What to expect after the decree on the privatization of Banca MPS?

What to expect after the decree on the privatization of Banca MPS which, according to some authoritative sources, was approved by the government?

Before getting to the heart of the subject, let’s briefly recall the genesis of the State’s entry into Banca MPS and why privatization is necessary.

After the well-known events that affected the Sienese bank in 2017, the Italian State holds 68% of the capital of Banca MPS. The agreement with the European organizations provides that by June 2022 the State will exit the bank’s capital (or dilute its stake) and take on the 8 billion of impaired loans.

An interesting aspect also from a speculative point of view is that the exit of the state could also take place through a merger with other banks. We could, therefore, witness some other extraordinary transactions in the Italian banking scene. However, the most natural candidates for this type of operation are, at least officially, out of the game. Banco BPM has always excluded any interest in Banca Mps while Unicredit excludes acquisitions tout court.

Pending certain news, you can study the graphs which, as always happens, do not lie if analyzed with the right tools.

What to expect after the decree on the privatization of Banca MPS? The word to graphical and forecast analysis.

MPS Bank (MIL: BMPS) closed the session on 19 October at € 1.139, down by 2.06% compared to the previous session. Even the news reported above, therefore, did not help the share prices. Indeed, the decline of October 19 resulted in a significant increase in volumes.

On the other hand, the current trend on any time frame is bearish and at the moment there are no landing points from which to start up again. By applying a multi-time frame analysis we can reach the following conclusions. On the monthly basis, the closest target is in the 0.72 euro area (I price target). Over the week, the closest target is in the 0.71 euro area (I price target). On the daily basis, however, it is in the 1.021 euro area (II price target), while the maximum extension is in the 0.83 euro area (III price target).

In the event that it continues to go down, we can therefore conclude that a good point to buy is in the 0.71 / 0.83 euro area. Otherwise, a first indication of a reversal would be with a daily close of more than 1.215 euros.

Daily time frame

mps bank

Banca MPS: ongoing bearish projection on the daily time frame. The red oblique lines represent the Running Bisector levels; the horizontal lines the levels of The New Law of Vibration. On the left, the volume for each price level is shown. The middle panel reports BottomHunter’s signal. The minimum on the considered time frame is marked when it is equal to 1. The lower panel shows the volume traded for each bar compared with a 20-period zero lag exponential moving average.

Weekly time frame

mps bank

Banca MPS: ongoing bearish projection on the weekly time frame. The red oblique lines represent the Running Bisector levels; the horizontal lines the levels of The New Law of Vibration. On the left, the volume for each price level is shown. The middle panel reports BottomHunter’s signal. The minimum on the considered time frame is marked when it is equal to 1. The lower panel shows the volume traded for each bar compared with a 20-period zero lag exponential moving average.

Time frame mensile

mps bank

Banca MPS: ongoing bearish projection on the monthly time frame. The red oblique lines represent the Running Bisector levels; the horizontal lines the levels of The New Law of Vibration. On the left, the volume for each price level is shown. The middle panel reports BottomHunter’s signal. The minimum on the considered time frame is marked when it is equal to 1. The lower panel shows the volume traded for each bar compared with a 20-period zero lag exponential moving average.