This article is written exclusively for Investing.com
European stock indices continue to make good progress, mainly thanks to the ongoing stimulus from the ECB and a recovering global economy boosting demand for European goods and services. But with travel and tourism demand not as strong as hoped earlier this year – due to the Delta variant of COVID-19 – not all EU indices are reaching record or multi-year highs. Spain's, for example, fell sharply in June and July, when Delta cases increased rapidly. However, the IBEX started August on a positive note and could therefore catch up with the rest of Europe and rise more strongly in the future. , although the German index has remained near its record highs for the better part of three months in consolidation mode. As a result, some of the other EU indices have caught up with both the French and Italian indices rising noticeably higher since mid-July. Large cap European stocks (including the UK) have outperformed. This has led the European to hit repeated all-time highs:
In contrast, the IBEX has underperformed as it remains well below its 2020 high (unlike almost all other major EU indices) :
However, it looks like the Spanish index has ended its bearish run and is about to break higher after forming that bullish piercing weekly candle a few weeks ago.
Meanwhile, the daily chart shows the index remains firmly below resistance around the 8830 area after rebounding strongly from its rising 200-day moving average in July:
The bullish-looking close of Thursday sure looks strong.
From here on I would be looking for a clear break above the resistance of 8830, which is needed for the bullseye, the Fibonacci retracement levels shown on the chart, prior to the June peak at 9318 thereafter .
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However, if the resistance persists and the index falls back below the recent support zone around 8700, this would be a short-term bearish development, in which case the bulls should wait for new signals before potentially intervening.
Taken together, the positive macro background (ECB support) and technical outlook both point to rising levels for the Spanish IBEX.
