- European indices trade higher
- DE40 tests upper limit of bearish channel
- Zalando rallies 5% after upgrade at Citi
In spite of a flat opening of today's cash session on the Old Continent, the majority of European blue chips indices managed to gain following session launch. German DAX and French CAC40 trade 0.7% higher, UK FTSE 100 adds 0.2% and Dutch AEX gains 0.3%.
German industrial production data released earlier today turned out to be a positive surprise, but had little impact on equities. Zalando is DAX outperformer today, rallying over 5% after receiving an upgrade at Citi.
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Source: xStation5
Taking a look at DAX futures (DE40) chart at H1 interval, we can see that the index bounced off the 18,330 pts support area, marked with previous price reactions as well as the lower limit of the short-term bearish channel. The ongoing upward correction push the price above 18,500 pts resistance zone, marked with previous price reactions and 50-hour moving average (green line). The upper limit of the channel is being tested at press time, and a break above could hint at the end of short-term downtrend. In such a scenario, the next resistance zone to watch can be found in the 18,750 pts area.
Company News
Monsanto, a unit of German Bayer (BAYN.DE), scored a win in its Roundup legal battle. Missouri judge lowered the punitive-damages portion of the Roundup verdict from $1.5 billion to $600 million. The judge declined to order a new trial or threw out the entire verdict, as Monsanto had requested. However, the stock is pulling back today, with some analysts saying that lack of cut to compensatory damages portion is a disappointment.
According to Handelsblatt report, SAP (SAP.DE) overhaul strategy that is aimed at making the company more aligned with cloud technology and AI may result in the company cutting as much as 2 600 jobs in Germany. SAP announced back in January that it will cut 8 000 jobs worldwide a part of the reorganization. Company's aim is to conclude worldwide process by the end of Q1 2025.
Analysts' actions
- Zalando (ZAL.DE) upgraded to 'buy' at Citi. Price target set at €32.00
- Evonik Industries (EVK.DE) upgraded to 'buy' at Citi. Price target set at €22.00
- Wacker Chemie (WCH.DE) upgraded to 'buy' at Citi. Price target set at €130.00
- Allianz (ALV.DE) downgraded to 'neutral' at UBS. Price target set at €285.00
- Continental (CON.DE) rated 'buy' at Jefferies. Price target set at €73.00
Zalando (ZAL.DE) is one of the best performing German stocks today, following an upgrade from Citi. Stock is trading over 5% higher and may be about to snap a downward correction that began at the end of March 2024. Source: xStation5
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