Market Analysis

The Wirecard story continues

German payment service provider, Wirecard, and the Financial Times have had an eventful past. The financial newspaper has repeatedly reported on financial irregularities at the German blue-chip company. There was the accusation that Wirecard had manipulated balance sheets to obtain licenses in Hong Kong.

In the past, these accusations led to massive short selling of Wirecard shares by investors. This climaxed with the German regulatory authority BaFin banning short selling of Wirecard stocks. This ban was lifted again on April 18, 2019.

At the beginning of this week, financial analysis by a German bank has caused another furor. The analysts raised the Wirecard share price from “hold” to “buy”.

However, a glance at the chart could somewhat dampen the euphoria, at least for the time being.

In November 2018, the share reached a temporary high of just under €200. From there, it dropped substantially to the €86 zone before working its way back, with several attempts, to the €143 range.

The threshold of €143 should be decisive for further development. If the bulls manage to raise the market further, there could be resistance around €155. If the bulls can then keep the market going, another structural resistance zone could emerge from a band of January highs at €170 and the structural area at €173.

However, if the bulls are too weak to lift the market sustainably above €143, then there could be support in the €129 range. If the market falls through here and the gap at €123 cannot stop the market, further support in the €112 area could result.

The MACD oscillator is in positive territory. The MACD line and the trigger line are almost parallel with a small gap. Although the histogram is in a positive area, it reflects the trend-seeking phase of the market.


WDI.GE - daily chart. Source: ActivTrader

WDI.GE Daily Chart | Source: ActivTrader


Written by Daniel Schuetz, External Analyst, ActivTrades

*The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication. All information has been prepared by ActivTrades PLC (“AT”). The information does not contain a record of AT’s prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of futures performance. AT provides an execution-only service. Consequently, any person acting on the information provided.