Athens Stock Exchange General Index Resuming Downtrend?

Have you invested in Greek stock market in the turmoil of the economic crisis? For those lucky investors who were risky enough to buy Greek stocks in June at the multi-year lows, investing in the Greek economy was obviously a profitable move.

The General Index of the Athens stock exchange has almost doubled its value in a matter of 4 months, although it now approaches dangerously a key resistance level coinciding with this year’s high. Will the 4-year downtrend resume its downfall or would this ignite a minor pullback in one of the most spectacular trend reversals in financial history?

People kept talking about investing in Greek stock market, as popular Greek stocks could be picked up for nickels. Surely when everyone is selling, the biggest reward in stock trading would come up for those who bet against the trend and buy stocks at ridiculously cheap prices. Yet, buyers will still need a trend reversal; otherwise they will be left holding the bag.

Perhaps the following index graph will help you understand the powerful downtrend that Athens stock exchange has been experiencing since the crisis made its way into Greece. Respect to buyers who put their money where their mouth is!

Usually a resistance level during an uptrend is used to trade out at least half of the position if not all of it. Additionally, traders might pick this key level to short-sell Greek stocks and set a tight stop loss a couple of points above the entry bar. Yet, short selling isn’t possible in Athens stock exchange unless you are trading in ADEX, the Athens Derivative Exchange. However there are other possible ways to trade Greek stock market, like the GREK ETF.

GREK ETF daily chart shows almost the same trends with the General Index graph but there is a major difference in regards to yesterday’s candlestick!

While General Index gained 0.55% on Tuesday, GREK ETF plunged 3.39% at Wall Street!

It’s also interesting to take a look at the most popular banking stock of the Athens stock exchange, the National Bank of Greece stock chart. Greek banks influence Greek stock market a lot, given the fact that quite a few of them are in the top 20 stocks of the biggest market capitalization. Recent talks of merging banks also helped that effect; the most recent takeover offer was made yesterday involving the purchase of Eurobank by National Bank of Greece.