DE30 tests July’s peak at 12570 pts

• European shares open higher but trim gains during the first hour

• DE30 struggles at 112.8% exterior retracement of early-October dip

• Wirecard (WDI.DE) sinks as Financial Times publishes accounts of company’s misconduct

Stock investors in Europe launched Tuesday’s trading in upbeat moods with gains being seen all across the Old Continent at session open. French and Dutch equities gained the most in the first minutes of trading while UK shares lagged being pressured by GBP strengthening.

Source: xStation5

The German DE30 managed to recoup yesterday’s intraday drop and painted a daily doji candlestick with long lower shadow yesterday. Looking at the H4 interval, one can see that the price has failed to break above the 12570 pts handle that is marked with the 112.8% exterior retracement of a downward move from the beginning of October as well as the local peak from 25 July. The index moved over 5.5% higher over the past week and is trading less than 1% below YTD high at around 12645 pts. As the index struggles to break above the aforementioned 12570 pts handle, it should be treated as the first near-term resistance to watch with YTD high being next in line. Looking at potential supports one should focus on 12500 pts area in case the index pulls back.

DAX members at 8:27 am BST. Source: xStation5

Share price of Wirecard (WDI.DE) takes a major dive today following Financial Times reports. The financial newspaper released internal Wirecard spreadsheets as well as correspondence between members of the company's finance team. According to the FT, those documents are proof that the German company tried to inflate sales and profits at business units in Dubai and Ireland. The stock sinks over 20% after the first 40 minutes of trade.

Commerzbank (CBK.DE) received a downgrade at Morgan Stanley. Morgan Stanley decided to lower the recommendation for Commerzbank’s shares to “underweight” from “equal-weight”. Price target was set at €4.9, implying an almost 6% decrease against yesterday’s close.

Volkswagen (VOW3.DE) decided to delay the decision on production plant in Turkey in response to unstable situation in the region.

According to the Reuters report, Deutsche Bank (DBK.DE) failed to timely report over a million of suspected money transfers with Danske Bank to regulators. The German bank did not do so until February this year. Regulators will now investigate if the Deutsche Bank staff tried to cover them up. 

HelloFresh (HFG.DE), the German meal-kit company and SDAX index member, reported earnings for the third quarter. The company managed to outperform expectations in July-September period with high revenue, good retention rates and solid acquisition of customers. The company decided to boost full-year outlook and is the best performing stock in SDAX today.

HelloFresh (HFG.DE) is the best performing SDAX member in 2019. The stock was moving lower at the beginning of October but managed to halt the downward move at the support zone ranging €13.50. Following today’s massive surge, company’s YTD share price increase extended to over 150%. HelloFresh is trading at a fresh ATH and finishing today’s above €15 (previous ATH) would be seen as a positive development. Source: xStation5