Medium term
Trade view / 22 July 2015 at 14:18 GMT

BASF – a German short candidate

CEO / Att Trading
Instrument: BAS:xetr
Price target:
Market price:

BASF SE is a leading global chemical company. The company, headquartered in Ludwigshafen in Germany, was founded in 1865. It has one of the broadest product portfolios in the field of industrial chemicals. It also serves the automotive, electrical, chemical and construction industries as well as the agriculture, pharmaceutical and oil and gas industry. BASF manufactures primary and intermediate products such as high-value chemicals, engineering plastics, performance products, oils and gases.

We will now analyse the stock from a technical point of view.

In figure 1 we see a long-lasting uptrend, which started in the year 2010 at €40.74 and reached this year´s high at €97.22 . Therefore, the stock increased over 238% over the last 5 years.
If we look at the current situation we see a strong correction which is a downtrend on the daily chart.

BASF Weekly Chart – that upwards trendline looks set to take a turn
Source: ATT Trading.  Create your own charts with Saxo Trader click here to learn more

Management and risk description

If we look at the current situation on the daily chart we can clearly see that this downtrend has made a wide correction and because of this mid-term traders will now have the chance for a short trade.

This trade has very lucrative targets around €76 and €68 and we should now look for a minor trend to get an entry into this trade.

BASF Daily Chart
Source: ATT Trading

We get support by the volume because it goes up when the stock is decreasing, which is always a good indicator to look for a short trade.

If the stock would go above the area around €85  this short scenario would be over.
Before any trade it is always necessary to look for upcoming earnings releases.


Entry: €84

Stop: €86.50

Target: €75, €69

Time horizon: medium-term

— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more


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