HELLA: Joint venture at Jianxing Zhejiang, 700km away from Wuhan
Sideways movement presents low volume and in the past two years (2018 and 2019), HLE has entered July in a bearish mood. From the upside, the price is at 0.5 fibonacci retracement level although the head formed on June 8 surpassed 0.618 for a bit. From the down side (blue fib retracement), the price is at 0.236 level. A sharp fall beyond 0.382 level in the next 2 weeks would mean a bullish trend reversal.
Causes for this to happen:
Due to covid19 tensions and also US-EU trade war we may see a short-term (6 months) decay predicted by the Head and Shoulders figure finished on June 22. Deutsche Bank sticks neutral on HLE's target price at 30€ although JP Morgan offers buy rating until 41€. In addition, HLE seems not to be scared about a new virus outbreak in China and has established close relationships with Jianxing, in Zhejiang province, shaping a joint venture with Minth to produce radomes and illuminated logos. In Zhejiang (currently +30ºC) there were 1,269 covid cases, 1.52% of the total Chinese Mainland cases. Zhejiang is 1000 km away from epicenter Wuhan. If news about covid19 evolving in China continue to happen, HLE will be seriously damaged by it.
Causes for this to happen:
Due to covid19 tensions and also US-EU trade war we may see a short-term (6 months) decay predicted by the Head and Shoulders figure finished on June 22. Deutsche Bank sticks neutral on HLE's target price at 30€ although JP Morgan offers buy rating until 41€. In addition, HLE seems not to be scared about a new virus outbreak in China and has established close relationships with Jianxing, in Zhejiang province, shaping a joint venture with Minth to produce radomes and illuminated logos. In Zhejiang (currently +30ºC) there were 1,269 covid cases, 1.52% of the total Chinese Mainland cases. Zhejiang is 1000 km away from epicenter Wuhan. If news about covid19 evolving in China continue to happen, HLE will be seriously damaged by it.
Comment:
H&S figure clearly cancelled. However, bullish momentum losing strength from technical point of view. From news, Daimler reported good profit. All car companies seem to be recovering their stock prices, that is why HELLA is being dragged upwards. August 13, 2020 next earnings day.