VOLKSWAGEN GROUP: THE COMPANY IS INVESTING 5.0 BILLION DOLLARS IN A JOINT VENTURE WITH RIVIAN AUTOMOTIVE INC.
| Scenario | |
|---|---|
| Timeframe | Weekly |
| Recommendation | SELL STOP |
| Entry Point | 100.40 |
| Take Profit | 92.50 |
| Stop Loss | 103.00 |
| Key Levels | 92.50, 100.40, 105.30, 115.10 |
| Alternative scenario | |
|---|---|
| Recommendation | BUY STOP |
| Entry Point | 105.30 |
| Take Profit | 115.10 |
| Stop Loss | 102.00 |
| Key Levels | 92.50, 100.40, 105.30, 115.10 |
Current trend
Shares of Volkswagen AG, the German automobile corporation, are adjusting around 103.30.
The concern continues to implement the cost reduction program adopted in 2023, amounting to about 10.0 billion euros, 4.0 billion euros of which are planned to be optimized in 2024. According to the results of the first half of the year, the company's operating income fell to 10.1 billion euros from 11.3 billion euros over the same period a year earlier, which was partially offset by revenue growth from 156.3 billion euros to 158.8 billion euros. The division for the sale of cars with internal combustion engines reported a net cash outflow of 100.0 million euros due to increased investments in new developments. By the end of 2024, Volkswagen AG expects revenue growth of 5.0% and operating margin of sales of 6.5–7.0%, while cash flow growth is planned at 2.5–4.5 billion euros, and 13.5–14.5% of available funds can be directed to the automotive division.
In addition, the emitter does not abandon plans to invest in the development of electric trucks: yesterday, it became known about a new round of partnership with the American company Rivian Automotive Inc., according to which Volkswagen AG will allocate 5.0 billion dollars to create a 50/50 joint venture.
Support and resistance
On the D1 chart, the asset is adjusting while forming another attempt to exit the descending channel with the boundaries of 105.00–92.00.
Technical indicators are still holding a long-term sell signal, which demonstrates a local slowdown: the fast EMAs of the Alligator indicator are below the signal line, approaching it, and the AO histogram, being in the sales zone, forms new ascending bars.
Support levels: 100.40, 92.50.
Resistance levels: 105.30, 115.10.
Trading tips
If the asset continues to decline and the price consolidates below the support level of 100.40, one can open short positions with a target of 92.50 and a stop-loss of 103.00. Implementation time: 7 days and more.
In case of continued growth of the asset, as well as price consolidation above the resistance level of 105.30, one may open long positions with a target of 115.10 and a stop=loss of 102
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