German DAX; Lanxess; Dt. Post; Allianz; E.ON; RWE

Overall it was a good week in Germany. The DAX increased by 2.83%. Lanxess increased by 2.18% and Dt.Post by 2.84%.

The Lanxess chart did not really know what to do. The last three days he went to the side. The strength indicator increased last week very much but the gap between  +DI and -DI is getting smaller. We might see a sell signal after a bullish period of 5 weeks next week.

Dt.Post is certainly a keeper. The ADX crossed the 30 line last week to the north and indicates the trend is strong again.  The current upward trend is running since July and there is always the possibility investors might start to cash in to save the profit. While all indicators are looking healthy we would like to stress the all time high of this paper was in 2007 by 26.33 Euros. Another peak was in 2001 by 24.78 Euros. The current price of 23.36 Euros is quite high compare with the past. Keep in mind that big investors might cashing in and we will see a correction.

As mentioned last week Allianz developed a buy signal which was not confirmed by other indicators we are looking after.  The paper struggled last week and we are not sure if it will recover next week.

The most interesting development were the Energy Companies last week.  E.ON plus 8.15% and RWE plus 9.95%.  Good for those of us who bought shares. We did not and missed the boat. As discussed last week why all of the sudden this strong interest of investors? The volume is so big it cannot be Joe the plumper buying for his pension funds.  The German Handelsblatt is mumbling about a possible law change after the election next week with higher profit for the traditional Energy Companies. 

But the new Kanzler will be the current Kanzler and the Liberal might get kicked out of parliament like today in Bavaria. We have our doubts there will be big change. We go with a different explanation we found on the Internet: Shorties closing the positions. E.ON were running for nearly 3 months between 12.75 and 12.06 Euros. There was no incentive for Shorties to stay short. Apparently the industry is shorten by 12% according to some articles we found . But the volume is even too big for this explanation. We did have a similar situation earlier this year and got a peak beginning of April only to get further downtrends to the south. The volume will be next week back again to a normal level and we will not see such an further increase. Bottom line these companies do not have a business model to cope with Sun and Wind energy.

But as always: just my 5 cents