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Moving Average Analysis of FEZ’s Auto Manufacturing Industry

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Auto manufacturing industry

On Tuesday, January 5, 2016, the auto manufacturing industry provided the highest negative return of 1.5% to the performance of the SPDR Euro STOXX 50 ETF (FEZ). Auto manufacturing stocks such as Volkswagen (VLKAY), BMW, and Daimler (DDAIF) fell 2.8%, 1.2%, and 0.53%, respectively, that day.

All of Germany’s (EWG) major auto manufacturing stocks fell that day after the United States filed a civil lawsuit against Volkswagen for violating environmental laws.

Continuing scandals will most likely harm Volkswagen’s profit margins. Goldman Sachs (GS) has given the company a “sell” recommendation.

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Moving averages

  • Volkswagen is currently trading at 5% and 6% below its 100-day and 20-day moving averages, respectively. It’s trading 5% above its 50-day moving average, which is a strong support point for the stock.
  • Daimler is trading 1% below its 100-day moving average. It’s trading 6% and 5% below its 50-day and 20-day moving averages, respectively.
  • BMW is trading 3% above its 100-day moving average. However, it’s trading 4% and 5% above its 50-day and 20-day moving averages, respectively. Its 50-day moving average is a strong resistance point for the stock.

Analyst estimates

Analyst estimates suggest an upside of 7%, 10%, and 27% for Volkswagen, BMW, and Daimler, respectively, over the next 12-month period from the current levels as of January 5, 2016.

To learn more, read FEZ and EWJ Take a Huge Fall after 7% Crash of Chinese Market.

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