Summary

It was a very smooth and merry week on the WSE. Nevertheless, it did not hinder the continuation of increases on the market. In spite of lower volumes the WIG20 index went up by 1.1%. Moreover, medium-sized companies ended the week in the green – the mWIG40 rose by 1.8% and the sWIG80 took off by 1.0%. It was the second consecutive week in which polish stock exchange did not move towards the south. It seemed that Santa Claus continued his rally. However, he will not be probably able to bring a monthly growth. It should be noted that there were not too many readings of economic data. Nevertheless, investors learnt the unemployment rate for November. Surprisingly, it stood at 9.6% vs. 9.7% expected. What is more, political situation, which was not as tense as in recent weeks, helped stock market to increase.

It was also a holiday mood on European and American markets. The most important global financial markets were opened for 4 days (in Poland only 3). As a result, there were lover volumes. Nevertheless, investors learnt some crucial economic data. There was a release of the US GDP growth which stood at 2.0% y/y vs. 1.9% expected. Moreover, data on American revenues and expenditures did not fail. There were also several publications of economic data in Europe. The GDP of France grew only by 0.3% y/y what confirmed that one of the biggest European economies is in an economic stagnation. Furthermore, there was a release of British GDP growth (the increase of 2.1% y/y). Lately, there was also a slight recovery last week in commodity prices, which actually are in crisis. As a result, British FTSE250 rose by 1.8%, German DAX took off by 1.1% and French CAC40 went up by 0.8%. Furthermore, Wall Street took a leaf from European stock markets. The S&P500 soared by 2.8%, the NASDAQ rose by 2.6% and the DJI grew by 2.5%.

Because of coming New Year the last week of December will be probably marked by lower volumes in the financial markets. What is more, the week will be scanty in economic data. Nevertheless, investors will focus on the readings of the Conference Board Consumer Confident Index and the Chicago PMI Index in the United States. In addition, the New Year’s Eve will bring the release of the industrial PMI for China (by the CFLP).

Technical Analysis

Graph 1. WIG20 daily. Source: Stooq

It was another very good week for the WIG20. The index of the largest companies broke a short-term downward trend coming to a very important level of 1,900 points. It is possible that the WIG20 will try to break the resistance that is extremely crucial from psychological point of view. This was also confirmed by a last candle – the cop. It meant that there was an hesitancy in the market. A breakthrough of resistance will be the signal for further increases towards the next important level of 2,000 points. Unfortunately, the RSI oscillator was in an upward trend and did not indicate any signals. Nevertheless, there is a possibility that Santa Claus will help and sustain increases.

Graph 2. Alior Bank daily. Source: Stooq

The tense political situation and numerous activities that weight heavily on banks caused significant declines of banks’ share prices. Nevertheless, it seemed that all these threats were discounted in prices. Moreover, there were some buy signals. These were indicated repeatedly by the RSI oscillator for Alior Bank. What is more, its share price stood at PLN 67. If there is a breakthrough of this level, it will be probably a signal of trend reversal. It should be also noted that many buy recommendations for Alior Bank appeared last weeks.

Authors: MM Prime TFI S.A. Investment Management Team

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