The Oldest Country in Europe is Breaking Out
Did you know that Portugal has had the same defined borders since 1139, making it the oldest nation-state in Europe? I didn’t either and knowing that fact is probably not going to make you money but the Portugal stock market just might if you play the chart right. After more than 3 years and an almost 50% decline in its stock market it looks as if Portugal is setting an attempt to reverse course.
The chart is a technicians dream as it has set up perfectly for a move higher.
- Multiple periods of positive momentum divergence have formed, the latest at its lowest price
- Price is currently above the 200 day moving average which has flattened and just begun to have a positive slope.
- Price has formed 2-higher highs and 1- higher low.
- Price broke above important resistance (blue horizontal line) with conviction (big candle)
- The breakout in 4 above was confirmed on more than 5x volume as seen in the lower pane (normally look for 30-50% increased volume as confirmation)
- Price is breaking out of a consolidation base of 6 months or more (period under blue horizontal)
You might be wondering as attractive as this set up is why I won’t be adding it to client portfolios. Unfortunately even if we were to only take a small position (say 2%) in each client portfolio that purchase would constitute more than 50% of daily market volume, making our clients “the” market. An amount more than 5% violates our investing rules so anyone reading who is managing their own money, consider this a freebie idea. I hope you make a ton!