullish deterioration that puts in check the possibility of seeing a continuity of the current Christmas Rally while a eventual fall does not lead the Ibex 35 to pierce the support of 11,580 pointswhich are last week’s lows, which are relevant from a technical point of view since they allowed the Ibex 35 to overcome resistance,” reports the strategist of ecotrader.

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