IBEX 35: Summer Rally or Final Top?IBEX CFD CFD (Jul 2025)ACTIVTRADES:ESP35N2025ActivTradesBy Ion Jauregui – Analyst at ActivTrades Consolidation and Vertigo at Peak Levels In 2025, the IBEX 35 has staged a moderate yet consistent rally, reaching levels not seen since 2015, recently hitting 14,373 points. After a strong start to the year, fueled by the stabilization of interest rates in the eurozone and a recovery in the banking sector, the index has been consolidating within a sideways-upward channel. This consolidation phase has acted as a pause after the significant gains accumulated since October 2023, when the index hovered near the 9,000-point mark. However, the current high zone represents a technically demanding barrier. If broken, it could pave the way for one final upward move before a potential correction. Last Push Before the Turn Fundamental Analysis The performance of the IBEX 35 in 2025 has been mainly supported by solid corporate earnings, particularly within the financial sector, which continues to benefit from the elevated interest rate environment. Banks have reported robust interest margins, playing a key role in driving the index higher. Additionally, defensive stocks like Iberdrola, Endesa, and Naturgy have provided stability amid persistent macroeconomic uncertainty. However, growth forecasts for the Spanish economy are beginning to be revised downward, and persistent core inflation casts doubt on the ECB's ability to cut rates swiftly. Thus, although the base scenario still favors a continued recovery, risk factors are starting to build, which could impact the index’s trajectory in the second half of the year. Furthermore, regulatory changes in regions such as Catalonia concerning the housing sector are affecting rental companies and platforms like Airbnb in cities like Barcelona. Tensions between the Ministry of Transport and construction companies are also mounting over the planned reversal of concession contracts for 11 first-generation motorways, spanning nearly 1,000 kilometers—a dispute that could end up in court. Publicly traded firms involved include Abertis, Acciona, ACS, Ferrovial, and FCC. Technical Analysis From a technical standpoint, the IBEX 35 is trading within a sideways-upward channel that has served as a consolidation phase since May, following a strong rally that began in late 2023. The upper resistance of this channel is around 14,373 points, while the lower boundary extends to 13,615 points, acting as the main support level. As long as the index remains above this threshold, a breakout to the upside remains plausible. Currently, the point of control is showing bearish delta pressure just above, suggesting that the July 7th upward move is holding above the 13,930-point area. This level coincides with the 50-day moving average, which indicates that the price may still have bullish momentum and could attempt one last summer rally. However, if this level is breached, the upward move may be limited, especially since trading volumes have remained relatively stable. The RSI is slightly overbought at 60.79%, and the MACD is trending above its signal line—pointing to a potential buy signal and continued upward movement. In this context, investors should closely monitor the upcoming sessions: a clear breakout above resistance could trigger fresh buying, but failure to overcome the congestion zone could increase the likelihood of a deeper corrective phase. Portfolio Rotation? Alternative Markets to Watch With the IBEX 35 hovering near relative highs and showing potential long-term exhaustion signals, some investors may consider rotating toward markets with greater upside potential: EuroStoxx 50: Still has room to set new annual highs. As long as it holds above 5,200 points, it remains in an upward channel. A breakout above 5,430 could trigger a new rally. Chinese markets (CSI 300 / China A50): The index recently reached new yearly highs, breaking above levels not seen since December 2024. Despite structural economic weaknesses, government stimulus could support short-term momentum. It’s worth noting that while the China A50 index has a slight bullish bias, it has remained range-bound since October last year. Being composed of the country’s top companies, this might reflect a more subdued economic reality compared to the more volatile CSI 300. Tech indices (Nasdaq 100): Easing bond yields in the U.S. and strong tech earnings could continue to support the Nasdaq, particularly in a growth-seeking environment. Commodities and emerging markets: With a potential correction in Europe, investors may also consider real assets and more cyclically sensitive markets such as Latin America or emerging Asia. ******************************************************************************************* The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication. All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance and forecasting are not a synonym of a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk. Political risk is unpredictable. Central bank actions can vary. Platform tools do not guarantee success. Regulated status does not guarantee security.