GREK and NBG

grek july 10 2015nbg july 10 2015

Just three days ago we showed the GREK ETF as a buy and mentioned that National Bank of Greece was in a similar position. Both sport a clear “expanding diagonal triangle”, a structure that very reliably promises a violent return to its starting point. The first was a buy at $10 and the second below $1. Both traded well below those levels on the 8th of July, the day after the recommendation. We would sell the GREK at $12.50 and the NBG at $1.45 and put the orders in in advance. We have no idea whether or not either or both of these stocks can go higher than those prices, very possible they can but, but we would be perfectly happy with 25% and 45% in about a week  and happy to leave it at that.

     Things are moving along quite nicely on the Greek front. One of the main problems of course is the underground cash economy with a lot of bribes at all levels. Without these bribes or “fakelaki” -  as in souvlaki – as the small envelopes apparently are called, the whole economy grinds to a halt, but with them tax collection is impossible. This is not unique to Greece. Throughout the Middle East “bakshish” is rampant and it does make things different to integrate into the “core” values of the European community. But for the next week things look promising. Even Yellen is sticking to her timetable of one move this year.

GREK, Global X FTSE Greece 20 ETF

grek july 07 2015 bgrek july 07 2015 s

Earlier I predicted that the Athens index would not go down. So far that has been correct. Agreed that the markets close might have something to do with it but so what. Looking at what does trade it would seem that there is still some optimism . The National Bank of Greece, NBG as an ADR, that is NOT the central bank just like Bank of America is not, has gone down a little and may actually be a buy at $1 coming from $700, but we would prefer using this 20 stock ETF. How it is priced is a riddle  as presumable the underlying stocks are not trading, but that is a different matter all together. Notice that there is no new low (yet?), but we can already count 5 waves down. Also , in the more detailed chart, there is a rather clear “expanding diagonal triangle” which suggest a violent move back up to about $14 and a bit, roughly 40% from here.

By the way, did anyone notice that the results from the referendum were dead on the golden ratio of 61.8 to 38.2 for whatever that may mean.