In Europe and Japan car makers are leading the advance on the stock market today. A new concern for automakers is Car Sharing which has taken off in cities like Moscow. BMW and Daimler are joining forces to combat ride hailing software and car sharing. DMW’s DriveNow unit which is their version of Car Sharing together with Daimler operate a total of 20,000 vehicles in 20 large international cities. Each company owns 50% in the new venture, but they remain rivals in their core business.
The reason we are presenting this trade is that global macro indicators are on the rise. A change in sentiment is approaching and BMW is a cyclical stock. Meaning it fluctuates in very wide price moves and we have currently come up against a very strong level of support. Last time these levels were in play was 2016, and the reversal from these levels was quick and strong.
BMW is at the bottom of a weeklong descent due to difficulties around Brexit and the slowing economy in Germany. We are looking for something called the “fade”. Markets move in wave formations and we expect a correction up to 72.00. For this quick long trade we put a stop loss order around 68.50 and enter the market at 69.80-70.00. The average true range of the stock is currently around 1.5€. The Fibonacci level of 38.2% is too far away, currently if we reach 72.00 this week, we can expect a retest of the 23.6% Fibonacci level at 73.00. This is not a buy and hold strategy, move your stop loss up after price breaks 71.00.
The reason we are presenting this trade is that global macro indicators are on the rise. A change in sentiment is approaching and BMW is a cyclical stock. Meaning it fluctuates in very wide price moves and we have currently come up against a very strong level of support. Last time these levels were in play was 2016, and the reversal from these levels was quick and strong.
BMW is at the bottom of a weeklong descent due to difficulties around Brexit and the slowing economy in Germany. We are looking for something called the “fade”. Markets move in wave formations and we expect a correction up to 72.00. For this quick long trade we put a stop loss order around 68.50 and enter the market at 69.80-70.00. The average true range of the stock is currently around 1.5€. The Fibonacci level of 38.2% is too far away, currently if we reach 72.00 this week, we can expect a retest of the 23.6% Fibonacci level at 73.00. This is not a buy and hold strategy, move your stop loss up after price breaks 71.00.
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