I am often questioned whether technical analysis really works or is just science fiction. The charts of the two following Greek stocks is the ultimate proof that technical analysis can make money, if stock traders pay attention to really important price levels, such as long-term support and resistance levels. Regarding Greek National Bank (ASE:ETE), which is also traded in the United States (NYSE:NBG), the stock seems to have found support during its 3-year decline at the price level where it had found again support in 2003 after falling from €30 to €4.39. This time buyers held the price at €4.36, verifying the strong support level. The stock has already gone up to €5.30 twice, after testing the support level 2 more times.
Meanwhile Greek Organisation of Football Prognostics S.A. (ASE:OPAP) saw their shares fall from €17 to €10 during the last 3 months. It’s no surprise that the stock found support at €10, as that was a price level where the stock stopped declining a year ago after a very long-term drop. The support level at the OPAP graph was verified by a hammer candlestick formation back in 2010.
Considering the importance of both support levels found at ETE and OPAP stock graphs, I’ll be holding my positions for quite a few months if not years, especially in the case of the bank’s stock. Risking about €0.50 per share for some outstanding profits is a great long-term investment in my book. History repeats itself, so I will be shocked not to see the stocks’ price enter a very long-term uptrend. On the other hand, the [intlink id=”1378″ type=”post”]financial status of Greece[/intlink] is something to think about.
Disclaimer: I’m long ETE but I wasn’t quick enough to buy OPAP stock when the price collapsed to the support level. Maybe if I get lucky and OPAP stock retests the support level, I am definitely buying OPAP shares.