The Volkswagen stock, which is listed on the DAX, has picked up considerably once more in the last few weeks. Several investors are already lying in wait for entry opportunities, and the first headlines with recommendations to buy are now slowly accumulating on the web. Why is the diesel crisis still heavily impacting the automotive group, and why is it still a thorn in the side of investors? Find out in our technical analysis. For when it comes to the charts, in the last few months, the prices have not been developing rosily at all.
We are in a downward trend
In the daily chart, a clear downward trend can be seen in the mid-term range. From a chart-related point of view, there is absolutely nothing long here at the moment. The price increases of the last few weeks resulted in a correction down to the 200 SMA line, and are making short entries more and more interesting. The potential is increasing with the extension of this correction, which, from the size relation, also matches the last corrections in June and April.
Due to the increased volume of the current correction, however, we should wait for a clear signal. A reversal candle in the day is one scenario, but for trend sizes such as these, it would therefore have to be significantly bigger than this. This is why a clear trend formation in the subordinate hourly chart would be characterized by more security, and in our opinion, would also be the preferred scenario.
As long as the 148 euro marker holds, the trend remains downwards. Nonetheless: if the prices go above this with pressure, a stop trigger may occur – bears are kicked out of the market, stops are triggered and a rapid price increase in the direction of 157 euros may occur.
Wait for a clear trend reversal in the hourly chart
When we take a look at the trend in the hourly chart, we see that in the subordinate timeframe, we are still pointing downwards. This trend has to turn soon – we should definitely wait for a clear trend reversal in any case. An entry would take place either as soon as the first downward trend formation near the SMA 200 line at 141 euros, or not until the next establishing breakthrough, thus providing more security. There is plenty of space downwards to wait for more signals. The stop placement occurs at the last high of the hourly trend respectively – classic according to trend trading.
First partial sales for profit-taking should occur at 129 euros at the latest – better yet, a little above at 130-131 euros. In this zone, the prices are located at an important decision zone; where other market participants are now entering, we want to be taking our first profits already.
Before making an entry, one should take the news into consideration. In addition, one should also observe the overall market as well as the actions of the central banks. One should definitely wait for the effects of the FED central bank meeting this week. Volkswagen has announced the release of its earnings for the 27th October.
Trading parameters
Entry: depending on the formation of the hourly trend, between 139 – 146 euros
Stop: depending on the formation of the hourly trend, above the last high
Targets: 1st target zone at 128 – 131 euros, and 2nd target zone at 125 euros
Disclosure of possible conflicts of interest: at the time of publishing this analysis, the author is not invested in the securities or underlyings discussed. Exchange transactions are associated with significant risks. Those who trade on the financial and commodity markets must familiarize themselves with these risks. Possible analyses, techniques and methods presented here are not an invitation to trade on the financial and commodity markets. They serve only for illustration, further education, and information purposes, and do not constitute investment advice or personal recommendations in any way. They are intended only to facilitate the customer’s investment decision, and do not replace the advice of an investor
We are in a downward trend
In the daily chart, a clear downward trend can be seen in the mid-term range. From a chart-related point of view, there is absolutely nothing long here at the moment. The price increases of the last few weeks resulted in a correction down to the 200 SMA line, and are making short entries more and more interesting. The potential is increasing with the extension of this correction, which, from the size relation, also matches the last corrections in June and April.
Due to the increased volume of the current correction, however, we should wait for a clear signal. A reversal candle in the day is one scenario, but for trend sizes such as these, it would therefore have to be significantly bigger than this. This is why a clear trend formation in the subordinate hourly chart would be characterized by more security, and in our opinion, would also be the preferred scenario.
As long as the 148 euro marker holds, the trend remains downwards. Nonetheless: if the prices go above this with pressure, a stop trigger may occur – bears are kicked out of the market, stops are triggered and a rapid price increase in the direction of 157 euros may occur.
Wait for a clear trend reversal in the hourly chart
When we take a look at the trend in the hourly chart, we see that in the subordinate timeframe, we are still pointing downwards. This trend has to turn soon – we should definitely wait for a clear trend reversal in any case. An entry would take place either as soon as the first downward trend formation near the SMA 200 line at 141 euros, or not until the next establishing breakthrough, thus providing more security. There is plenty of space downwards to wait for more signals. The stop placement occurs at the last high of the hourly trend respectively – classic according to trend trading.
First partial sales for profit-taking should occur at 129 euros at the latest – better yet, a little above at 130-131 euros. In this zone, the prices are located at an important decision zone; where other market participants are now entering, we want to be taking our first profits already.
Before making an entry, one should take the news into consideration. In addition, one should also observe the overall market as well as the actions of the central banks. One should definitely wait for the effects of the FED central bank meeting this week. Volkswagen has announced the release of its earnings for the 27th October.
Trading parameters
Entry: depending on the formation of the hourly trend, between 139 – 146 euros
Stop: depending on the formation of the hourly trend, above the last high
Targets: 1st target zone at 128 – 131 euros, and 2nd target zone at 125 euros
Disclosure of possible conflicts of interest: at the time of publishing this analysis, the author is not invested in the securities or underlyings discussed. Exchange transactions are associated with significant risks. Those who trade on the financial and commodity markets must familiarize themselves with these risks. Possible analyses, techniques and methods presented here are not an invitation to trade on the financial and commodity markets. They serve only for illustration, further education, and information purposes, and do not constitute investment advice or personal recommendations in any way. They are intended only to facilitate the customer’s investment decision, and do not replace the advice of an investor
