Trading Opportunity Stellantis: Finally Broken to the Top | news

Do you know Stellantis? This name says nothing to many investors, but the brands that unite this stock do: Fiat Chrysler, Peugeot, Citroën, Opel, Jeep, Maserati, Lancia, Alfa Romeo. And this stock has finally broken out of its downward trend!

Stellantis was first formed in 2021 through the merger of Fiat Chrysler and PSA Group with its main brands Peugeot, Citroen and Opel. Two companies that faltered too often became one large holding company, which was to become more stable and operate as efficiently as, for example, the Mercedes-Benz group or the VW group. And so far it has worked perfectly. Only the stock is not doing as well as it could because:

Stellantis has everything a top car stock needs

The stock, which is listed in Paris’ leading index CAC40 as well as in Euro Stoxx 50, has performed significantly worse than competitors such as Mercedes-Benz since the beginning of the year. And this despite the fact that the balance sheet data are the same: Sales are falling because delivery figures are falling due to material shortages, while profits are rising because the company is able to push strong prices through. In addition, there is a terrific yield. In April, Stellantis distributed a dividend of EUR 1.04, which at the time meant a dividend of just over seven percent. And with the current valuation of the price / earnings ratio, one can only be surprised:

If analysts’ average earnings forecast were to come true, Stellantis would have a price / earnings ratio of 3.1 based on the 2022 forecast! It is cheap even for the car manufacturers’ traditionally low valuations. And it would still be cheap if earnings, which experts see falling five percent from the strong 2021 result, came 20 percent lower. What was missing is an initial spark to put bears in their place and bullish traders on the stock. And we see right now:

Finally broke out … something could be going on now

In late April and early May, the Stellantis stock tested the key support level to € 12.17, its lowest year-to-date in March … and kept that line. This caused the stock to reach a small safe distance from this line, but nothing more happened in the beginning. But after market participants waited long enough to see if the bears, the shorts sellers, would not suddenly return, the first Friday took heart in hand and grabbed … with the effect that Stellantis established in January and has clearly exceeded the downward trend line confirmed as relevant in March at the moment: This is a long trading opportunity.

Source: marketmaker pp4

In a stock market that is so volatile and characterized by uncertainty, one must of course always take into account that even a crystal clear technical chart signal can become a bull trap. But here the low valuation and the again bullish market technology can make a difference.

As a “tool” for implementing a long trade, we have selected a long knock-out certificate from the issuer Société Générale, which currently has a leverage of 2.57 with a base price / CO level of 8,481 EUR. We would put a stop loss to EUR 4.07 in the certificate, which would correspond to a level of approximately EUR 12.70 in the stock, just below the daily low on Thursday, from which this chart-to-technical release began. The WKN for this long certificate is SB7V0M.

Important chart marks:

Resistances: 15.51 euros, 16.25 euros, 17.51 ​​euros

Supports: 12.78 euros, 12.17 euros, 12.09 euros

Knock-out certificate far on Stellantis

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You can now access all previous trading opportunities with a single click and see how the certificates and warrants presented there performed. Just click the button below, this is the link to our trading opportunity watch list.

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Keep in mind, however, that take profits, subsequent stop losses, inline warrants that expired with profits, and stopped positions are not specifically marked here, here you will find the performance of the derivatives without this “fine adjustment” since the day of presentation.

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