Diageo, Phillips and Volkswagen are on a technical climb – Commerzbank

For technical new investments in the European and German stock markets, which have already followed international price movements at a comparable pace, this means only selected blue chips that have no overbought medium-term structures should still be considered. Stocks to be emphasised as technical (additional) buys are British beverages producer Diageo from the Stoxx 50 as well as Dutch health technology group Philips and German automobile group VW (with its preference shares) from the Euro Stoxx 50, economists at Commerzbank brief.  

Key quotes

“For three months, the stock has now found itself in a sideways consolidation below 3090. This consolidation has so far been trend-confirming to the upside. British beverages group Diageo, which offers a (gross) annual dividend yield of 2.3%, the area around 3300 suggests itself as the next interim target from the medium-term technical perspective, and so a technical dual strategy is recommendable. Initially, a starting position is set up at current price levels. Should Diageo start moving with another (investment) buy signal (which occurs at price levels above 3110), we would add to this position. The strategic stop for a Diageo position should be placed at 2700.”

“At present, Dutch Philips group is working on a lasting move beyond the resistance zone from 45.0 to 46.0 and the establishment of an investment buy signal. The area from 52.0 to 53.0 suggests itself as the first medium-term interim target. From a long-term technical perspective, it should be no surprise if Philips approached its all-time highs again. As a consequence, Philips remains a defensive technical (additional) buy, but any Philips position should come with a strategic stop at 39.0.”

“In recent weeks, Volkswagen started moving upward again with a new investment buy signal (jump over the zone from 155.0 to 158.0). This suggests its medium-term technical interim target is to enter the multi-year staggered resistance zone between 180.0 and 192.5. VW pref. is a technical (additional) buy, but any VW pref. position should come with a strategic stop at 120.0.”