At the end of March, Bankinter SA (BME: BKT) announced that they are planning for a company spin-off, where one of its business units would become a new independent company, with its own shares listed on the Madrid stock exchange. The new company is Linea Directa Aseguradora Compania SA, which was previously the insurance unit of Bankinter. The new company got listed at the end of April and now carries a ticker of LDA (BME: LDA). Before the floatation happened, the insurer agreed to pay its parent company a special dividend of 120mln euros. After the floatation, Bankinter remained a 17.4% stake in LDA, with the rest being distributed among existing Bankinter shareholders. The current market cap of LDA is around 2bln US dollars.
Although this seems to be positive news, looking at the technical picture of BKT, we can see that the stock took a dive at the end of April. After taking a slight pause, the share price is once again seen to be drifting lower, as it had broken below the lowest point of May, at 4.50. For now, new buyers might hold-off from entering the arena, until a clear reversal signal is established.
If the stock continues to trade below the 4.50 zone, this may keep new buyers away for a while, as such a move might continue drifting lower. That’s when we will aim for the 4.31 obstacle, or even for the 4.06 area, marked by the low of November 30th, 2020. Initially, BKT could stall there for a bit, but if there are still no new buyers in sight, the share price may slide towards the next possible support area between the 3.83 and 3.87 levels. Those levels mark the highest points of October and the low of November 12th, 2020, respectively.
The RSI and the MACD are pointing lower. Also, the RSI remains well below 50 and the MACD continues to run below zero, while coinciding with the trigger line. The oscillators are in support of possible further declines, showing increasing downside speed.
In order to shift our attention to some higher levels, a push back above the 4.86 barrier, marked by the highest point of May, would be needed. This way, more buyers could see it as a good opportunity to step and bring the stock further north. BKT may travel to the 5.21 obstacle, a break of which might set the stage for a push to the 5.45 level, marked by the lowest point of April.
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