Equities not to buy: Emak

When stock markets tend to rise, the common mistake of losing traders is to go and look for stocks that are negative and, if at all, fall in the last period.

The belief is that if the markets go up, buying securities in the red means earning more by exploiting bullish movements that could be pectore.

Never strategy was more wrong and bearer of heavy losses!

When the markets have an uptrend, there are stocks that cannot be bought and when they have a bearish tendency there are stocks that cannot be sold.

Emak: underestimated in a bearish trend

Today we are going to study the Emak (EM) case.

The stock closed the trading week at 0.868 and since the beginning of the year it has registered the minimum at 0.799 and the maximum at 1.387.

The latest recommendations of Akros bank analysts estimate a fair value of 1 euro per share. The previous ones had a fair value estimated between 1.30 and 1.50.

At current levels, therefore, Emak would be undervalued by around 15%.

Is it time to focus on the title?

Let's take a step backwards.

In 2017 quotations went from 0.837 to 1.985 and from this level began a descent to the present day. When will a trend reversal be witnessed?

The trading levels to be monitored are as follows:

The descent could undergo a brief reversal only with a weekly and then monthly closure of more than 0.996 and until this pattern is formed further downs are possible towards the area 0.799 and then 0.718.

At the moment, based on these graphical elements, Emak is considered one of the stocks not to be bought and therefore our investment decision is to monitor the stock pending developments.

When are long-term purchases advised?

Only with weekly and then monthly closures above 1.04. In this case the objectives would become really interesting with possible increases towards the area 1,387 and then 1,587.