Current trend

The leading index of the Frankfurt Stock Exchange, the DAX 40, is adjusting at 18334.0 amid an ongoing downward correction in the domestic bond market.

Merck & Company Inc. and Covestro AG reports are scheduled for today. According to forecasts, the quarterly revenue of the pharmaceutical company Merck & Company Inc. will amount to 14.61 billion euros, up from 13.69 billion euros recorded a year earlier, and earnings per share (EPS) will increase to 1.99 euros from 1.93 euros. In turn, the manufacturer of polyurethane and polycarbonate raw materials Covestro AG expects revenue growth to 3.73 billion euros from 3.51 billion euros in the previous quarter, as well as earnings per share (EPS) at 0.134 euros after a loss of -0.190 euros.

Yesterday, the financial results of the Heineken NV brewing corporation were published: revenue amounted to 7.97 billion euros, falling short of the forecast of 8.24 billion euros and 8.14 billion euros shown a year earlier.

The domestic bond market also continues to decline: the yield rate on 10-year German bonds fell to 2.360% from 2.429%, and on 20-year bonds — to 2.587% from 2.655%.

The growth leaders in the index are Merck KGaA ( 3.13%), Infineon Technologies AG ( 2.25%), Qiagen NV ( 2.04%), RWE AG ( 1.34%).

Among the leaders of the decline are Covestro AG (-1.93%), Mercedes Benz Group AG (-1.78%), BASF SE (-1.69%).

Support and resistance

On the D1 chart, the price is trading in a corrective trend, declining again and approaching the support line of the "head and shoulders" pattern at 18200.0.

Technical indicators are unfolding, preparing to issue a new sell signal: the fast EMAs on the Alligator indicator are already slightly below the signal line, and the AO histogram, located in the purchase zone, forms descending bars.

Support levels: 18200.0, 17700.0.

Resistance levels: 18550.0, 18950.0.

Trading tips

In the event of a reversal and decline of the asset, as well as price consolidation below the support level of 18200.0, sell positions with the target of 17700.0 can be opened. Stop-loss – 18400.0. Implementation period: 7 days and more.

In case of continued growth of the asset, as well as price consolidation above the resistance level of 18550.0, buy positions with the target of 18950.0 will be relevant. Stop-loss – 18300.0.