European Banking Stocks See Bullish Recovery After Turbulent Session
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European Banking Stocks See Bullish Recovery After Turbulent Session

European Banking Stocks See Bullish Recovery After Turbulent Session


To say stock markets have been turbulent would be an understatement.

One minute they are up, looking like they’ll post a decent gain, the next they are down nursing heavy losses, before reversing the reversal and giving investors an absolute headache.

If there’s anything good that can be taken away from yesterday’s session it is that many European banking stocks, which had earlier in the day been nursing very heavy losses, made a very impressive recovery. In fact, several formed bullish “hammer” candlesticks on their daily charts.

The bulk of the recovery moves were in the latter part of the session and so there are lots of technical analysis chartists who will pick up on this citing a possible reversal in the trend of their share prices.

But having learnt from history, in particular the last few months, there have been numerous occasions when these banking stocks gave out what looked to be reversal or buy signals. At some of these points the stock prices recovered for a few days before taking the next big step downwards.

Unless we see a more prolonged end to the selling it is still early days to call the bottom for these banks. Any brave bulls going long at these levels might want to keep a close stop loss order in place and possibly a guaranteed stop loss if they can.

European politicians came out fighting yesterday and vehemently defended the whole European project, reiterating to the financial spread betting markets that their resolve is sturdy.

The only problem is that investors are still struggling to believe them without the required resolution put in place to once and for all draw a line under the situation.

We had G7 meeting after G8 meeting after G20 meeting, none of which have come to a common agreement on how to deal with the European sovereign debt crisis and time is running out. Soon it’ll be too late and we really will be going down the route of defaults by sovereign countries.

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'European Banking Stocks See Bullish Recovery After Turbulent Session' by DB, updated 14-Sep-11

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