Swedebank Series A shares forms part of a series of charts outlining Swedish stocks related to the current residential correction in Sweden.
Following a major run established at the beginning of 2009 and aided by the Swedish governments quantitive easing program Swedebank shares has completed a potential 5 wave sequence and is currently correcting. The correction has continued down through a series of bearish rallies and has broke through a positive median line set and is now being rejected by the 200ma.
Previous rallies have occurred when RSI levels have gone under the 30 mark as such it is possible that the correction will continue over the next year with a potential relief rally forming in 2019. RSI has shown Bearish divergence since a high in 2013, confirming a potential trend reversal in 2015 and in 2017. The high in 2017 and following correction is established through multiple share prices related to the construction sector.
This relief rally may only be one of a series of corrections and it is important to keep an eye on Riksbank policy over the coming year where interest rates will be changed from -0.05 to positive levels. If the quantitative easing program is reduced by Riksbank this will increase mortgage repayment levels and rise borrowing costs. The effects of this are to be watched as Sweden currently has a household debt to GDP ration of 180% and the Swedebank will be put under pressure to ensure repayments are made in order to service debt built up during the boom cycle.
If price continue to decline it is possible that a death cross will be formed for the first time since 2008 and share prices should be watched closely alongside the housing market.
Two price markers are set out one related to the current bear flag that has started to break down and the second one related to major support at trend based and complete fib levels.
Importantly it should also be noted that the rally formed after 2008 failed to eclipse the previous high set in 2007 and while marginal this constitutes a lower high and a sign of a potential downtrend.
Following a major run established at the beginning of 2009 and aided by the Swedish governments quantitive easing program Swedebank shares has completed a potential 5 wave sequence and is currently correcting. The correction has continued down through a series of bearish rallies and has broke through a positive median line set and is now being rejected by the 200ma.
Previous rallies have occurred when RSI levels have gone under the 30 mark as such it is possible that the correction will continue over the next year with a potential relief rally forming in 2019. RSI has shown Bearish divergence since a high in 2013, confirming a potential trend reversal in 2015 and in 2017. The high in 2017 and following correction is established through multiple share prices related to the construction sector.
This relief rally may only be one of a series of corrections and it is important to keep an eye on Riksbank policy over the coming year where interest rates will be changed from -0.05 to positive levels. If the quantitative easing program is reduced by Riksbank this will increase mortgage repayment levels and rise borrowing costs. The effects of this are to be watched as Sweden currently has a household debt to GDP ration of 180% and the Swedebank will be put under pressure to ensure repayments are made in order to service debt built up during the boom cycle.
If price continue to decline it is possible that a death cross will be formed for the first time since 2008 and share prices should be watched closely alongside the housing market.
Two price markers are set out one related to the current bear flag that has started to break down and the second one related to major support at trend based and complete fib levels.
Importantly it should also be noted that the rally formed after 2008 failed to eclipse the previous high set in 2007 and while marginal this constitutes a lower high and a sign of a potential downtrend.
Trade active:
Target reached - larger distribution top in play - further updates to follow