Stock of the day: Intesa Sanpaolo

On this last day of the week and first day of a new month we’ll be analysing Intesa Sanpaolo, the Italian Bank we’d previously analysed in mid-July. I have to say that our previous analysis was very accurate. Check out how we concluded the previous piece:

“Currently, the closest support is on the 2.21 EUR (yellow) and in my opinion, we should get there relatively soon. What will happen next depends on the price action there. The breakout will give us another sell signal and the bounce will give buyers hope and an occasion for a bullish correction.”

The price declined, tested the mentioned support, and then went higher. The uptrend lasted until the middle of February when the ISP put a foot above the 2,9 EUR. That was it though, since then, the price has pretty much collapsed.

The reason why we’re mentioning ISP today is that we can see a very classic bullish correction coming to an end. The correction is a wedge (red) and just recently, met three important resistances. The first one was the upper line of the wedge; the second one was the 38,2% Fibonacci and the third one was the 2.14 resistance (blue). We are below all of them, which shows a bearish dominance.

A sell signal on ISP will be triggered when the price breaks the lower line of the wedge. We are not there yet but chances for that are really significant.