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Lacklustre moods at the beginning of the European session
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DE30 attempts to break back above the 12700 pts handle
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Continental (CON.DE) extends upward move being supported by upgrade
Majority of the European stock market indices trade lower at the beginning of Wednesday’s session. The biggest declines can be spotted on the Russian, Polish and French exchanges. The UK FTSE 100 (UK100) is trading slightly above yesterday’s closing price thanks to the weakening of the British pound.
Source: xStation5
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Create account Try a demo Download mobile app Download mobile appDE30 pulled back yesterday but found a support at the 33-period exponential moving average (green line, H4 interval). The index is attempting a move higher at the beginning of Wednesday’s trading. The nearest resistance lies at recent peak (12780 pts). There is quite a lot of potential support levels in case the index was to erase morning jump and deepen yesterday’s decline. However, the zone ranging around 12115 pts handle can be considered key support as it is not only marked by previous price reactions but also by the lower limit of the Overbalance structure (yellow box). A break lower would, in theory, hint a short-term trend reversal.
DAX members at 8:16 am BST. Source: Bloomberg
Problems of the South African Eskom cause power shortages in parts of the country. The situation impacts Volkswagen’s (VOW3.DE) operations in South Africa. The German carmaker said that disruptions has already cost it over 10 million ZAR this year.
Infineon Technologies (IFX.DE) can be found among DAX laggards at the beginning of Wednesday’s session. Shares of the global chipmakers are under pressure after Texas Instruments (TXN.US) signalled weaker demand for its products. Texas also issued disappointing revenue and earnings forecasts.
Continental (CON.DE) announced that it will spin off its powertrain division instead of selling it through an Initial Public Offering. Investors welcomed the decision and sent shares of the company significantly higher on Tuesday. The company trades higher today as well, thanks to the boost it has received at MainFirst Bank. The Bank raised recommendation for the stock to “outperform” from “ neutral”. Price target was set at €147.
Covestro (COV1.DE) gains the most in the DAX index. The stock was upgraded to “buy” at Commerzbank. Price target was set at €56.
Continental (CON.DE) bounced off the €110 handle at the beginning of October and rallied over 12% since. The stock is testing the 38.2% Fibo retracement of the downward move started in mid-April (€124.50). In case bulls manage to overcome this obstacle, the next important resistance can be found around the €133 handle. Source: xStation5
