DE30 bounces off the 13,800 pts area

• European markets trade mostly lower

• Inverse head and shoulders pattern on DE30 chart

• Siemens Healthineers upgrades 2021 outlook after results

European stock markets are trading mostly lower on Wednesday. However, there are some exceptions like French CAC40 (FRA40) or Spanish IBEX (SPA35). Economic calendar for the European session is empty and the main market events of the day - FOMC meeting and Big Tech earnings - are scheduled for the evening. Having said that, trading during the European session may be a bit muted as investors await those events for future hints.

Source: xStation5

DE30 dropped at the start of today's cash trading in Europe but has found support at the 13,800 pts zone. Taking a look at the H1 chart, we can see that an inverse head and shoulders pattern surfaced with a neckline marked by the resistance zone ranging between 61.8% retracement and 13,935 pts mark. Potential range of a breakout implies a massive 350 points upward move after a break above the neckline. Should we see a realization of the target, the German index would break above its all-time high at around 14,100 pts.

Company News

Speculative frenzy fuelled by US retail investors has sent GameStop shares into the sky and has triggered massive losses for hedge funds with short positions on the stock, like for example Melvin Capital Management. However, the situation has spillovers into other stocks as well. Two German stocks, Varta (VAR1.DE) and Evotec (EVT.DE), have made big gains recently and the upward move continues today. Melvin Capital has had short positions on those two companies as well and there is speculation that recent gains can be fuelled by closing of those short positions.

Siemens Healthineers (SHL.DE) released calendar Q4 2020 results. EBIT increased 51.5% year-over-year to €738 million with EBIT margin jumping from 13.6 to 19.1%. Sales were 13.3% YoY higher at €3.87 billion. Adjusted EPS increased from €0.36 in Q4 2019 to €0.49 in Q4 2020. Siemens Healthineers decided to upgrade the 2021 outlook following solid 2020. The company now expects revenue growth of 8-12%, up from 5-8% previously. Adjusted EPS is expected to come in at €1.63-1.82, up from €1.58-1.72.

Delivery Hero (DHER.DE) announced that its Latin American operations became carbon-neutral and said that it plans to be carbon-neutral globally by the end of 2021.

Solid results and upgraded 2021 outlook have triggered a rally on Siemens Healthineers (SHL.DE) Stock cleared resistance zone ranging above 78.6% retracement of a drop started in late-May 2020 (€45 area). The next level to watch is marked with an all-time high at around €47.25. Source: xStation5