SIEMENS ENERGY - prime example of technical analysis!

2021년 4월 14일

Hello dear readers,

Today I have brought you SIEMENS ENERGY, a particularly exciting stock. Due to the low price history, it shows us in a perfect example what technical analysis can do!

First a few facts

Siemens Energy AG

Legal form: stock corporation
ISIN: DE000ENER6Y0
Incorporation: 1 April 2020
Headquarters: Munich, Germany
Management: Christian Bruch (CEO), Joe Kaeser (Chairman of the Supervisory Board)
Number of employees: approx. 92,000
Turnover: 27.5 billion euros
Sector: Electrical engineering, power engineering
Website: siemens-energy.com

Brief portrait

Siemens Energy AG is an electrical and power engineering company based in Munich. Its portfolio includes power generation, power transmission and industrial solutions in both conventional and renewable energy. The renewable energy activities are managed by the subsidiary Siemens Gamesa. Siemens Energy was created through a spin-off from Siemens AG. The shares of the new company have been traded on the stock exchange since 28 September 2020.

Chart assessment

The chart is wonderfully clean, the structure is undoubted and clear. A clear rally can be seen, followed by a correction, in which the share price currently finds itself. This gives us the perfect setting to apply technical analysis!
Basically, many people are currently thinking of buying into this share. But when and at what price? This is exactly where technical analysis can help by pointing out points of interest! In other words: Instead of simply entering somewhere, we use corresponding circumstances that can be determined by a clear set of rules and at which there is a higher probability that the price will react as we would like.

- The price is in a potential positive trend (confirmation by a new high is still missing).
- Currently the price is in a consolidation in the form of a bull flag . The trend lines of the bull flag are clean and clear on both the upper and lower side!
- The normal correction of this movement is at the Golden-Pocket at approx. 24 points.

And what does this bring us now?

Purely visually, a lot is already clear here! Does it make sense to buy on the off chance within a negative trend channel? Probably not, at least from my point of view! Instead, I want to determine points at which I expect the probabilities to shift in my favour! Since this chart is so wonderfully clean, the simple structure does not obstruct the view of the essentials. From this, exactly 2 possibilities can be derived for me!

The plan

1. the golden pocket, as support of the trend and starting point of the normal correction, is always a good choice. So if the price should run up to the zone around 24 points again, I will start building up my long-term long position here. In 99% of cases, the golden pocket is the only point where I am prepared to buy into a negative secondary trend.
2. classic: the break of the bull flag . This indicates a change in the market structure and an end to the correction. The break of a flag is a sign of departure. Of course, we also get false signals here, but such situations are quite accurate.

Price targets

- The possible price targets of a breakout cannot be determined precisely at present. For this it is necessary to first guess the low of this movement. Assuming that the correction would run here to the golden pocket, we are talking about a price target around 40 points. Updates on this topic will follow.

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Many greetings & success!

Chartdigger