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European markets trade higher on Tuesday
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DE30 makes another test of 13,250 pts resistance
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Deutsche Boerse will expand DAX to 40 members
European markets trade higher on Tuesday as investors welcomed Trump's recommendation to the General Services Administration to begin the transition process to Biden's administration. Donald Trump still refuses to concede but recommendation greatly increased odds of peaceful transition.
Two reports from Germany were released this morning. Q3 GDP data came in at 8.5% QoQ, revised higher from 8.2% QoQ. Components showed a solid performance of private consumption, investments in machinery and equipment as well as exports saw solid double-digit increases. However, overall investments were slightly weaker-than-expected. IFO index for November turned out to be weaker-than-expected as well with expectations subindex dropping to the lowest level since June.
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Source: xStation5
DE30 made a failed attempt of breaking above the 13,250 pts resistance zone yesterday. The index reached a new 2-month high at around 13,300 pts but failed to hold onto these gains and pulled back below the aforementioned price zone. Decline was halted at the 50-hour moving average (green line) and DE30 rebounded towards 13,250 pts resistance afterwards. A sequence of higher lows can be spotted on the chart hinting that bulls remain in advantage. Economic calendar is light today so volatility may depend on headline news. Biden team is expected to name candidates for top government posts later today and it may trigger some moves. Near-term support to watch are 50-hour moving average (13,170 pts) and upward trendline (13,080 pts). Potential range of the breakout from ascending triangle pattern points to an upward move towards 13,600 pts area.
DAX members at 10:07 am GMT. Source: Bloomberg
Company News
Deutsche Boerse (DB1.DE), operator of the German stock exchange, announced that changes are coming to the DAX index in the third quarter of 2021. The biggest change of all is that the index will be expanded from 30 to 40 members. Apart from that, companies will face tougher requirements for inclusion to the German blue-chips index, what is related to the accounting scandal involving payments company Wirecard.
Analyst actions
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Continental (CON.DE) upgraded to "buy" at Citi. Price target set at €132
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Deutsche Boerse (DB1.DE) upgraded to "buy" at Oddo BHF. Price target set at €155
Deutsche Boerse (DB1.DE) launched today's session higher but has erased all of the gains since. Stock is testing a long-term support zone at €133. Should we see a drop below, the way towards early-November low at €125 will be left open. Source: xStation5
