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German government expected to present major climate protection plan today
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DE30 seesaws within the resistance zone ranging 12420-12450 pts
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Covestro (1COV.DE) pulls back after failing to break above the resistance zone and 200-session moving average
European indices lack a common direction at the beginning of Friday’s session. German, French, UK and Dutch equities started the day lower while stocks in Spain, Italy and Austria moved higher in the first minutes of trade. Retailers and utility companies outperform the most as a group while chemical and automotive stocks lag.
Source: xStation5
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Open account Try demo Download mobile app Download mobile appDE30 managed to surge above the resistance zone ranging 12420-12450 pts handle yesterday but failed to uphold this gain. A pullback occurred later on but the lower limit of the zone (12420 pts) managed to fend off the bears. Direction of a break from the zone will be crucial in near-term but keep in mind that the trend remains upward as long as the price stays above the lower limit of the Overbalance structure (12115 pts, yellow box). In case a break from the zone occurs, traders should focus on one of the two levels: support at 33-period exponential moving average (12390 pts, green line on H4 interval) and resistance marked by this week’s high (12495 pts).
DAX members at 8:30 am BST. Source: Bloomberg
The German government is set to present new climate protection plan today in the afternoon. The paper is expected to feature harsher actions aimed at limiting greenhouse gas emissions. While the exact scope of the agreement is not known yet, some estimates were made based on earlier released draft proposals. For example, Union Investment estimates that new climate package could cost DAX members as much as €5.2 billion per year, or 3.7% of index’ total operating profit for 2018. Among companies that are expected to be hit the most one can find Covestro (1COV.DE), BASF (BAS.DE), ThyssenKrupp (TKA.DE), BMW (BMW.DE), Volkswagen (VOW1.DE), Daimler (DAI.DE), Continental (CON.DE) and HeidelbergCement (HEI.DE).
According to the Manager Magazin report, BMW (BMW.DE) plans to slash headcount by as much as 6000 jobs by 2022. The move is said to be a part of a €12 billion cost-savings program. Job cuts will mostly take place in company’s headquarters. The company declined to comment on the report but it is rumoured that the plan may be revealed in December. Apart from that, Manager magazine reports that R&D chief is set to leave the German carmaker next summer.
Shares of Covestro (1COV.DE) launched a major downward move after painting a double top pattern near €95 handle in Q1 2018. Shares are trading over 50% lower after 18 months but the stock has been on the rise over the past month gaining around 20%. Price is currently pulling back after failing to breach above the €45 handle, where a mix of 200-session moving average (purple line) and key resistance zone can be found. Source: xStation5
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