The actions of Santander Bank They have been trapped for weeks in a lateral range that shows the market’s doubts regarding the prospects of the Cantabrian entity.
The same division that the analysts showed with their results was transferred to the trading floor, where supply and demand were balanced to leave the value in a kind of stock market stalemate. It is the complete opposite of BBVA, the great rival that accelerated to annual highs.
The two entities present the best earnings per share in banking on the IBEX 35, as explained by Finanzas.com. However, the reaction on the stock market has been completely opposite.
Recovering the 3.45 euros is critical for Banco Santander
While BBVA recovered the levels prior to the pandemic in June, thanks to the return of the dividend and the repurchase of shares, Banco Santander has not yet been able to reach the 3.7 euros at which it was listed in March last year.
These pre-coronavirus levels are 15 percent away, but first some intermediate resistance will have to be broken down for the comeback to gain momentum and land on the market.
“Banco Santander is in a lateral range and has the shortest resistance at 3.35 euros, but really the area that it has to overcome in order to continue advancing is at 3.45 euros,” he said. Josep Codina, head of investment analysis and finance.com.
From here, Banco Santander would already have the clearest path to seek pre-pandemic levels. In fact, those 3.7 euros would be the first resistance, as a preliminary step up to the psychological level of 4 euros, Codina added.
The danger zone to avoid
The lateral range can also be broken below, and in this case, the danger zone is much closer.
“The support zone is 3.15 euros and the most adjusted between 3.20 and 3.15 euros,” said Codina. If it loses this level, the price is at risk, because in fact it finds the next support at 3 euros, the psychological barrier of round numbers.
There would still be a small drop filter to 2.85 euros, the last hold of Banco Santander.
Losing this level “would certainly complicate the situation because the price would be drawing a larger return pattern”.
It is not the scenario in which Banco Santander is now, but what would be appreciated would be a kind of shoulder-head-shoulder figure, which could have corrective consequences over the medium term, Codina explained.
The IBEX 35 will have to accompany
Beyond the key levels of resistance, for Banco Santander’s comeback to gain height, it will also need to accompany the IBEX 35.
The selective has been battling 9,000 points for weeks, and although he has conquered them, he needs to exceed the annual maximums of 9,250 points to validate the rebound.
The Christmas rally can be an ally, even for the IBEX 35 to reach 10,000 points before the end of the year, explained the sources consulted.
The sector must discount the good news
In addition, the banking sector must discount the good news that has brought the results and that for the most part have not yet been reflected in the stock market.
The truth is that financial institutions continued to surprise on the upside. 84 percent beat estimates for gross income in the third quarter, while 96 percent did better in profits, according to Bloomberg data.
The sector posted lower-than-expected loan loss provisions, which was seen in net profit.
In this way, the financial entities of the index Stoxx 600 from banks Provisions will be recorded this year of 31.2 billion euros, as explained to finance.com in Bloomberg Intelligence. This figure is half of the 69 billion estimated in January.