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These are the strong values ​​of the Ibex despite the ‘sell in may’

These are the strong values ​​of the Ibex despite the ‘sell in may’

The ‘sell in may and go away’ is not being fulfilled in all the Ibex 35 values. This saying, which translated into Spanish means sell in May and go away, invites the investor to sell their shares in May and stop their stock investment until October at least due to the little activity that the market registers during the summer months.

The ‘sell in may and go away’ is one of the best known principles of the stock market and has its origins in the 1930s, at the time when brokers in the city of London put aside their stock market operations to move to the outskirts and attend events such as the Wimbledon tennis tournament or the horse race in Ascot. Because of this, they were unable to monitor and control their titles and were forced to sell.

In fact, the original name of this aphorism was’sell in may and go away, and come on back on St. Leger’s Day ‘, referring to the St. Leger’s Stakes horse race, which takes place in mid-September and is part of the British Triple Crown. Over time, the American stock market has appropriated the expression to designate the period that runs from May, called ‘Memorial day’ until the month of September where ‘Labor day’ is located.

However, this thesis is not infallible. And it seems that the trend is changing in recent years. Almirall Sabadell, Bankinter, CIE Automotive and Fluidra reject the ‘sell in may’ by positioning themselves as the most bullish entities on the Ibex 35 according to the technical indicators developed by the Investment Strategies analysis department. These indices, which determine the phase of the cycle in which the entity is, take into account the trend, the total fast and slow moment, the volume and the amplitude range of the action.

In the first place, Almirall is the most bullish indicator on the Spanish stock market by obtaining the maximum score, that is, ten points out of ten possible. Therefore, all its variables reflect an upward trend in terms of the trend, positive, in the case of the moment of the action, increasing in terms of volume and decreasing in terms of the amplitude range. Almirall is the company that most questions the ‘sell in may’ principle.

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The rest of the securities that obtain a technical outstanding in their indicators are Bankinter, Sabadell, CIE Automotive and Fluidra, all with nine points out of ten possible. The four Ibex entities present the same technical diagnosis. The trend of the stock is bullish both in the medium and long term while the fast and slow total moment presents positive results. With regard to the volume of the securities, all of them show growing dynamics in the medium and long term. Finally, volatility is the negative point of the analysis since it indicates increasing evolutions in both periods.

Other stocks that exceed the notable technical high are Acerinox, ArcelorMittal, Caixabank and Indra. The steel company has a long and medium-term uptrend along with positive fast and slow overall momentum. Its volume is mixed, decreasing in the long term and increasing in the medium term, while the amplitude range registers the same result. ArcelorMittal, Caixabank and Indra obtain the same analysis results as Acerinox in all variables with volume and long-term volatility as weak points.

Then, Is the ‘sell in may’ fulfilled? If we look at the monthly evolution of the Ibex 35 for the last decade, we see that the Spanish stock market has only had declines during the three consecutive summer months in 2011, that is, from that year on it has always been interspersed between rises and descents during the summer period. In addition, the year 2016 stands out, in which increases are reflected during the months of July, August and September, so that during that year the ‘sell in may’ was not fulfilled.

January

February

March

April

May

June

July

August

September

October

November

December

2011

-1.1%

-7.0%

-9.5%

-2.0%

+ 4.8%

-5.6%

+ 1.4%

2012

-0.7%

-0.5%

-5.4%

-12.5%

-13.1%

+ 16.6%

-5.1%

+ 10.1%

+ 3.9%

+ 1.7%

+ 1.2%

+ 2.9%

2013

+ 2.4%

-1.6%

-3.8%

+ 6.3%

-1.2%

-6.7%

+ 8.6%

-1.7%

+ 10.8%

+ 7.9%

-0.7%

+ 0.8%

2014

+ 0.0%

+ 2.0%

+ 2.2%

+ 1.1%

+ 3.2%

+ 1.2%

-2.0%

+ 0.2%

+ 0.9%

-3.2%

+ 2.8%

-4.6%

2015

+ 1.2%

+ 7.4%

+ 3.1%

-1.2%

-1.5%

-4.0%

+ 3.8%

-8.2%

-6.8%

+ 8.4%

+ 0.3%

-8.1%

2016

-7.6%

-4.0%

+ 3.1%

+ 3.5%

+ 0.1%

-9.6%

+ 5.2%

+ 1.5%

+ 0.7%

+ 4.1%

-5.0%

+ 7.6%

2017

-0.4%

+ 2.6%

+ 9.5%

+ 2.4%

+ 1.5%

-4.0%

+ 0.6%

-1.9%

+ 0.8%

+ 1.4%

-3.0%

-1.6%

2018

+ 4.1%

-5.8%

-2.4%

+ 4.0%

-5.2%

+ 1.7%

+ 2.6%

-4.8%

-0.1%

-5.3%

+ 2.1%

-5.9%

2019

+ 6.1%

+ 2.4%

-0.4%

+ 3.6%

-5.9%

+ 2.2%

-2.5%

-1.8%

+ 4.9%

+ 0.1%

+ 1.0%

+ 2.1%

2020

-1.9%

-6.9%

-22.2%

+ 2.0%

+ 2.5%

+ 1.9%

-4.9%

+ 1.3%

-3.6%

-3.9%

+ 25.2%

-0.0%

2021

-3.9%

+ 6.0%

+ 4.3%

+ 2.7%

+ 4.1%

However, it is also worth mentioning the year 2015 in which, despite registering an increase of 3.8% in July, it fell dramatically in the following two months with -8.2% and -6.8%. Ultimately, what this evolution shows is that, regardless of the specific stock market situation of each year, the trend of ‘sell in may’ by investors has changed in recent years.

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