No doubt that the coronavirus pandemic had a major effect on all business sectors, both in a positive and a negative way. Some sectors like technology, so far have shown roughly a 16% gain during the first half of 2020. However, sectors like real estate, have been hit hard during the pandemic and lost around 15% in the first half of the year. This forced some businesses to cut cost drastically, in order to stay afloat. That included laying off staff, which led to downsizing their office spaces.
Companies like the Spanish Inmobiliaria Colonial SOCIMI SA (BME: COL), which is an office rental business, with its central business locations in Madrid, Barcelona and Paris, have suffered from economic effects of the virus as well. But despite the current global difficulties, the firm is still managing to stay alive, as it operates mainly in prime locations, which tend to stay attractive even during hard times. Some rich companies like to go bargain-hunting during economic downturns, for things which were more expensive, when the times were better. This is where Inmobiliaria Colonial comes in, offering their prime-location office spaces for businesses that are still able to perform well.
But of course, let’s not forget about the other side of the coin here, where some companies may start switching to the idea for their employees to work from the comfort of their homes. The COVID-19 situation has proven that such an approach for businesses can be very helpful in minimising their costs and staying afloat. However, as we all understand, not all employees have the possibility to work from home, due to various reasons. That is why it seems that the idea of working from the office is here to stay, at least for some time more.
Looking at the technical picture of the Inmobiliaria Colonial SOCIMI SA stock, since the sharp slide in the beginning of March, it has been coiling up, trading roughly between two of its short-term tentative lines, an upside one drawn from the low March 20th and a downside one taken from the high of April 7th. For now, we will take a neutral stance and wait for the price to break one of those lines, before we could consider the next directional move.
A break above the aforementioned downside line and a push above the 8.79 barrier, marked by the high of June 17th, may attract a few extra buyers into the field. This might help the stock travel to its next possible resistance area, at 9.07, marked by the highest point of June, where COL could stall temporarily. That said, if new investors still find that price attractive, this might give the stock another push, potentially opening the door to the 9.75 level, marked by the highest point of April.
Although the RSI is pointing lower, the indicator remains above 50. The MACD is somewhat flat but is still sitting above zero and the trigger line. Both oscillators seem to support the idea of standing pat, at least for now.
Alternatively, a break of the previously-discussed upside line and a price-drop below the 7.73 zone, marked by the lowest point of June, could force new investors to temporarily move away from entering. COL may end up sliding to the lowest point of May, at 7.08, a break of which might clear the way to the 6.58 level. That level marks the low of March 23rd.
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