Wednesday, August 12, 2020

Wirecard shares are facing new turmoil

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A look at the Dax chart shows: The Dax has moved little overall since the beginning of June, even if there are 1300 points between the monthly high (12,913 points) and the June low (11,597 points). For a week now, the Dax has been more or less on the spot.

Nevertheless, investor sentiment has changed. According to behavioral economist Joachim Goldberg, who is evaluating a survey by the Frankfurt Stock Exchange, pessimism among investors has returned. According to the sentiment analysis, this is a classic contraindicator because then many investors have already sold and less selling pressure weighs on the prices.

Accordingly, the starting position for the Dax is rather encouraging in the coming trading days. Because, according to Goldberg, mood swings were caused by “pessimism masked would-be optimists”, quasi “Bulls in Bear Fur “. In his opinion, it is an attempt to be part of a continuation of the stock rally with not too bad cost prices.

In addition, many investors would have had bad experiences speculating on falling prices in the first half of the year. For this reason, Goldberg expects to buy again at a Dax level of below 12,000 points, which should support the leading index in the event of a renewed sell-off wave.

And what happens if the DAX continues to rise? “The biggest risk for these actors is that the party takes place without them,” says the behavioral economist.

No trading day without news about the Wirecard share, which experienced a quiet trade with a minus of 16.2 percent compared to the days. The volume was also rather quiet with 14.2 million papers, previously more than 40 million copies changed hands every day.

But that can change quickly. A number of hedge funds have increased their short position since the company’s insolvency proceedings began, according to London-based analysis platform Ortex. The short sale rate has fallen by more than 40 percent in the past few days because many hedge funds have cashed.

Nevertheless, according to Ortex, more than 10 million papers are still “shorted”. The last short sale entry in the Federal Gazette is from Tuesday of this week, Susquehanna has increased the quota to 1.12 percent of the freely tradable shares.

According to the official data of the Federal Gazette, the short sale rate is currently 7.98 percent of all freely tradable Wirecard papers, a total of 9.9 million pieces. However, only a quota of at least 0.5 percent is published there.

Peter Hillerberg, co-founder of Ortex Analytics, says: “Our data shows that short sellers continue to see an opportunity at Wirecard. For anyone who thought the Wirecard saga was over, it is clear that short sales have not yet been completed ”.

Short sellers speculate on falling prices by lending and selling shares in a company, for example in mutual funds. In order to return these shares after the deadline, you have to buy them again beforehand – of course at a lower price if possible.

The behavior of the hedge funds is expected in the coming days for new turmoil in trading with the share of the online payment service provider cause. At the opening, the paper was 35 percent in the red, currently stabilizing at 25 percent in the red.

The overseas guidelines are encouraging: Advances in the development of a coronavirus vaccine gave encouragement to US investors on Wednesday. On Wall Street, the technology-heavy Nasdaq advanced 1.0 percent to 10,154 points, while the broad S&P 500 rose 0.5 percent to 3,115 points. The US futures contracts do not signal any major changes to Thursday’s start of trading.

The Asian stock exchanges did not follow a uniform direction on Wednesday. While economic data from Japan frightened investors, investors in China found new hope for an economic recovery.

Dates today

The U.S. government announces the June unemployment rate at 2:30 p.m. Central European Time. Given the nationwide easing of containment measures in the corona pandemic, analysts expect a further decline to around 12.5 percent.

In May the rate was 13.3 percent. A rate of 14.7 percent was recorded in April – a sharp increase of ten percentage points compared to March. The numbers of the private employment agency ADP on Wednesday had disappointed. Instead of the three million jobs hoped for, just under 2.4 million new jobs were created in June.

Look at the individual values

Bitter: The IT leasing company reported a drop in new business of around 45 percent to EUR 402.3 million in the second quarter due to the corona crisis. After the clearly limited development at the beginning of the quarter, business picked up in June. However, it is not foreseeable whether this is a continuing trend, said CEO Antje Leminsky. The share rises by 2.9 percent.

Look at other asset classes

The gold price just missed the $ 1,800 mark yesterday afternoon at around $ 10. This was followed by a consolidation that continues on Thursday. The yellow precious metal is currently traded at $ 1786 per troy ounce, down 0.1 percent from the previous day.

The chart technique also shows how important the $ 1800 mark is. In late 2011 and in 2012, for example, the gold price had four key highs in the $ 1,800 range. Technical analysts then speak of resistance. The more often a value fails at such a resistance, the greater the importance. Therefore, this level is of much greater importance than the all-time high of $ 1,920 from 2011.

“If the sprint is above the 1,800 mark, even new record levels are increasingly likely,” say the HSBC analysts.

What the chart technique says

Based on the data since 1988, the trading month of July statistically saw the fifth best monthly performance in the course of the year, with an average price increase of 1.57 percent, the technical analysts at the Düsseldorf-based bank HSBC calculated. The probability of rising DAX prices in July is also constructive at 59 percent.

As long as the stock barometer is above the combination of the steep recovery trend since the end of March (currently at 12,225 points) and the 200-day line (currently at 12,156 points), the starting position is favorable to capitalize on the seasonal tailwind described the HSBC analysts yesterday Wednesday.

The June chart also shows the range that could be important for the summer: with 12,913 points on the top there is an important hurdle that must be overcome for the rally to continue. On the underside is the important support for the coming weeks with the monthly low of 11,597 points.

Here is the page with the Dax course, here are the current tops & flops in the Dax. Current short sales by investors can be found in our short sales database.

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