SAP has exited an uptrend and is now forming two peaks. I would not call this a double-top formation since there is no supporting evidence in the volume. However, one should be aware that the price has support around 213 (see also the 3-year volume profile). If the support holds, this is positive for the price. But if there is a breakdown with increased volume, it would be a sell signal in the medium term (1–6 months) for investors with that time horizon.
The price currently has negative momentum as it is trading below all moving averages (50, 100, 200), the Ichimoku cloud, and the RSI 21 is trending downward.
Fundamental analysts remain broadly positive on the stock. My assessment is that the valuation has been too high for some investors, prompting profit-taking. Whether the valuation — with a P/E of around 40–50 — is still considered too high remains to be seen. It should also be noted that while annual results are positive, they fluctuate significantly.
Disclaimer: I hold a position in SAP. I do not use a stop loss regarding a potential breakdown below 213, but I have set an alert. I will only consider selling if there is a breakdown with strong volume, and in that case I would look to buy back at a lower level. My overall position is long on SAP.
The price currently has negative momentum as it is trading below all moving averages (50, 100, 200), the Ichimoku cloud, and the RSI 21 is trending downward.
Fundamental analysts remain broadly positive on the stock. My assessment is that the valuation has been too high for some investors, prompting profit-taking. Whether the valuation — with a P/E of around 40–50 — is still considered too high remains to be seen. It should also be noted that while annual results are positive, they fluctuate significantly.
Disclaimer: I hold a position in SAP. I do not use a stop loss regarding a potential breakdown below 213, but I have set an alert. I will only consider selling if there is a breakdown with strong volume, and in that case I would look to buy back at a lower level. My overall position is long on SAP.
Note
Note: Always do your own research and evaluation before buying or selling stocks.Trade active
SAP has clearly entered a downtrend, with MA200 > MA100 > MA50. The stock has also broken through the support at 213 and the lower trendline. It might find its way back into the trend, but the trend remains downward until proven otherwise. SAP is also trading below a red Ichimoku cloud.
Fundamental analysts still remain predominantly positive on the stock.
I have sold my position, but I will keep an eye on the stock and buy again once the technical picture improves. I still believe in the stock in the long term.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.