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MEXICO IPC INDEX

A strong breakout is likely to take place on Mexico’s IPC Index. Last week’s price action breached multi-year horizontal resistance at 46,500 levels. The horizontal resistance was tested for 5 times over the past four years. Another week of strong price action will confirm the breakout on the local price index and will suggest higher levels in the coming months. It is important to note that both on weekly and monthly scale the index is going through low volatility period. Usually breakouts from such technical condition result in prolonged up/down trends depending on the direction of the breakout.

MEXICO IPC INDEX W

MEXICO IPC INDEX D

MEXICO IPC INDEX

Mexico IPC index is possibly preparing for a strong breakout to all-time high levels. Over the past three years, the IPC index tested the strong horizontal resistance for the 5th time. Since the beginning of April, price held close to the upper boundary. Last two months sideways consolidation can be a symmetrical triangle and a preparation for a breakout above 46,500 levels. 46,000-46,500 will act as strong resistance in the following weeks. A decisive weekly close above the resistance area can launch a multi-month uptrend for Mexico’s IPC index. Breakdown below 44,500 can result in a lengthy consolidation.

MEXICO IPC INDEX WEEKLY SCALE PRICE CHART

MEXICO IPC INDEX WEEKLY SCALE PRICE CHART

MEXICO IPC INDEX DAILY SCALE PRICE CHART

MEXICO IPC INDEX DAILY SCALE PRICE CHART

 

MEXICO IPC INDEX

Mexico’s IPC index, denominated in local currency, is preparing for a strong breakout. During Emerging markets poor performance (2011-2016), Mexico outperformed the MSCI Emerging Markets index. Strong relative performance is also reflected on the absolute performance of the IPC index, with the national benchmark now challenging horizontal resistance for the 5th time over the past 3 years. Breakout above strong resistance can push the index to all-time high levels.

Weekly price chart of the MEXICO IPC INDEX

Weekly price chart of the MEXICO IPC INDEX

The developing chart pattern could be an ascending triangle with bullish implications. Breakout above 46,500 levels will confirm the bullish chart formation and suggest higher prices that can target 55,000 levels.

Relative performance ratio between MSCI MEXICO and MSCI EM in local currencies

Relative performance ratio between MSCI MEXICO and MSCI EM in local currencies

Relative performance ratio between MSCI MEXICO and MSCI EM in U.S. dollar

Relative performance ratio between MSCI MEXICO and MSCI EM in U.S. dollar

While the MEXICO IPC INDEX is forming a bullish ascending triangle poised for a breakout to higher levels, here are some of the constituents that have similar bullish chart set ups.

Weekly price chart

Weekly price chart

GFNORTE formed a 3 year-long sideways consolidation. Stock is now challenging historical high levels. Breakout above 100 levels will be very positive.

Weekly price chart

Weekly price chart

2 year-long H&S bottom on ALPEK has strong resistance at 27.15 levels. A decisive weekly break above the neckline at 27.15 will result in higher prices.