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I always like to revisit and update my analysis and commentary.Last year I wrote and posted here a few articles on Iceland´s two stock market indices, since to me they seemed to be in the process of slowly reversing their long-term trends from down to up. In my view, a structure change has occurred in the OMXI15 Index – confirming its reversal to the upside. Additionally, it has now started to outperform the local benchmark index for government bonds (NOMXIBB) – as can be seen in the ratio indicator in the lower window of the chart – which is a very positive sign.The OMXIPI Index looks strong as well but has yet to take out its February 2023 high and reverse convincingly the course of its relative performance against NOMXIBB. Both indexes, OMXI15 and OMXIPI, reached new 52-week (one-year) highs a while ago.For years, I have used curved trendlines as part of my chart analysis. They are hand-drawn based on strict rules and their right side serves as a guide for a potential future path of the index levels or stock prices and may act as a possible support and resistance level. In September of last year, I drew in curved trendlines for the OMXIPI and OMXI15 indices, as shown in the charts below. OMXIPI – Monthly Chart
OMXI15 – Monthly Chart
The rolling one-year or 12-month return of the OMX Iceland All-Share Price Index (OMXIPI) in December was +12.5% and about one percentage point above the 14-year average. My ‘cyclical adjusted return’ measure of the Index is now in positive territory, as evidenced by both the blue line and the brown line being above the zero line.OMXIPI – Return Charts
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