Despite the weak economic outlook for Europe, the US moving towards a recession again and slowing growth in China, the DAX climbed from 6.000 to almost 6.600 during the last weeks. I want to make a quick run through the Index and the 30 stocks, give a few comments and a possible trading approach for all them.
(Be aware this is earnings season. Unexpected results or outlooks can lead to drastic price moves even against the trend. Read the text with the charts alongside your screen (2-3 years, logarithmic scale)
You could use the list to:
- check the quality of my ideas in a few weeks
- maybe use my long suggestions if you really like the specific stock and wanted to buy it anyways
- build a position according to your market sentiment (more short positions, more long ones or maybe balanced)
DAX 30 (6557): 6.600 was an important support in Q2 - this time we approach in an upward move. I see little economic reason, why the index shall climb much further, but we are for sure in an upward trend. Enter if 6.600 is taken out at day end, use that also as S/L limit. Alternatively enter now and use the 200 day MA as S/L (currently at 6.340).
Addidas (57,9): Moving sideways. I would stay neutral on this one, at least as we have no break down below 56. Then we would also fall below the MVA200 (200-day-moving-average). Upwards you could play a breakout above 60 - but I consider that a weaker signal than the short play.
Allianz (79,06): Trending up again and approaching the MVA200, which also turned up again. The move up started at 69, and has lost some momentum in the last days. I have no strong opinion here - rather up, but use a tight S/L.
BASF (55,96): High quality paper with good dividends. Did not perform as good as the market during the pat couple of weeks. I see no clear trend here at the moment. Stay away until we break upwards above 58.
Bayer (58,3): Had a strong run from 48 to 58, but consolidating at this level now. Around 59 is the multi-year high. I would rather play thin on the long side - sure. If we can get to 60, much more is possible. Critical point is to find a S/L limit currently. Either enter with a small amount and a wide stop - eg. around MVA200 of 51. or MVA50 at 53. Or place a little bit more money on the table, with a tight stop at 56. Or wait for the breakout above pat highs and use them as S/L.
BMW (57,77): Was in a clear down trend and did stabilize here. I would stay neutral until a solid trend develops here or we fall back to 54.
Beiersdorf (53,48): Clearly moving upwards and close to 10-year-highs. I have heard little new take-over rumors lately, but something did drive the stock upwards sinde Q4'11. It also acted strong in the last correction. Go long with a S/L around 50.
Commerzbank (1,24): Clear down-trend, close to the lows of 2011/12. A clear short candidate. I also see no positive news ahead for CB. CB is to big to fail in Germany, but why should it not drop out of the DAX pushing the stock down further? S/L at 1,4 maybe.
Daimler (36.4): Same as BMW - stay neutral.
Deutsche Bank (25,6): Downward trend you could try to ride with a short position. It looks oversold at the moment, so maybe it will come back a little in the next days. Only a move above 30 would be a trend reversal in my eyes.
Dt. Börse (42,11): I would stay neutral here, as the stock recovered from the low at 36,5 and is back within the 44 / 38 borders. Breaking out of those limits, you could open a position.
Lufthansa (9.745): Must have missed some news here. Moves upwards strongly - maybe a little overbought. Still I would enter long here, giving the stock 1 EUR room to fluctuate.
Dt. Post (14,35): Moves along the general market and is back above a multi-year important upper price resistance at 13,80 to 14,00. As a more conservative approach, I would rather stay neutral at the moment and enter only, if the 2012 highs close to 15 are broken. Then use 13,80 as S/L.
Dt. Telekom (9,18): Made a huge jump upwards on Friday (news?). This is a little unfortunate, as i likte the stock currently. This is a nice dividend play earning almost 7 %. And now with the downward trend broken and the MVA200 behind us, I would be willing to enter here. Doing so at 8,80 would have felt better, though. Place S/L at MVA200 (currently 8.80).
EON (17.645): Another interesting dividend play that recovered to the upper end of its 2011/12 trading range (16 - 18). I would try to play a multi-day break-out of that range with the borders becoming the S/L. Currently a move upwards seems more likely, but who knows. Stay neutral for the time being.
FMC (57,05): Long term upwards trend and just jumped above the 55 resistance for several days. Looks like a buy with the resistance level becoming the new S/L.
Fresenius (85,62): Same story of course ... here the important price level is 80.
Heidelberger (37,12): No clear trend to see here - stay neutral.
Henkel (55,12): Good upward trend since October 2011. Recovered almost to 2012 highs - and thus to multi-year highs. Long play with stop at the recent lows (around 50).
Infineon (5,23): Ugly chart - price falling despite the overall positive movement in the last weeks. Current prices are around support levels of 2002, 2008, 2011 and resistance 2010. Short this one - next target maybe 4 EUR. S/L at 5,60.
K+S (37,95): One of my long time favourites, but a dropping stone since mid 2011. Recovered nicely fom 30 since mid-June and just made it above the falling MVA200. Overbought currently. Next important resistance level is 40. Either wait for 40 to be broken or use a tight S/L.
Linde (117,5): Several lower highs and lows since mid 2012. I would consider the downward trend in place until 120 is taken out (this is also were the MVA200 is located now). Maybe the new release regarding Lincare acquisition and the private offering of new shares will change the trend. Until this is proven, stay neural.
MAN (80,75): This is one of the palygrounds of Mr. Piech / VW - I would be especially carefull here. We see a clear support at 78 with the MVA 200 also just there. You could stay long as long as we hold that level (hoping for purchases from VW) or you could go short once we fall below that level. I prefer to wait and see here and would maybe enter if the DAX remains strong and the share moves up above 85.
Merck (78,10): Also a neutral one - it recovered from the June lows at 72, but there is still way to go to the 2012 and multi-year high at 86. Recent days have been sideways.
Metro AG (20,415): A short play since end 2010. With the sharp price drop at early July clearly oversold. Maybe not the perfect time to enter, Options for a S/L at 22, 24 or 27 EUR - so Metro could move up quite a bit with the bear trend still intact.
Munich RE (114,10): Also a nice dividend stock with 5+ % yield. It recovered to the upper limit of a trading range (100 - 116). So a neutral one currently.
RWE (34,06): As Munich Re a +5% yield play. This one dropped from 100 EUR over the past 5 years to 22 in 2011 and is now back at 34. Currently the trend is up - S/L at MVA200 (30,8).
SAP (48,90): If you missed the multi-year rise, maybe this is an entry level. 44 seems to be an important level for SAP, so somewhat below seems to be a natural palce for a S/L. 2012 peak was at 55 - a 10 year high.
Siemens (68.03): I would stay away from Siemens. I don't like the news, i think wind energy will be a big downside surprise over the years. MVA200 at 72 - the stock should break at least that one before you enter. Not taking out the support/resistance level at 68 clearly could even be a downwards indicator in the next days.
Thyssenkrupp (14,5): You could try to play a long term trend reversal here, with the recent lows at 11,70 as S/L. Outlook is rather bleak for TK, but maybe all the bad news are out already. Normally steel is very sensitive to growth ... I would rather stay away until a bearish chart pattern develops.
VW (137,1): Chart looks bullish to me - next resistance maybe between 142 and 145 (lower tops in 2011 and 2012). Either enter now with a S/L at MVA200 of 127 - or wait for a new 2012 high.
