SAP SE (SAP.DE)

Technical analysis

Price	€ 108.38	52 weeks range	€ 100.56 - € 129.70
Beta	1.02	Volume/ average	0.9m / 2.0m
Sector	Tecnologia	Dividend	1.72%

SAP SE is a German software multinational based in Walldorf, which develops enterprise software to manage business operations and customer relationships.

Following the recent bearish pressures, we believe SAP is now approaching previous reversal areas which make the stock attractive for medium to long term strategies.

Price

The stock has fluctuated for the horizontal channel € 113.00 - € 128.00 since April 2021, given the recent break down we believe the stock can now reach the strongest support area at € 100 - € 105.

On the weekly chart it is possible to better appreciate the four price ranges on which SAP has regularly moved in the last 5 years: € 89 - 100, € 100 - 113, € 113 - 128, € 128 - 143.

Within the primary lateral trend, we can see the formation of decreasing highs, with a gradual decline from € 143 to € 128 and the most recent break at € 120 confirming a two-year bearish period for the German title.

Indicators

Looking at the MACD and RSI indicators, they both present an alignment on both the daily and weekly charts regarding a short-term bearish trend.

On the weekly chart, however, there is an important signal as the RSI is close to the oversold zone: this over-extension to the downside can be read as an interesting buying area. In addition, on the weekly RSI we see a well-defined bearish channel that can help us understand how much exposure is over or under weight.

Moving averages

For SAP we prefer to take into account the 50 and 200 day moving averages.

On the daily chart, the 50-day average can give us insights into the short-term trend: at the same time, its marked distance, as in this case, can suggest a possible recovery of vigor and possible reunification.

On the weekly chart, we can see how the average at 200 has often played the supporting role, giving rise to stretches in the medium to long term.

Conclusions

At current prices, we believe that SAP is starting to be an interesting stock not only to monitor but in which to start building a medium / long-term buying position.

The fluctuations of the last 5 years suggest that the € 98 - 105 price range is an interesting accumulation range.

The recent downward break of the € 113 - 128 channel, taking into account that it was a channel in existence since April 2021, we believe it could lead the stock to test the next support at € 100.

Once the area of € 98 - 105 is reached, the first indicators of a trend reversal could be given by a gradual overcoming of the 9-day average and an upward reversal of the MACD and RSI indicators.

From a longer-term perspective, further confirmation will be given to the formation of a growing maximum which we estimate to be at € 120 - 125.

We identify the previous maximum at € 143.00 as a medium - long term target and € 120 as a short term target.

Entry range € 98.00 - € 105.00

Target 1 € 120.00

Target 2 € 143.00

Stop loss € 80.00