Medium term
Trade view / 14 October 2015 at 16:01 GMT

Daimler could follow the generally weak market

CEO / Att Trading
Austria
Instrument: DAI:xetr
Price target:
Market price:
Background

Daimler AG (DAI) is a leading international car producer that builds passenger cars, commercial vehicles and offers financial services. The company sells its vehicles and services in nearly all countries around the globe.

The stock made an uptrend over the last 5 years, but is currently making a strong correction which is a downtrend on the daily chart. This results in an opportunity for a short trade.

DAI weekly chart – opportunity for a short
dai
Source: ATT Trading. Create your own charts with SaxoTrader click here to learn more

Management and risk description

We can see our downtrend very clear on the daily chart and mid-term traders will now get the chance to find an entry. This downtrend already made a correction of around 75% which results in interesting targets around €63 and €57.

DAI daily chart
dai2
Source: ATT Trading

We can also see an resistance zone which consists of the SMA 200 (red line) and the EMA 100 (blue line). Before this zone is not significantly broken the downtrend is intact. Should the stock, however, significantly break through the price level of around €76.70, our short-idea would be over. The decreasing volume in the correction (see Fig.2, black arrow in volume) is another indication that additionally favours a short position.

Parameters

Entry: €71

Stop: €74

Target: €63, €57

Time horizon: medium-term

— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more

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