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O Ibovespa will continue to jump on one foot from the edge of the abyss this week that begins. Fear that partisan with Israel against Hamas escalates into a regional conflict, dragging out Art Will and USAand opportunity Federal Reserve System resume the rise American interest will remain at the table.
These are the same factors that drove the underlying index Brazilian stock market accumulating a loss of 2.24% last week, ending Friday (20) at 113,155 points. The problem is that at this Ibovespa level it is twice as difficult to gain traction and enter a stable high cyclethan acceleration curfew rhythm.
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This is what technical analysts do Genius, Ihar Graminkhaniis correct Empiricus Investimentos, Filipe Fradinho. Both place the following support Ibovespa in the area of 111,600 points. U graphical analysisa support is a point on a curve where the downward movement may stop and, who knows, rise again.
Ibovespa: Between a strong fall and a small increase
To break this low, the Ibovespa needs to fall 1.37% from Friday’s close. It is not impossible: the index has already shown daily drops more than doubled this month. On October 3, it fell by 1.42%; On the 18th, it fell by 1.60%. On two other occasions, the 2nd and 13th, the drop was close to -1.29% and -1.11% respectively.
| Cash register | Closing | 1st support | % left | 2nd support | % left |
|---|---|---|---|---|---|
| Genius | 113,155 | 111,600 | -1.37 | 108,190 | -4.39 |
| Empiric | 113,155 | 111,600 | -1.37 | 108,300 | -4.29 |
| Average | 113,155 | 111,600 | -1.37 | 108,245 | -4.34 |
Thus, of the eight sessions during which the Ibovespa fell this month, half showed a fall greater than or close to the estimate to overcome the minimum level of 111,600 points. If this happens, the drop will extend to the 108k area, which is more than 4% below Friday’s close.
| Cash register | Closing | 1st resistance | % high | 2nd resistance | % high |
|---|---|---|---|---|---|
| Genius | 113,155 | 117,100 | 3.49 | 117,900 | 4.19 |
| Empiric | 113,155 | 115,000 | 1.63 | 117,000 | 3.40 |
| Average | 113,155 | 116,050 | 2.56 | 117,450 | 3.80 |
You can’t even say that at the current level landmark the Brazilian stock market has an equal chance of falling or rising. The first resistance it is on average at a distance of 2.56% from the increase, in the area of 116,050 points. U technical analysisresistance is a point that, if broken, can unlock new highs or – in the worst case – if followed, can reverse the trend of the curve to a new low.
Even if it breaks this ceiling and continues to rise, the upside potential to the second resistance, in the area of 117,450 points, is 3.80% from Friday’s close. In plain English: The Ibovespa is starting the week closer to a sharp drop than a modest gain.
It’s not just technical analysts who are signaling that downside is more likely than upside. Investors are increasingly betting on this trend. According to Banco Safra, short positions on the stock exchange rose 0.58% to 119.8 billion reais over the past week.
