DE40: DAX in the zone of important support before the US PCE 💡

• J.P. Morgan Supports Sentiment Around Henkel AG
• European Tech Stocks Under Pressure from Mixed Workday Results
• DAX in 50-Day EMA Zone

Sentiment on the German stock market has deteriorated today. Many companies are recording declines in their quotations today, preparing for the key reading of the day, which will be PCE data from the US.

Sentiment on the European stock market has deteriorated today. The largest declines are visible today primarily in the automotive, technology and fashion sectors. Source: xStation5

Among the companies from the DAX index, the largest increases are currently occurring in Henkel and Beiersdorf. On the other hand, Commerzbank's shares are recording almost 2.8% declines. Source: Bloomberg Finance L.P.

DE40 (D1 interval)

DAX broke above the 50-day exponential moving average (blue line on the chart) a few days ago and tested another important resistance point, which was the local top of the consolidation zone of the session from the beginning of the second half of November. From a technical point of view, DE40 seems to maintain a general upward trend until the 100-day curve (purple line) is broken on high volume, so it is worth looking now to see if this index can stay above this zone permanently and if it can close today's trade above the 50-day EMA (tested by the supply side today). If such a scenario were to occur, it could mean an increase in the chances for the general upward trend to continue. On the other hand, staying between the previously mentioned exponentials could encourage the bears to break them and initiate a deeper downward correction.

Source: xStation5

Corporate News

Analyst J.P. Morgan raised Henkel AG (HEN3.DE) from neutral to overweight. The target price is set at €100, implying a 26% increase from the last close. The stock is up more than 2.5% today.

European technology stocks like SAP (SAP.DE) are under pressure today. Much of the sell-off is due to disappointing forecasts from cloud-based enterprise applications provider Workday (WDAY.US) yesterday. Bloomberg Intelligence reported that the 12-month backlog growth was close to the forecast, “indicating no real improvement in demand.”

Aroundtown (AT1.DE) is up more than 5% today after the company reported earnings that beat analysts’ expectations for the first nine months of the year. Moreover, the annual earnings forecast also indicates that the results could turn out better than previously estimated by analysts (FFO I between EUR 290 million and EUR 320 million; previously estimated EUR 300 million).