BASF SE (BAS)

Francesco Bergamini
Apr 29, 2022
2 min read

Technical analysis

Price	€ 51.64	52 Weeks range	€47.23 - € 71.99
Beta	1.39	Volume/ average	775k/ 5.1m
Sector	Basic material	Dividend	6.73%

BASF SE is a German multinational chemical company and the largest chemical manufacturer in the world.

BAS after a long bearish period is now hovering over what we believe to be a possible reversal area to the upside.

Price

Analyzing the price action of the last two years, we can see how the wide range between € 50-56.00 was a watershed for medium-long term moves.

The bearish channel is well defined and it is for this reason that only a consolidation above € 54.00 could be read as a possible change in trend.

On the weekly chart, this price range is even more important as we can see the support role played since 2007. In addition, with the help of the Volume Profile we can see how the POC is at € 68.00: an area where it is reasonalbe to expect a return in the short to medium term.

Indicators

Looking at MACD and RSI indicators: both show a positive divergence with the price action. MACD is progressively approaching the 0 line (division between bullish and bearish momentum) and RSI is now fluctuating on the 50 line, having reached the oversold area in March 2022.

On the weekly chart, similar scenario where we see a slightly recovering MACD and RSI near the oversold zone

Moving averages

The moving average we take as a reference is the 50MA one to determine the short-medium term direction.

In fact, we believe that its overcoming could then lead to a rapid recovery of vigor by BASF.

Conclusions

At current price, we believe BASF is a very attractive stock to monitor for a medium to long term position: the current range, combined with the narrowing of the Bollinger Bands suggests strong volatility in the short term.

We are positive on the stock but we await a confirmation of the price also considering the long bearish channel in place since the beginning of 2021: confirmation that we see the overcoming of the 50-day average and consolidation in the € 54-58.00 range.

Subsequently, we identify the short-medium term conservative target with the price of € 64.00, which also coincides with the 200-day average.

Second target at € 72.00 which represents the maximum reached in 2021: this price may be revised upwards during the year.

Entry range € 54 - € 58,00

Target 1 € 64,00

Target 2 € 72,00

Stop loss € 45,00