DE30 attempts a break above short-term trading range

• European indices move higher at the beginning of a new week

• DE30 trade near the upper limit of a short-term range

• Vonovia (VNA.DE) and Deutsche Wohnen (DWNI.DE) pull back amid Berlin rent freeze

Investors from Europe launched new week in upbeat moods. Gains can be seen on indices across the Old Continent with a few exceptions. Stocks from Portugal trade lower while Polish and French indices lag in the vicinity of Friday’s closing prices.

Source: xStation5

DE30 halted an upward move slightly above the early-July peak (12645 pts). The index has been range trading since. The support zone ranging 12590-12600 pts serves as the lower limit while the resistance zone ranging 12670-12685 pts serve as the upper one. DE30 is attempting a break above the upper limit at the beginning of Monday’s session. In case this attempt is unsuccessful, the first support to watch is, of course, the lower limit of the range. However, one should also pay attention to the 12570 pts handle as it is the lower limit of the Overbalance structure. According to this methodology, breaking lower would hint at reversal in a short-term trend and could result in deepening of a downward move. In such a scenario, the 12500 pts handle could be the first stop for the bears.

DAX members at 8:20 am BST

Authorities in Berlin decided to impose a 5-year long rent freeze in the capital of Germany. The move is aimed at tackling surging housing costs. Given that rents in Berlin more than doubled over the past decade, the decision came as a relief for tenants. However, real estate owners like Vonovia (VNA.DE) or Deutsche Wohnen (DWNI.DE) are already feeling the pain of the ruling as their shares decline at the beginning of a new week.

SAP (SAP.DE) is trading higher today after confirming its full-year forecasts on Friday. The German software company reiterated that it expects operating profit in a range of €7.85-8.05 billion. Cloud revenue should fall into €6.7-7 billion range.

Wirecard (WDI.DE) hired KPMG to conduct an audit and address accusations raised by the Financial Times (FT). Let us recall that FT accused Wirecard of inflating sales and earnings. Share price of the German payments company plunged following the release of FT report.

AMS, the Austrian sensor manufacturer, renewed its €4 billion (€41/share) takeover offer for Osram AG (OSR.DE). The acceptance threshold was lowered to 55% this time after earlier offer failed to gather required support.

Deutsche Boerse (DB1.DE) trades lower following a downgrade at Oddo BHF. The financial services firm lowered rating for the stock to “reduce” from “neutral”. Price target was set at €130, implying an 8.9% decline against Friday’s closing price.

Vonovia (VNA.DE) failed to break above the ATH reached in May 2019. The stock is pulling back being pressured by Berlin rent freeze. The first near-term support to watch is the €47 handle. However, the first “key” support to watch is the zone ranging below €45 handle. Source: xStation5