DE30 tests lower limit of trading range as uncertainty persists

• European stocks trade lower amid persisting uncertainty over Sino-US relations

• DE30 tested lower limit of trading range after cash session open

• E.ON (EOAN.DE) trades higher on the back of guidance raise

European stock market indices launched today’s trading lower echoing poor performance of Asian equities. Dutch equities are the top performers in Europe, while the biggest declines can be spotted in Portugal and Sweden. The German retail sales data for October released at 7:00 am GMT did little to ease pressure as it came significantly below expectations. The headline gauge dipped 1.9% MoM while market expected an increase of 0.2% MoM. 

Source: xStation5

DE30 tested support zone ranging above the 13150 pts handle at the beginning of Friday’s cash session. The zone marks the lower limit of the trading range and has stopped downward moves a few times in November already. The initial dip was almost completely erased. However, one should keep in mind that similar story was played yesterday after the opening of cash session - DE30 dipped, recouped losses and later relaunched downward move. Having said that, the aforementioned support zone may remain in play in the remaining part of the day. When it comes to potential resistance levels to watch, one should focus on 200-hour moving average (purple line, 13210 pts) as well as the level marking a midpoint of the trading range (13225 pts).

DAX members at 8:43 am GMT. Source: Bloomberg

Companies from the DAX index continue to trade under pressure amid uncertain outlook for Sino-US trade relations. Tech stocks along with automotive companies can be found among the worst performing sector groups. Meanwhile, E.ON, Lufthansa and Deutsche Post are the only DAX members to experience gains today.

E.ON (EOAN.DE) decided to raise guidance for 2019 as it sees a boost from Innogy acquisition. The German utility company expected adjusted net income to fall in €1.45-1.65 billion range, up from €1.4-1.6 billion. Adjusted EBIT is expected to come in between €3.1 and €3.3 billion (€2.9-3.1 billion previously). 

Lufthansa (LHA.DE) trades higher today after receiving an upgrade at Credit Suisse. Recommendation for the German carrier was raised to “outperform” from “neutral”. Price target was set at €20.25.

Deutsche Lufthansa (LHA.DE) continues to trade along the 200-session moving average (purple line). Stock price is finding support at the 38.2% Fibo level of the downward move started at the beginning of 2019.  Near-term resistance can be found at the psychological €18 handle. Source: xStation5