DE30 trades sideways between 50- and 200-hour moving averages

• Stocks in Europe trade mixed

• DE30 trades between 50- and 200-hour moving averages

• Brenntag boosts full-year EBITDA forecasts

European stock markets are trading mixed on Wednesday and struggle to find a common direction. Indices from Spain, Italy, France and Poland trade lower while stocks in the UK, the Netherlands and Russia post small gains. Scale of moves is minor and given lack of key economic releases or other events scheduled for the later part of the day, volatility may be limited.

Source: xStation5

Situation on the German DE30 index has not changed much since our yesterday's analysis. The index traded sideways in between the support zone marked with 38.2% retracement of the upward move launched in mid-July and the resistance zone marked with the 23.6% retracement. However, a look at the moving average on the H1 interval gives us some more clarity. The German index has been trading in a narrowing range recently, marked with the 200-hour moving average (purple line, upper limit) and the 50-hour moving average (green line, lower limit). The index is currently testing the lower limit of the range and break below could pave the way for a test of the aforementioned 38.2% retracement (15,650 pts area).

Company News

Brenntag (BNR.DE), the German chemical distribution company that will become DAX member following the upcoming index revamp, boosted its full-year EBITDA forecast. The company expects full-year EBITDA to reach €1.26-1.32 billion, up from a previous guidance of €1.16-1.26 billion. New forecast is also higher than market expectations (€1.22 billion).

Harald Wilhelm, Chief Financial Officer of Daimler (DAI.DE) said that demand for Mercedes luxury cars remains strong in North America, Europe as well as China. Wilhelm said that in spite of shortages on the semiconductor market, the company expects sales in its Mercedes-Benz division to stabilize in the final quarter of the year. The Mercedes-Benz unit is still expected to achieve a 10-12% profit margin in 2021.

Analysts' actions

• Wacker Chemie (WCH.DE) downgraded to "hold" at M. M. Warburg. Price target set at €166.00

• Lanxess (LXS.DE) upgraded to "outperform" at Credit Suisse. Price target at €76.00

Brenntag (BNR.DE) launched today's trading little changed compared to yesterday's closing price but moved higher shortly after session launch on the back of upgraded full-year forecast. However, bulls did not manage to push share price above the upper limit of the current trading range in the €87.00 area. Stock pulled back and is currently testing the 50-hour moving average (green line). Source: xStation5