Daimler - BUY

Current Level: EUR 26.6 Observations on the weekly chart: Daimler is trading in a down trend. However, it is currently at a long term support area and could have a short bounce from this level.

Observations on the Ichimoku Cloud: The stock is trading below the cloud. Both the short term indicator and the long term indicators show that the stock is in a downtrend. It is possible that the stock may pull back to the cloud after the sharp decline in prices in the last one month.

Observations on the daily chart: The stock is trading below its 18 day and 50 day moving averages, which will be the resistance levels for the stock in the event of a bounce in prices from the current levels.

Observations on the momentum oscillator: The momentum oscillator is trading well below the 100 level and is in line with the movement of the stock price. This confirms the down trend of the stock.

Observations on RSI and Stochastic Oscillators: Both oscillators are in oversold territory indicating that the selling on the stock could be overdone.

Summary: The stock has not recovered from the selling pressure since 2018. Every rally has been sold into and the stock has consistently made lower lows except for a couple of months in 2019. The charts indicate that the down trend is still in effect. The oscillators indicate that the stock is currently oversold. Since the stock is trading at a long term support area, it is likely to see some buying interest which could result in a rally.

It is possible that the trend may reverse suddenly, strict stop-losses should be maintained.

Resistance levels for Daimler: 28.4 (+6% from current level), 30 (+12% from current level) 32.9 (+23% from current level)

Support Levels for Daimler: 24 (-9% from current level), 18.5 (-30% from current level)

Trade Idea:

Scenario: An Investor is considering entering the markets at this time (The funds allocated to the trade represents only a small portion of the overall portfolio / net worth).

Position: BUY Entry Level: 26.5 to 25 Target: 30 (+12% from current level), 32.5 (22% from current level). Stop Loss: 24

At an EPS of 3.7 per share, the stock has a PE ratio of 7.5 at the current price. At a dividend of 0.90 per share, the dividend yield on the stock is 3.3%. The stock is undervalued.