German DAX, week of November 23rd, Allianz, Merck, Siemens, Volkswagen, Lufthansa

Last time we published here we said we do have some doubts about the DAX performance in November. We saw some risk but we saw also some possibilities.

The index recovered completely from the October disaster. As discussed last time we saw the possibility  to go back all the way to the 9,700 line. The negative trend channel of the blue lines were not confirmed. 

The popular economists of the German newspapers found of course an explanation. It was a statement of the ECB last Friday to make a QE policy like the FED did. But the above chart shows the trend change happened already at the beginning of the week. The week before it looked like the DAX would develop for the first time a lower high and would confirm a negative trend like shown by the blue trend lines.  But the magnitude on Friday was may be due to the statement. In general the DAX is running the whole year to the side between 9,000 and 9,700 points.  But we are confident we will see next week some reduction and the trend will go again in the direction of 9,000 points. They might take, secure the recent profit but mainly due to the long weekend in US.  Who wants to be invested in these days over a long weekend. You never know what these politicians will do....Needless to say the German hobby economists forgot to mentioned that when talking about the next week.

Lets us talk about the stock we mentioned last time.

First, there is Allianz. On October 31st. the price was 126.70Euros. As of November   21st.the price is 135.85 Euros. A plus of 7.2%. The trend is strong and healthy but we might see some cashing in next week.

We also spoke about Merck. On October 31st. the price was 72.07 Euros. As of November 21st the price is 78.54 Euros. A plus of 9%. We expect  some cashing in but the trend is very strong and might continue to go to the north.

Siemens was another candidate. On October 31st the price was 89.91Euros and on November 21st 93.98 Euros. A plus of  4.5%.  The chart touched the 200 days line and would confirm normally a trend. But the trend is very weak. ADX shows 9.9 points.  We think to take the profit is the right decision for the next week.

170.05 Euros was the price for Volkswagen on October 31st. Last Friday the share price was 177.95 Euros.  A plus of  4.6%. The trend is very strong with  an ADX of 44.87. We might see the paper crossing again the 200 days line to the north.

We got it wrong with Lufthansa. 13.7% increase since October 31 st is not bad at all. The trend indicator ADX  is now at 29.5 points. We might see a little bit more going to the north.

November was good but as discussed at the beginning US is on holiday this week. The kids have a school break. The demand from US will be lower and we suggest to close the positions and take the profit. 

But as always: just my 5 cents......

German DAX week of November 2nd; Allianz, Merck, Siemens, Volkswagen, Lufthansa

We did not write a block last weekend. Too many things happened in October and we were so stressed the other week about the jump of the stocks to the South. Keeping or not keeping the stock was the question. Was that only the hedgefonds rearranging their portfolio or did we get finally the doom days German Newspapers like Handelsblatt Online are talking about since January?

We decided not to sell our stocks and were quite pleased how the stocks jumped straight back to the north and developed a nice profit for October. Nevertheless it could have been significant more if we would have followed strict our trade system and would have sold after our investment got a sell signal.  Next time....

How does the DAX look like?

The chart shows very well the October disaster. The index is on his way to the north. Where will he create again a sell signal. Is he going back to the 9,700 points like all the time during 2014? Or will this time the peak be lower and finally confirm a negative trend as we can see in the chart by the blue lines?  But the Dollar gets stronger, Euro weaker and the Germans can export to the States instead of Russia.

Let us speak about specific companies in Germany.

Allianz we discussed in the past. We still see this company on the winner site. The 200 days curve was crossed indicating the development is getting stronger.

All indicators showing us it will get better but the DI has not confirmed the buy signal yet. We will see if the momentum is good enough to push the stock higher.

Another candidate is Merck.

All indicators suggest the paper is a buy. The stock is in general in a positive trend channel, something the majority of German stocks can not say.

Siemens is another example where we can see it is not sure were the DAX will go during the next weeks.

The stock went all year long to the side and was falling in October out of the channel. All indicators are looking good and we expect the chart to go back into his channel. If not we will see the DAX falling again to the South.

An example for a risk that the DAX will fall again is Volkswagen.

The stock is in a negative trend since July and we are not sure if the last rebound has enough momentum to change the direction.

In the past we spoke about  Lufthansa. Nothing changed our opinion about this company.

The development of the last weeks confirmed our opinion. The pilots are still on their difficult to understand early pension trip and we only hope the management shows some backbones. Changes are done too late like the implementation of a better Economy Class set up by American Airlines nearly a decade ago. As we said in the past we are sure we will see the single price digit again.

But as always: just my 5 cents.......