Anticipating a Country Rotation

Last week I wrote about my two best Equity Index ideas.

Buy the U.K.’s FTSE 100 and Spain’s IBEX 35.

I wanted to attach some better charts showing the monumental extremes of an index being oversold, not on a daily or weekly terms, but on a Monthly basis.

Because we’re looking at them on a Monthly view, we’re not about to trade out this position next month.

When you’re a buyer of securities at such extremes, you’ve got to give yourself 10% of price movement. After all, in the case of the IBEX, I’m looking for a 45% rise over the next 2-3 years as the index means revert towards its 200 day moving average, which is currently 10,000.

October 7, 2020
by Rob Zdravevski
rob@karriasset.com.au

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