Bayer AG in up trend after breakout - how to trade
Market broke out of triangle at the end of July and confirmed the current up trend after closing above down trend channel at the beginning of August.
We have seen two bullish indicators on daily chart.
1. 50 day moving average (yellow line) crossed the 100 day moving average (blue line) upwards which is bullish indicator, expect fast up movement above 70 € if the yellow 50 day moving average (red line) should cross the red 200 day moving average line upwards within next days
2. Price on daily chart closed above the down trend line which is bullish indicator as well but market need to break another down trend channel line before turning bullish finally.
How to trade:
- if you hold already long positions: wait for clear sell signal at 70 € resistance. should market not break above the trend line within 3-4 days than sell otherwise hold until drawn long term take profit area which will be reached 100 % after breakout from last resistance channel
- if you want to open a long position: wait for a correction movement to 200 day moving average at 62 € which is first strong support. Several daily candle close above it implement further up movement
-don´t short this stock currently because the risk is higher than the reward chance, remember that the all time high was at 144 € which is more than 50 % away from current price area.
Fundamental view:
Bayer is still a healthy company which will win most of the open us court processes, after that we can expect again prices above 100 €
Yesterday the Bayer AG selled its pharmaceuticals business for pets and livestock. It goes for 7. 6 billion dollars (6. 85 billion euros) to the US company Elanco, as the Leverkusen DAX company announced on Tuesday. The sale marks a step forward in Bayer's intention to sell businesses and reduce debt following the expensive acquisition of the seed company Monsanto. There has already been speculation about such a deal.
Of this sum, 5. 3 billion dollars are to be paid in cash, Bayer reported. The remaining 2. 3 billion is paid in shares by Elanco. The Leverkusen-based company intends to sell its stake in Elanco in due course. The transaction volume corresponds to 18. 8 times the underlying earnings before interest, taxes, depreciation and amortization (EBITDA) of the Bayer Animal Health business in the twelve months to June. The deal is expected to close in mid-2020, subject to the approval of competition authorities.
Elanco, once part of US pharma giant Eli Lilly, is an industry leader with 5600 employees and $3. 1 billion in sales. The Bayer deal was said to create the global number two in animal health. The US group Zoetis is the market leader.
Bayer sells flea, tick and deworming products as well as collars to ward off vermin in veterinary medicine. The Group offers farmers means to strengthen the defences of farm animals, combat pests in the stables and improve hygiene. Bayer had described the outlook for the division as good.
But veterinary medicine is also Bayer's smallest division, with its subsidiary based in Monheim and production facilities in Kiel and Shawnee (USA) employing around 3,700 people, or a good three percent of Bayer's workforce. Measured in terms of revenue of 1. 6 billion euros, the division is also negligible: Bayer had sales of almost 40 billion in 2018.
We have seen two bullish indicators on daily chart.
1. 50 day moving average (yellow line) crossed the 100 day moving average (blue line) upwards which is bullish indicator, expect fast up movement above 70 € if the yellow 50 day moving average (red line) should cross the red 200 day moving average line upwards within next days
2. Price on daily chart closed above the down trend line which is bullish indicator as well but market need to break another down trend channel line before turning bullish finally.
How to trade:
- if you hold already long positions: wait for clear sell signal at 70 € resistance. should market not break above the trend line within 3-4 days than sell otherwise hold until drawn long term take profit area which will be reached 100 % after breakout from last resistance channel
- if you want to open a long position: wait for a correction movement to 200 day moving average at 62 € which is first strong support. Several daily candle close above it implement further up movement
-don´t short this stock currently because the risk is higher than the reward chance, remember that the all time high was at 144 € which is more than 50 % away from current price area.
Fundamental view:
Bayer is still a healthy company which will win most of the open us court processes, after that we can expect again prices above 100 €
Yesterday the Bayer AG selled its pharmaceuticals business for pets and livestock. It goes for 7. 6 billion dollars (6. 85 billion euros) to the US company Elanco, as the Leverkusen DAX company announced on Tuesday. The sale marks a step forward in Bayer's intention to sell businesses and reduce debt following the expensive acquisition of the seed company Monsanto. There has already been speculation about such a deal.
Of this sum, 5. 3 billion dollars are to be paid in cash, Bayer reported. The remaining 2. 3 billion is paid in shares by Elanco. The Leverkusen-based company intends to sell its stake in Elanco in due course. The transaction volume corresponds to 18. 8 times the underlying earnings before interest, taxes, depreciation and amortization (EBITDA) of the Bayer Animal Health business in the twelve months to June. The deal is expected to close in mid-2020, subject to the approval of competition authorities.
Elanco, once part of US pharma giant Eli Lilly, is an industry leader with 5600 employees and $3. 1 billion in sales. The Bayer deal was said to create the global number two in animal health. The US group Zoetis is the market leader.
Bayer sells flea, tick and deworming products as well as collars to ward off vermin in veterinary medicine. The Group offers farmers means to strengthen the defences of farm animals, combat pests in the stables and improve hygiene. Bayer had described the outlook for the division as good.
But veterinary medicine is also Bayer's smallest division, with its subsidiary based in Monheim and production facilities in Kiel and Shawnee (USA) employing around 3,700 people, or a good three percent of Bayer's workforce. Measured in terms of revenue of 1. 6 billion euros, the division is also negligible: Bayer had sales of almost 40 billion in 2018.
Comment:
market price is on track - expect more up movement until end of the year
The analyses provided are for informational purposes only and do not constitute financial advice or recommendations to buy or sell anything. The information presented is based on personal research and interpretation.
