Saturday, June 25

Inditex: good supports to buy

Inditex suffers a spike in volatility and a correction to record highs after publishing the change in the group’s presidency and the departure of Pablo Isla. The movement fits within what we could call short-term noisewellthe bullish fund structure continues. The price respects the upward guideline that starts from the lows of last year and the technical indicators of the premium zone that are programmed to follow and detect an uptrend give the stock a total passing score (a total score of 6.0 points out of a maximum of 10 available points).

The change in the leadership is continuous, it is well considered and, therefore, it does not imply a breakdown of the business model. The product and the customer continue to be the key. The digitization and integration of the points of sale (online and physical) together with sustainability continue to form the pillars of the strategy. A large cash position and stable growth with broad geographic diversification give the company a safe haven profile and its shares are listed at a large discount compared to peers, for which reason it receives a positive evaluation by fundamentals (see “Inditex: Isla’s legacy is impeccable, the market awaits the new route plan”).

Inditex on daily chart with amplitude range in percentage, MACD oscillator and trading volume

Inditex graphic analysis as of December 18, 2021

An analysis of the graph allows us to establish the price references to propose a trend operation. In the green colored zone, close to the intermediate support located at 26.99, limit buy orders can accumulate and we can position ourselves with long or buyer positions. The objective is to follow the upward trend in the background that we identify a fuchsia guideline and that helps us to establish the starting stop (below 25.14). A trailing stop to accompany the uptrend and that we could move up if the price confirms an upward turn by breaking the lower resistance located at 29.07. Higher up, the key resistance is found in the zone of all-time highs between 32.48 and 33.00.

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