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European markets trade higher
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DE30 tests resistance at 15,550 pts
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Moody's upgraded long-term rating of Merck
European stock markets are trading higher on the final trading day of the week. Sentiment was boosted by a somewhat mixed release of flash PMIs for October from France and Germany. French and Russian blue chips indices are European top performers, trading around 1% higher. Spanish IBEX 35 (SPA35) lags behind and drops 0.1% at press time.
Source: xStation5
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Open account Try demo Download mobile app Download mobile appSituation on the DE30 is little changed compared to yesterday but there is a chance for a breakout from the trading range on the German index. The index is once again testing the upper limit of a recent short-term trading range, marked with the 61.8% retracement of the correction started in August 2021. This area is additionally strengthened by the upper limit of the Overbalance structure and a move above would hint at a trend reversal. Apart from that, the 50-period moving average is about to break above the 200-period moving average on the H4 interval and paint a pattern known as the "golden cross". This is a bullish pattern but it is subject to a lag. In case of a break above the 61.8% retracement, bulls may target 78.6% retracement marked with local highs from mid-September.
Company News
Shares of Volkswagen (VOW1.DE) and Porsche Automobil Holding (PAH3.DE), holding company owning Volkswagen and other automotive businesses, gained in the late afternoon yesterday, following a report from Manager Magazin. According to the report, the German carmaker is reportedly considering an IPO of the Porsche premium brand. Neither Volkswagen, nor Porsche Piech family, majority owner of Porsche Automobil Holding, commented on the content of the report.
Moody's upgraded the long-term rating for Merck (MRK.DE) from "Baa1" to "A3". Rating agency named improved business outlook as well as conservative financial policies as reasons behind the upgrade.
Analysts' actions
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RWE (RWE.DE) upgraded to "buy" at HSBC. Price target set at €42.00
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Hannover Re (HNR.DE) downgraded to "hold" at Societe Generale. Price target set at €165.00
RWE (RWE.DE) broke above the 200-session moving average earlier this week (purple line). After a brief pause yesterday, upward move was resumed today, thanks to an upgrade the stock received at HSBC. Shares of RWE traded within a mid-term trading range and a near-term resistance to watch can be found in the zone ranging below the €34.50 - the upper limit of the range. Source: xStation5
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