Bayer stock: 200 EMA in focus – UBS column

Review: The shares of the DAX heavyweight Bayer have been in a strong countermovement since the Coronacrash low of March 44 at CHF 44.85. The gaps formed in the crash were already closed at EUR 55.90 and EUR 63.50. However, since April 23, Bayer shares have been swinging sideways, largely squeezed between the 50 EMA at EUR 59.57 on the bottom and the 200 EMA at CHF 65.04 on the top. The bulls have not yet achieved a breakthrough above the 200 EMA. On the contrary, there were two lower historical highs at EUR 64.30 on April 28th and at EUR 62.90 on May 26th. So a double top could form directly at the 200 EMA and turn the shares back down. As long as there is no breakthrough over the 200 EMA, the bulls cannot breathe a sigh of relief.

Outlook: To date, Bayer shares have only been in a strong countermovement following the corona virus crash. The stocks have been in a downward trend for years, as the 5-year chart shows. So it remains questionable whether the shares can achieve a sustainable breakthrough above the 200 EMA and thus significantly brighten the situation.

The short scenarios: The stocks cannot rise above the 200 EMA and form the suspected double top. As a result, a return to the 50 EMA would be expected, including the low of May 14 at EUR 55.37. If it goes deeper, the massive support of EUR 51.70 should put an end to the bears. A breakdown would, on the other hand, put the bear’s low again at EUR 44.85 and could also fall below the overall downward trend.

The long scenarios: The stocks can break out above the 200 EMA and thus significantly brighten their long-term situation. The next target would be the resistance at EUR 70.00. As long as the 200 EMA can also be defended in the event of declines, long-term price increases would be expected.

Disclaimer: The text is a column of the UBS. The content of the column is not the responsibility of 4investors and therefore does not necessarily have to agree with the opinion of the 4investors editorial team. Any liability and claims are therefore expressly excluded by 4investors!

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