DE30 tests key support at 13150 pts

• Italian and French economies contracted in Q4 2019

• DE30 tests key zone at 13150 pts

• Bayer (BAYN.DE) gains on positive glyphosate opinion from EPA

Stocks in Europe traded mixed on Friday following lacklustre GDP releases from EU member countries. Q4 GDP growth in France and Italy unexpectedly turned out to be negative. However, major indices plunged when it was announced that 2 coronavirus cases have been confirmed in the United Kingdom. Italian and Polish equities are top laggards from the Old Continent today. 

Source: xStation5

DE30 surged yesterday evening but failed to break above the 50-hour moving average (green line) at 13275 pts handle. The index painted a new lower high and is once again moving lower. Key support zone at 13150 pts is being tested at press time. DE30 broke below this hurdle yesterday but buyers managed to push the index back above it quickly. In case it is breached once again, bears may target YTD lows at 12950 pts. The aforementioned 50-hour moving average is the near-term resistance to watch (13260 pts area) while the upper limit of the Overbalance structure (13345 pts) is the final one.

DAX members at 9:36 am GMT. Source: Bloomberg

Bayer (BAYN.DE) can be found among DAX top movers today. The German company gains after the US Environmental Protection Agency (EPA) said that glyphosate - the main ingredient of Roundup weedkiller- is safe to use. The agency will no longer approve labels saying that the substance is carcinogen. Bayer is facing thousands of lawsuits in the US over the product.

Deutsche Bank (DBK.DE) continues to surge following yesterday’s release of 2019 earnings. The German bank reported major loss for the previous year but said that its bottom line was primarily impacted by severance pay to leaving workers as well as asset write-downs

Martina Merz, CEO of Thyssenkrupp (TKA.DE) said that potential buyers valued its elevator unit at above €15 billion. The company expects to make a decision on the sale by the end of next month. Merz added that the company is in an extremely difficult situation due to its weak balance sheet and poor performance of some units.

Analyst actions

• Deutsche Bank raised target for Adidas (ADS.DE) shares from €255 to €273. Retains “hold” recommendation

Bayer (BAYN.DE) pulled back to the earlier-broken price zone ranging near the 23.6% Fibo level of the downward move started April 2015. The stock is gaining today, thanks to a positive opinion on glyphosate from EPA. In case another upward impulse is delivered the stock may aim for the topside resistance of the upward channel at €78.75. Source: xStation5