Technical Analsys
Lower sales forecast bearish for Infineon price
Lower sales forecast bearish for Infineon price
Infineon Technologies (DE:IFXGn) stock led technology sector rout after news the company had stopped shipments to Huawei. Will the Infineon price continue declining?
infineon Technologies AG stock slump led euro-zone technology retreat on Monday after news infineon had suspended shipments to Huawei following US ban on exports to China’s telecom giant. Couple of weeks before that company’s stock fell after Infineon reported no growth in revenue in the second quarter, though forecast a 5% rise in revenue to 8 billion euros ($8.96 billion) in the year to September 30. Chips used in cars account for more than two-fifths of Infineon's top selling output, and the company cited weaker Chinese demand for stagnant sales. It forecast “lower than normal seasonal revenue increase int the second half of the 2019 fiscal year”. Lower revenue forecast is bearish for Infineon stock price.
On the daily timeframe the D-IFX: D1 is below the 200-day moving average MA(200) which is falling. The price has breached below the support line. These are bearish.
-
The Parabolic indicator gives a sell signal.
-
The Donchian channel indicates downtrend: it is tilted lower.
-
The MACD indicator gives a bearish signal: it is below the signal line and the gap is widening.
-
The RSI oscillator is rising after failing to breach into the oversold zone.
We believe the bearish momentum will continue after the price breaches below the lower boundary of Donchian channel at 16.87. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the fractal high at 18.41. After placing the order, the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop loss level (18.41) without reaching the order (16.87), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.
Technical Analysis Summary
- Position Sell
- Sell stop Below 16.87
- Stop loss Above 18.41
Market Overview
US stocks end lower after soft retailer earnings
Dollar strengthened after Fed minutes
US stock market stepped back on Wednesday with weak retailer reports providing little support. The S&P 500 slid 0.3% to 2856.27. The Dow Jones industrial average slipped 0.4% to 25776.61. Nasdaq composite index fell 0.5% to 7750.84. The dollar strengthening continued as minutes of Federal Reserve last meeting revealed officials felt there were no data supporting a rate cut need currently: the live dollar index data show the ICE (NYSE:ICE) US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, added 0.1% to 98.094 and is higher currently. Futures on US stock indexes point to lower openings today.
DAX 30 outperforms European indexes
European stocks slipped on Wednesday with Berxit and global trade prospect uncertainty undermining market sentiment . Both the EUR/USD and GBP/USD accelerated their slide and are lower currently. The Stoxx Europe 600 slipped 0.1% led by bank shares. Germany’s DAX 30 however added 0.2% to 12168.74. France’s CAC 40 slid 0.1% while UK’s FTSE 100 edged up 0.1% to 7334.19 amid reports of rising pressure on UK Prime Minister Theresa May to resign after lawmakers in her own party rejected her compromise deal on exiting the EU.
Hang Seng leads Asian indexes losses
Asian stock indices are mostly falling today after news overnight the United States was considering curbs on Chinese video surveillance firms including Hikvision. Nikkei turned 0.6% lower to 21151.14 as yen climb against the dollar continued despite the Markit flash purchasing managers’ index’s decline to 49.6 in May from 50.2 in the previous month indicated manufacturing contracted in May. Chinese stocks are falling: the Shanghai Composite Index is down 1.4% and Hong Kong’s Hang Seng Index is 1.6% lower. Australia’s All Ordinaries Index lost 0.3% despte Australian dollar continued sliding against the greenback at a previous session’s pace.
Brent falls on US crude inventories build
Brent futures prices are extending losses today. Prices fell yesterday after the report US crude stockpiles rose 4.7 million barrels while gasoline stocks increased by 3.7 million last week. July Brent crude lost 1.7% to $70.99 a barrel on Wednesday.