DE30 approaches key resistance near 15,550 pts

• European markets trade higher

• DE30 approaches key resistance near 15,550 pts

• European car sales drop 23.1% YoY in September

Majority of the European blue chips indices trade higher on the final trading session of the week. Indices from Western Europe gain between 0.2 and 0.5% with Dutch, Spanish and Italian equities being outperformers. Polish WIG20 (W20) is a top laggard in Europe today, dropping almost 0.5%. Big event later in the day will be the release of the US retail sales data for September. Market expects a weaker reading after a solid increase in August.

Source: xStation5

DE30 broke above the 200-period moving average at H4 interval and is nearing a key resistance. Area ranging below the 61.8% retracement of the downward move launched in August 2021 (15,550 pts) is also marked with the upper limit of the Overbalance structure. In theory, a break above this hurdle would hint at a trend reversal. This will be a moment of reckoning for the index. Clearing this hurdle would pave the way for an upward move towards the resistance marked with 78.6% retracement in the 15,750 pts area and possibility to fresh all-time highs later on. On the other hand, failure to break above 61.8% retracement may hint that index is about to paint another leg lower in the current downtrend.

Company News

According to data from the European Automobile Manufacturers Association, new car registrations in 27 member countries of the European Union dropped by 23.1% YoY in September.

• Sales of Volkswagen (VOW1.DE) dropped 29.7% YoY, to 207,428 units

• Sales of BMW (BMW.DE) dropped 24.4% YoY, to 68,420 units

• Sales of Daimler (DAI.DE) dropped 48.1% YoY, to 45,811 units

Hugo Boss (BOSS.DE) released preliminary Q3 results yesterday after the close of the trading session in Germany. German luxury fashion company reported preliminary sales of €755 million (exp. €703.5 million) and EBIT of €85 million (exp. €67.7 million). Following the release of flash results, company boosted its full-year forecasts. Hugo Boss now expects full-year EBIT to reach €175-200 million, up from a previous guidance of €125-175 million. Revenue, assuming constant FX rates, is expected to grow 40%, up from 30-35% expected earlier.

Analysts' actions

• Lufthansa (LHA.DE) upgraded to "buy" at Deutsche Bank. Price target set at €7.30

• Lufthansa (LHA.DE) upgraded to "hold" at Stifel. Price target set at €6.00

• Siemens (SIE.DE) rated "sell" at Barclays. Price target set at €125.00

• BASF (BAS.DE) downgraded to "hold" at Societe Generale. Price target set at €70.00

• Wacker Chemie (WCH.DE) downgraded to "sell" at Societe Generale. Price target set at €145.00

After a period of struggle near the €53 resistance zone, share price of Hugo Boss (BOSS.DE) finally managed to break above. Stock launched today's trading with a large bullish price gap and continued to gain until upward move was halted at the 127.2% exterior retracement of 2020 pandemic drop (€54.80). However, staying above the €53 resistance can be seen as a bullish sign. Source: xStation5