The 11th of March (OSEBX close 435) I expected a correction to OSEBX, which reached an intraday low over the past few months of 409 the 15th. This was less of a correction than expected (but still down 6% within a few days). Since then the index has returned to trading in the narrow tunnel of 430 to 445, having difficulties breaching the barrier of the 76.40 fibb levels. Closing today at 436, virtually unchanged since the last update (and as such a better return for being allocated elsewhere).
The uncertainties regarding the peripherals in the eurozone, as well as increasing signals of weaker growth in the economies still support an underweight in equities. This is further supported by expectations of rate hikes which should make bonds increasingly attractive, and could reduce liquidity flowing into equities. In the current yield environment, however, the credit spreads found for higher rated debt instruments supports investments in Floating Rate Notes rather than bonds or equities.
In support of buying OSEBX we have a rising 200 daily moving average, currently at 417 (roughly 4.5 per. cent. down from today's close) which could prove a resistance level. But the risks in the economy in my opinion still provide a poor Risk/Reward.
Updated technical analysis of OSEBX:
(click image for full size)