DE30 makes another test of 14,575 pts resistance

• European stock markets trade higher

• DE30 makes another test of 14,575 pts resistance

• Beiersdorf to replace Delivery Hero in DAX index

European stock market indices are trading higher at the beginning of a new week, following an upbeat trading in Asia earlier today. Major indices from the Old Continent launched today's trading around 1% higher and added to those gains later in the session. Dutch AEX (NED25) is European top performer with a gain of almost 1.6% at press time. Russian equity indices are the only ones from Europe to trade lower today. Traders should keep in mind that liquidity conditions may be slightly thinner today as traders from Norway, Sweden, Hungary and Switzerland are off for holidays. 

Source: xStation5

A new attempt of breaking above the 14,575 pts resistance zone can be spotted today on DE30 market. German index bounced off the short-term trendline on Friday and resumed an upward move, which continues at the beginning of a new week. Note that a large inverse head and shoulders pattern is still in play - price has not reached a 15,200 pts target yet and neither has it pulled back below the neckline at 14,240 pts, what would invalidate the setup. Breaking above the 14,575 pts would be a strong, short-term bullish signal and may be followed with an acceleration of the upward move. In such a scenario, 14,950 pts zone marked with local lows from February and a local high from late-March will be the next target for bulls.

Company News

Deutsche Boerse announced planned changes to the composition of main German stock market indices. Beiersdorf (BEI.DE) will move from the MDAX index to DAX index and replace Delivery Hero (DHER.DE). Delivery Hero will be downgraded to MDAX index. Encavis (ECV.DE) will be promoted from SDAX index to MDAX index and replace Hypoport (HYQ.DE). Changes will come into effect on June 20, 2022.

According to a Bloomberg report, the German finance ministry is open to the sale of its stake in Commerzbank (CBK.DE). However, such a sale would only occur if share price rallies further and the acquirer agrees for the bank to remain anchored in Germany and support the German economy. It is said that Germany has already approached some European banks as potential acquirers but sale is likely to be postponed until after the fallout from war in Ukraine subsides. 

Mercedes-Benz Group (MBG.DE) will recall almost a million vehicles of ML and GL sports series, built between 2004 and 2015, amid concerns over a potential problem with brakes. This relates to 993 thousand vehicles worldwide out of which 70 thousand are in Germany.

Beiersdorf (BEI.DE) gains slightly today after Deutsche Boerse announced the stock will make a comeback to DAX index. Stock continues to test the resistance zone ranging below €97.00 mark but so far, no decisive break above was made. Another failure to break above may trigger a pullback on the stock. In such a scenario, the 50-session moving average (green line) should be considered the first near-term support. Source: xStation5